The recent peace pact between Google and Microsoft, first reported in the Wall Street Journal on April 23 and then with a bit more flare in The Guardian on May 2, might someday be seen as a turning point in modern human history. Over the past decade, Microsoft has been the largest and most determined agency on earth intent on keeping Google’s growth in check, waging an unrelenting battle against the company through lobbying, lawsuits and regulatory complaints. Now Microsoft is backing down.
Last year, largely as a result of a change in leadership at both companies, the tech giants agreed to drop about 20 patent lawsuits they had filed against each other over the previous five years. And now they have truly buried the hatchet. Microsoft is even dropping its support for the various organizations it helped to create to lobby government officials, such as FairSearch and ICOMP, which in turn helped set in motion the recent anti-trust actions brought against Google by the European Union.
When two large monopolies that have been butting heads for a decade suddenly cozy up, that can’t be a good sign—at least not for us. So how might the new pact hurt the average person, and how might it even be a turning point?
To understand what has happened here, you need to first look at Google’s unusual revenue model. Google didn’t invent the search engine—by some accounts theirs was the 21st, not the first. But it did invent a brilliant new way of monetizing the search process. Make your search engine the gateway to all knowledge, let people use it for free, track and catalog all their search activity, and then auction off that information to the highest bidder. On the surface, the company looks like an extremely generous, pot-smoking librarian; beneath the surface, it is little more than a glorified advertising agency, now bringing in almost all of its $75 billion in annual revenues by selling personal information about people like you and me to advertisers. It’s a deceitful business model, but it works.
A few years ago, over lunch with a friend who works for Microsoft, she shut me down fast when I made the mistake of comparing Microsoft to Google. “Microsoft makes money by selling products,” she said proudly, “not by tricking consumers into revealing their sexual fantasies and then selling that information to sex toy manufacturers.”
She was right, of course. But then last year, word began to spread about the various ways in which the new Windows 10 operating system tracked user behavior—listening in continuously to everything people said, for example, supposedly so that Cortana, Microsoft’s version of Apple’s Siri, would know when people were addressing it. Windows 10 was also reported to log everything people typed.
The company defended itself by asserting that the tracking features could be disabled, but more recent reports suggest that some core tracking functions can’t be turned off. In any case, because virtually all the tracking is opt-out rather than opt-in, the vast majority of people will be tracked by default, and that tracking is aggressive. According to Forbes, the Home version of Windows 10 is “allowed to control your bandwidth usage, install any software it wants whenever it wants … display ads in the Start Menu … send your hardware details and any changes you make to Microsoft and even log your browser history and keystrokes.”
All this is allowed under the Windows End User License (WEUL), to which one assents when one uses Windows 10. The WEUL, in turn, incorporates both Microsoft’s Privacy Statement and Services Agreement, which, between them, allow Microsoft to track pretty much everything users do and to share that information with just about everyone—affiliates, subsidiaries, vendors, legal authorities, or anyone else if the purpose is to “protect the rights or property of Microsoft.”
Aggressive tracking and a no-boundaries terms-of-service agreement—those are two of the key elements of Google’s business model. When Microsoft started aggressively peddling a free Windows 10 upgrade on a massive scale worldwide, I knew we were in trouble; “free” is how Google justifies all the tracking. I had to install third-party software on my laptop to stop it from pestering me every five minutes about installing the upgrade; most people just gave up and transformed their laptops and desktops into the Eyes and Ears of Microsoft.
Microsoft’s profits have been declining in recent years, in part because it missed the boat on the shift toward mobile devices. It has also invested untold millions trying to keep Bing, its second-rate search engine, afloat. Because Bing indexes only about 14 billion web pages (as opposed to 45 billion for Google), it can’t help but give you inferior results, which is why it has at most a 20% share of the search market in the US, and less than 5% in the rest of the world (compared to 90% for Google internationally).
What’s a software company to do?
The answer is The Pact. And with Microsoft shifting in the direction of Google’s surveillance model of business, two of the world’s most powerful companies will henceforth be mutually invested in making sure neither regulators nor legislators interfere with that model.
Here is how historians might someday look back at the year 2016: It was the year Google’s biggest corporate enemy threw in the towel and many privacy-promoting organizations shut down for lack of funding. It was the year public officials, citing safety and security concerns, began defending the idea of the truly transparent society, where everything is known about everyone. It was the beginning of the end of human freedom.