What seems like a small spat between Google and Microsoft over a new You Tube app for WP8 is actually a lesson to all of us, and might set a precedent in a much wider context.
A smartphone without a You Tube App would be unthinkable.
But Google has consistently been unhelpful when it comes to Windows Phone. Not only has it declined to develop its own, it also hasn't allowed Microsoft access to the full API, specifically instructing You Tube not to enable a first-class You Tube experience on Windows Phones.
This battle has been evolving over a long period of time. Microsoft complained both to the US Federal Trade Commission and the European Commission about the way Google was blocking it from offering a full-featured You Tube app to Windows Phone users and the issue came to fore again earlier this year when Dave Heiner Vice President & Deputy General Counsel, Microsoft, commenting on the antitrust proceedings pointed out that:
"Google continues to prevent Microsoft from offering consumers a fully featured You Tube app for the Windows Phone."
When it comes to matters of antitrust and Microsoft, you can't help but think of quotes about casting the first stone. However, on balance it does seem that Google is using its hidden APIs as a weapon to battle WP8 with.
Microsoft, however, has now succeeded in producing a full featured You Tube app, including account support, playlists, commenting, and most other aspects of You Tube for Windows Phone 8, without the benefit of API access. Clearly it has had to reverse engineer the API and discover how to access the features it needs.
It has one important omission - advertisements, something that is considered a great advantage by most users.
Google has responded with a cease-and-desist letter, signed by Francisco Varela, Director, Global Platform Partnerships You Tube, demanding Microsoft withdraw the app and disable existing downloads on users devices. And during the Google I/O keynote, Larry Page decried Microsoft for “milking off” of Google’s innovations.
The letter, to Todd Brix, General Manager, Windows Phone Apps and Store, Microsoft makes it clear that Google isn't concerned so much by the clever reverse engineering as by the fact that the Windows Phone team hadn't gone the extra step to reverse engineer the part of the API that serves ads.
Content creators make money on You Tube by monetizing their content through advertising. Unfortunately,by blocking advertising and allowing downloads of videos, your application cuts off a valuable ongoing revenue source for creators, and causes harm to the thriving content ecosystem on You Tube.
Microsoft's official response (via Mary-Jo Foley on zdnet) is:
We’d be more than happy to include advertising but need Google to provide us access to the necessary APIs. In light of Larry Page’s comments today calling for more interoperability and less negativity, we look forward to solving this matter together for our mutual customers.
In his letter Varela comments:
We were surprised and disappointed that Microsoft chose to launch an application that deliberately deprives content creators of their rightful earnings ...
If Google and You Tube are so keen to preserve the income of web content creators perhaps they would like to tackle the wider issue of the way in which Ad Block and similar add-ins deprive so many content creators of ad revenue.
The whole incident is an interesting lesson in using APIs as a weapon of commercial warfare.
So what happens next?
A good question. Google's only way to win is to get Microsoft to withdraw the app by claiming a breach of conditions of use. Microsoft's can win either by just keeping the app or by getting Google to give up the details of the API.
War by API is a good strategy, but there is also the bigger issue of controlling consumption of what you provide. If Google can stop Microsoft from delivering its content minus ad views, presumably anyone else can stop ad-blocking utilities by the same argument.