Imitation happens. It is a part of competitive behavior. Sony brings out a new feature on its TV and Samsung does the same thing three months later. Slate.com installs a better tool for soliciting comments, and a month later the same feature shows up at the Huffington Post. Chrysler brings out a minivan and within a two product cycles every other auto assembler has one too. Nobody loses sleep over this.
Moreover, the Internet makes monitoring a rival easier, so imitation involves less hassle and far lower costs than it used to. So it should surprise nobody that imitation happens with some frequency, especially among online competitors, and more often than in competitive contests offline.
Yet, so why does Bing’s imitation of Google’s search results seem to cross some sort of ethical line? Why does Microsoft’s conduct leave me shaking my head, wondering why Bing’s management did not put its nerdy foot down and just say “That is shameful. Let’s not go there.”?
Let’s consider why.
The starting point seem simple enough. In the fall Google started to notice that Bing’s results increasingly looked like Google’s’ results. Google’s engineers wanted to understand why.
Google’s engineers hypothesized that users of Microsoft Internet Explorer were entering search requests into Google’s search bar and getting results. They speculated that Microsoft began using that data to tweak the Bing search engine. In short, Google’s users and answers were informing Bing’s results.
That hypothesis turned out to be right. Neither party denies it.
The key facts are these: Microsoft’s users of the tool bar and other aspects of IE “opt in” to send data to Redmond, where engineers analyze it. Among the actions IE’s users take, they use Google sometimes. Of course, that is but one of many pieces of data used by the Bing’s designers.
Notice, however, that this situation does have a simple pattern. If Google’s users repeatedly find Google’s results useful, Bing will see that, and see the same success over and over. Like any automated process for analyzing a gazillion web logs, this user information gets attention automatically at Bing when Google provides the same response to the same inquiry.
In short, why were Bing’s results increasingly resembling Google’s results? Because Google’s results were useful, and Bing could observe that and add that to its improvements in the search engine.
Did Bing imitate Google exactly? No, by definition the imitation was not exact, since these actions were but one of several factors shaping the Bing search engine.
[Digression: Methinks Microsoft protests too much by stressing that they employ only user information and only when users opt in. Sure users opt in, but who really thinks users actually read those statements and understand all their implications? Who would fall back on that gobbledygook for permission to take any action? Come on, Microsoft, you can do better than that.]
Did anybody do anything strategic?
This episode reminds me of something Pablo Boczkowski stresses in his most recent book, News at work: Imitation in the Age of Information. The book shows that online news rivals end up being more alike than different, though nobody intentionally set out to be more alike.
This book is, more broadly, about the conduct of online organizations — in this case, the organizations provide news. The key insight is very powerful: as online firms gain the ability to monitor each other more frequently, their news story choices begins to match one another.
To say it another way, the online world does not allow one news organization to easily surprise the other. Each rival can monitor the other, eliminating surprises. As a result each rival tends to match the other more frequently, sometimes for defensive reasons (so they do not get ahead), sometimes for competitive reasons (so they can try to race to be first with a story).
(Aside: This newspaper boy art comes from Zazzle.)
Something similar is happening here in the way one rival imitates another rival. Bing can monitor Google’s results by watching its users’ search. Whether it chooses to imitate precisely is another matter.
Notice there is a twist in the Google/Bing situation. It is not as if Bing reverse-engineered Google, like many of the auto companies reverse-engineered Chrysler’s minivan after its unveiling. Bing is not monitoring Google by putting words into their search engine, writing down the results, and imitating.
Rather, Bing monitors Google by watching users, who do the work for them.
That is an interesting negation of one of Google’s key strategic advantages. Because Google sees more searches than any other engine, it is able to react to the greater scale with more and better spelling corection (did you mean “correction”?), and it is able to react to more unusual requests (because it sees more of them). If Bing can monitor Google, then to some extent Bing can learn many of the same lessons, even though it lacks the same scale of users.
What is permissible?
Which still begs a question: Is it ok for one firm to imitate another?
Let’s start with a weak standard, the law. Legally speaking, imitation is allowed so long as a firm does not violate laws governing patents, copyright, or trade secrets. Patents obviously do not apply to this situation, and neither does copyright because Google does not get a copyright on a search result. It also does not appear as if Googles trade secrets were violated. So, generally speaking, it does not appear as if any law has been broken.
Does that put Bing in the clear? No. To be frank, I have never liked this standard. “We did not break any law” is a pretty weak standard for judging firm conduct in frontier products. Same goes for “There is no law against this behavior.”
Why is this a weak standard? Frontier products tend to open up new legal questions. Unlike the market for shoes or most toys, say, there are not decades of precedents to suggest exactly what a shoemaker can and cannot do legally.
Or to say it another way, this is the search engine market we are talking about! Nobody in their right mind expects the legal norms to be particularly refined and worked out in such a young market. So why would any sensible person use the law as a relevant benchmark.
(BTW, to both party’s credit, in their public statements neither party falls back too much on the law in this case, at least not yet.)
If the law is not well defined, then what should govern firm conduct? Frankly, there is no precise answer to this question, nor could there be. Nobody yet knows what the right answer is, or, more to the point, what the legal system will say when it considers all the angles.
In practice the legal system often has little to say for a long time. In practice the answer will come from somewhere else. It will get worked out every day and in multiple episodes.
And that is why this episode raises my interest. High tech markets work much better if disagreements get worked out without resorting to lengthy legal disputes. High tech markets work much better if little disagreements get worked out informally, in a public court of opinion.
In this case, however, it appears the two parties do not see eye to eye at all on the informal matters.
The norms of rivalry
There is nothing wrong with one retailer walking through a rival’s shop and getting ideas for what to do. There is reallynothing wrong with a designer of a piece of electronic equipment buying a rival’s product and studying it in order to get new ideas for a better design.
In the modern Internet, however, there is no longer any privacy for users. Providers want to know as much as they can, and generally the rich suppliers can learn quite a lot about user conduct and preferences.
That means that rivals can learn a great deal about how users conduct their business, even when they are at a rival’s site. It is as if one retailer had a camera in a rival’s store, or one designer could learn the names of the buyer’s of their rival’s products, and interview them right away.
In the offline world, such intimate familiarity with a rival’s users and their transactions would be uncomfortable. It would seem like an intrusion on the transaction between user and supplier. Why is it permissible in the online world? Why is there any confusion about this being an intrusion in the online world? Why isn’t Microsoft’s behavior seen — cut and dry — as an intrusion?
In other words, the transaction between supplier and user is between supplier and user, and nobody else should be able to observe it without permission of both supplier and user. The user alone does not have the right or ability to invite another party to observe all aspects of the transaction.
That is what bothers me about Bing’s behavior. There is nothing wrong with them observing users, but they are doing more than just that. They are observing their rival’s transaction with users. And learning from it. In other contexts that would not be allowed without explicit permission of both parties — both user and supplier.
Moreover, one party does not like it in this case, as they claim the transaction with users as something they have a right to govern and keep to themselves. There is some merit in that claim.
In most contexts it seems like the supplier’s wishes should be respected. Why not online?
What happens now?
This looks like a classic high tech standoff. No law is being broken, so nothing can stop Bing from learning from users that go to Google’s search engine. Judging from their remarks, it sounds like they intend to keep on doing just what they are doing.
That makes me sad. The righteous reaction of Microsoft’s management seems tone deaf.
They had a choice to do it differently (and still have this choice). It would have been much more grown up for them to admit the unintended benefit they have gotten by watching their rival interact with their user. It would more ethical to swear they had not intended to benefit from a type of spying on their rival that would be unethical in other contexts. It would have been mature to then declare that they would win in the long run with good hard innovation instead of gaining advantage from this little piece of information.