Google Backed themselves into a corner

This recent YouTube app made by Microsoft is one smart business decision.

I want to make sure I have this right so I am going to write down what I have read and if I am wrong feel free to correct me.

Microsoft asks Google to create a fully functional YouTube app for its Windows Phone platform. Google says no because Microsoft's market share is too small and they would not be able to recoup the money they put into creating the app. Microsoft then creates the app and asks Google to give them access to the metadata for YouTube to make it fully functional. Google says no (I am not sure if they cited a reason here). Microsoft then take their app and adds all the functionality they can and release it. Google sends a letter telling Microsoft to take it down as it break the TOS agreement. Microsoft responds and says give us access to the proper API/Metadata so we can make it compliant with your rules.

That I feel is a good sum up of what happened. Again if anything is wrong in there let me know.

Microsoft has a very strong case on their hands Google cannot say that it was too expensive to make the App as Microsoft already made it. It seems to me the only argument I have heard is that Google does not have to make the App because they own YouTube and can do what they like with it. I would agree with this except that people have decided that the web should be open and free with as little restriction as possible applied to it.

Google also does not have a very strong legal case against Microsoft in my opinion because Google has effectively said that Windows Phone is to small a market to materially effect their revenue. Microsoft did break Google's TOS, however because it did not negatively effect their business they cannot receive damages which is where the real money is. This is quite a predicament for Google and all I have to say to Microsoft is :

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