Could this post be designed to provoke a reaction that might lead to (or contribute to pre-existing) FTC anti-trust inquiries about Google's practices?
Also, Google isn't preventing Microsoft from creating a Youtube app, they are only requiring that it meet certain requirements. Since Microsoft is a direct competitor in the search (and therefore advertising) space, it's not unfounded that Google do what they're doing.
I personally think it's crap, however Microsoft brought this on themselves by blatantly violating the Terms of Service.
However, when all is said and done, Microsoft deserves it -- they are, after all responsible for Internet Explorer and while it isn't related to Youtube, they deserve to suffer for all of the hours and hours developers have spent trying to make their products compatible with that hell-demon of a browser.
Example 1: The EU required Microsoft to offer a version of Windows with a browser choice screen. However, Apple does not have to offer an alternative to Safari. Reason: Windows was a monopoly, but Mac OS X wasn't.
Example 2: The EU permitted Windows Phone and Windows RT to default to IE, without offering a choice of other browsers. Reason: Windows Phone does not have a monopoly of the smartphone market, and Windows RT does not have a monopoly of the tablet market.
(Which is why the DOJ defined the market as the one for x86 PC operating systems. That excluded Mac OS from being considered a competitor to Windows, as it ran only on PowerPC at the time.)