Microsoft CEO Satya Nadella testified Monday that Google’s multibillion-dollar default search engine deals have played a key role in obtaining a dominant hold on the market – backing one of the government’s key arguments at the landmark antitrust trial.
Nadella, the most prominent witness to take the stand since the trial kicked off two weeks ago, rejected Google’s claim that default search engine settings are easy to change on smartphones, computers and other devices.
“The entire notion that users have choice, and they go from one website to another website…is completely bogus,” Nadella said. “Defaults is the only thing that matters in changing search behavior.”
“You get up in the morning and you brush your teeth and you search on Google,” Nadella added in reference to his rival’s dominant hold on the market.
Justice Department lawyers have accused Google of relying on more than $10 billion in annual payments to smartphone makers like Apple and mobile carriers like AT&T to ensure that its search engine is the default option for users – and built a 90% market share in the process.
The Microsoft boss said his company has invested more than $100 billion into the development of its own search engine, Bing, in a mostly ineffective effort to chip away at Google’s dominance.
“I see search or internet search as the largest software category out there. We are a very, very low share player,” Nadella said, according to Bloomberg. “But we continue to persist in it because we think of it as a software category we can contribute to.”
Nadella also asserted that Apple has held talks with Microsoft on a potential default search engine deal as a means to “bid up the price” paid by Google to retain that status.
“Do you think Google would continue to pay Apple if there was no search competition? Why would they do that?” Nadella said.
Judge Amit Mehta, who will decide the case being tried in the US District Court for the District of Columbia, asked Nadella why Apple would switch to Bing given the Microsoft product’s lower quality.
The question suggests Google’s argument — that it is dominant because of its quality and not because of illegal activity — has caught the interest of the judge.
Nadella responded that Microsoft had sought to show that Bing engineers would be able to “bridge the quality gap” with access to the number of queries made on Apple smartphones.
Nadella told the court that Google could further build on its lead in the market by adding artificial intelligence capabilities to its search engine in the near future.
Microsoft has poured billions of dollars in ChatGPT creator OpenAI and integrated its technology into Bing, while Google has done the same with its own “large-language model” program, Bard.
Google’s attorneys have argued that customers opt to use its search engine because it is the best product of its kind on the market, not because it is set as a default on their devices.
The CEO’s remarks followed an earlier appearance by Jon Tinter, a vice president of business development at Microsoft.
Tinter testified that Microsoft had considered in 2016 whether it should enter a deal for default search engine status on Apple’s Safari web browser that would have resulted in a multi-billion-dollar loss for the company – solely because it would result in a higher market share for Bing.
“In the short term it would have been highly negative,” Tinter said on the stand. “We told the board that we are thinking about making a multi-billion negative investment to support this.”
With Post wires