In a court presided over by Indian American federal judge Amit Mehta, Microsoft’s Indian CEO Satya Nadella hit out at the business practices of archrival Google, led by fellow Indian American Sundar Pichai.
Google’s dominance of the search engine market made it very hard for rivals to emerge, he told Mehta’s court on Monday in Washington, DC, where Google stands accused of illegally paying billions to Apple and others to preserve its monopoly.
Microsoft’s Bing has been trying since 2009 to build market share against Google, but Nadella said it could never compete against the search engine behemoth, largely due to its arrangements with Apple.
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“You can call it popular, but to me it’s dominant,” Nadella told a Google lawyer during a tense cross-examination in the biggest US antitrust case against a big tech company since the one against Microsoft more than two decades ago over the dominance of its Windows operating system.
Nadella broadly backed the government’s contention that Google’s intake of data from being the world’s preeminent search engine created a network effect that only made Google a more powerful tool to advertisers and users.
“It becomes even harder to break through when you don’t have (market) share,” Nadella said. Nadella said distribution was key to a successful search engine and that his company was prepared to pay Apple dearly to give Bing the default status on the iPhone.
Nadella downplayed the idea that artificial intelligence or more niche search engines like Amazon or social media sites have meaningfully changed the market in which Microsoft competes with Google.
Nadella said users fundamentally don’t have much choice in switching out of default web browsers on cell phones and computers. “We are one of the alternatives but we’re not the default,” he said.
He denied that Bing’s adoption of artificial intelligence had led to dramatic shifts in its market share. Google has argued that artificial intelligence programs like chatbot ChatGPT have increased competition in the search engine market.
“Even the app store downloads are interesting but not … something you write home about,” Nadella said about Microsoft’s revamped search engine enhanced with artificial intelligence.
Mehta, who was born in Patan, Gujarat and came to the US with his parents when he was one, isn’t expected to issue a decision in the case until next year.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy start-up with an innovative way to search the emerging internet,” the Justice Department wrote in its 2020 complaint that is the basis of the trial. “That Google is long gone.”
“The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet, with a market value of $1 trillion and annual revenue exceeding $160 billion,” the complaint said further. It’s worth $1.7 trillion now.
“For many years, Google has used anti-competitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising—the cornerstones of its empire.”
The Justice Department said the purpose of the complaint is to “restrain Google LLC from unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices, and to remedy the effects of this conduct.”
In its defense, Google has argued that people opt to use its search engine because of its superior quality. “They are not forced to use it and can easily switch to other search engines.”
Thirty-five states and Guam, Puerto Rico and the District of Columbia have filed a nearly identical lawsuit, which is being processed along with the main complaint filed by the justice department.