In three and a half hours of testimony yesterday, Microsoft CEO Satya Nadella denounced Google’s alleged monopolistic practices, which he said had unfairly harmed Bing.
Nadella said Microsoft’s search engine Bing has not been able to compete fairly in the search engine market, largely because of Google’s deal with Apple to make it the default search engine on its devices and browsers. insisted.
“You wake up in the morning, you brush your teeth, you search on Google. When you’ve formed this level of habit, the only way to change is to change the default,” Nadella said, according to the Wall Street Journal. Told.
Google’s default search agreements with partners like Apple, Samsung, AT&T, and Verizon are a key issue the U.S. Department of Justice (DOJ) is focusing on in this landmark antitrust case that began earlier this month. is.
Shane Greenstein, an economist at Harvard Business School, said the Apple deal is the most eyebrow-raising. blog.
“Google pays Apple proportionally to the number of searches that Google gets from searches. The amount of money that goes back and forth over time is huge,” Greenstein said.
He added: “Apple and Alphabet are competing in the smartphone market, but here they are exchanging money to change the design of their competitors’ products.”
According to the Wall Street Journal, Sanford Bernstein Inc. estimates that Google is paying Apple $18 billion to $19 billion this year to make it the default on the iPhone and other Apple products. There is.
Nadella revealed that Microsoft was willing to pay “more than $10 billion a year” to convince companies to default to Bing instead of Google, but companies didn’t budge.
He complained that Google’s huge market share is forcing Microsoft into a vicious cycle that improves search results and profits and strengthens its monopoly.
Google argued that Microsoft couldn’t compete because its products were inferior. The company’s lawyers also argued that AI platforms like ChatGPT are increasing competition in the search engine market.
Microsoft also made a major AI overhaul to its Bing search service, but Nadella downplayed its success.
“Even the app store downloads, while interesting, are… not noteworthy,” Nadella lamented.
He highlighted the fact that Microsoft’s Bing Search has a single-digit market share in mobile search, but only slightly more in desktop search, and that Bing has at least 20% of the market. He added that it was one of his dreams. both segments.
The ongoing trial is the largest the Justice Department has brought in nearly 20 years. The last time he went back to the 1990s, he accused Microsoft of having an illegal monopoly on his PC market, and the Justice Department prevailed.
Ironically, while Microsoft was mired in that lawsuit, Google overtook Microsoft to become number one in the search engine market, effectively becoming synonymous with looking things up on the Internet.
Nadella acknowledged that Google would not have become dominant if Microsoft itself had not fought antitrust battles with the Justice Department.