Microsoft CEO Calls Google's Dominance In Search A Nightmare In Antitrust Trial
Microsoft CEO Satya Nadella commented during his testimony in Google's antitrust trial that the company cannot compete with Google and that Google's dominance in the search engine market is so significant the internet has more or less become "Google web." Nadella's comment is in light of deals Google has made with others, such as Apple and Samsung, making Google the default search engine on their devices.
The Department of Justice (DOJ), along with the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennesse, and Virginia, filed a civil antitrust suit against Google at the beginning of the year for monopolizing multiple digital advertising technology products in violations of Sections 1 and 2 of the Sherman Act. The DOJ aims to restore competition in essential markets and obtain equitable and monetary relief on behalf of the American public.
During Nadella's testimony, he described Google's deal with Apple, in particular, as being "oligopolistic". According to multiple reports, he commented that the deals in total amount to a "vicious cycle" for Microsoft. He was quoted as saying, "My main worry now, other than my early exuberance about an opportunity that we may have here, is: Is this going to be even more of a nightmare to make progress in search?"
Nadella said that Microsoft would pay "north of 10 plus billion a year" to persuade companies to make Bing the default search engine over its rival Google. Still, those companies would not give Microsoft that chance. Equity firm Sanford Bernstein estimated that Google is paying Apple $18 billion to $19 billion this year to make it the default search engine on iPhones and other Apple devices.
Google's lawyers countered by arguing that it was Microsoft's lack of ability to compete due to being an inferior product, not because of the monetary deals struck between the parties. John Schmidtlein, Google's lead litigator, pointed out during his cross examination of Nadella that "Google" is the most searched word on Bing.
In what was perhaps a response to Schmdtlein's point, Nadella remarked, "The entire notion that users have choice, and they go from one website to another website ... is completely bogus." He added, "Defaults is the only thing that matters in changing search behavior."
Assistant Attorney General Jonathon Kanter of the DOJ Antitrust Division explained, "Our complaint sets forth detailed allegations explaining how Google engaged in 15 years of sustained conduct that had — and continues to have — the effect of driving out rivals, diminishing competition, inflating advertising costs, reducing revenues for news publishers and content creators, snuffing out innovation, and harming the exchange of information and ideas in the public sphere.”
However, the search engine aspect is only a small part of the antitrust suit brought against Google. It also says Google's anticompetitive conduct includes acquiring competitors, forcing the adoption of Google's tools, distorting auction competitions, and auction manipulation.