Microsoft CEO Satya Nadella testified Monday that Google’s power in online search was so pervasive that even his company found it difficult to compete on the Internet, becoming the government’s highest-profile witness in its landmark trial. antitrust against the search giant.
In more than three and a half hours of testimony in federal court in Washington, Nadella was often blunt and sometimes combative in laying out how Microsoft failed to overcome Google’s use of multibillion-dollar deals to be the default search engine. on smartphones and web browsers.
The Internet is truly “Google’s web,” Nadella told the packed courtroom, adding that Google could now use its advantage and scale to create tools that dominate the emerging artificial intelligence industry.
The image of the CEO of a major tech rival (Microsoft is one of the world’s largest public companies, valued at $2.4 trillion) saying he couldn’t easily fight Google was striking. Nadella’s testimony underscored how entrenched Google has become in online search as the government seeks to show that the company violated monopoly laws by forging anticompetitive deals to crush rivals.
Nadella’s appearance on the witness stand in the case (United States and Others v. Google, which is the first monopoly trial of the modern Internet era) was also a sign that the bitter rivalry between Microsoft and Google continues unabated. restrictions. For more than two decades, the two companies have battled over online search, mobile computing, web browsing and cloud computing, and have faced off in multiple legal battles as both became increasingly powerful. Now companies are engaged in an increasingly intense fight over ai.
“As excited as I am that there is a new angle to ai, I’m very concerned that this vicious cycle I’m trapped in could become even more vicious,” Nadella said.
Regulators around the world have been working to rein in the power and reach of Google, Apple, Amazon and Meta, which owns Facebook, Instagram and WhatsApp. Last week, the Federal Trade Commission sued Amazon, arguing that it violated antitrust laws by pressuring merchants on its site. The FTC also filed an antitrust lawsuit against Meta, alleging it killed off nascent rivals, and the Justice Department sued Google in a second case over its control of online advertising.
Google’s 10-week test is being closely watched as a referendum on whether the government can rein in Silicon Valley’s biggest companies. A Google victory could be a major rebuke to regulators who say the tech giants have too much influence over their customers, partners and emerging competitors.
At the center of the government’s case is the argument that Google illegally cemented its monopoly on online search by paying to be the default search engine in browsers such as Apple’s Safari and Mozilla’s Firefox, as well as on the home screen of smart phones. Google has argued that the default positions are not overwhelmingly powerful and that users can switch to a new search engine if they wish.
But in court, Nadella said that argument was “false” because users generally don’t change their default search engine, even if they can.
“You get up in the morning, you brush your teeth and you search on Google,” he said, later adding that the deal between Google and Apple in particular was “oligopolistic.”
Nadella said Microsoft had been trying to get deals for default positions in browsers and smartphones for Bing, its own search engine. But it hasn’t been very successful, she said.
microsoft Bing introduced compete against Google in 2009. At that time, Microsoft began an aggressive public relations campaign against Google and both companies lobbied each other before regulators in Europe and the United States.
In 2016, the public smear seemed to come to an end when Nadella and Google CEO Sundar Pichai, both new to their roles, declared a détente. The rivalry had become a distraction, they said, and they had different priorities.
Mr. Nadella’s testimony showed that their rivalry had continued. John Schmidtlein, Google’s lead litigator, said in his opening statement that the case was “really about Microsoft.”
Last week, other Microsoft executives such as Jonathan Tinter, a business development executive, and Mikhail Parakhin, an advertising executive, testified about the search business. Tinter said Google used its scale to make its search engine the default on Apple and Samsung phones, stifling competitors like Microsoft.
On Monday, Schmidtlein attempted to undermine Nadella’s testimony by suggesting that Microsoft’s failure to compete with Google was the result of an inferior product and a lack of investment.
Schmidtlein criticized Nadella with questions about cases where Bing had been the default on mobile phones, only to have users return to Google. She noted that Nadella had referred to Google as “dominant” and asked if she could substitute the word “popular.”
Nadella said that whether you call it “popular or dominant,” Microsoft was still competing against Google’s huge market share.
“This testimony paints Google as a bully that everyone fears,” said Rebecca Haw Allensworth, a professor at Vanderbilt Law School, adding that it suggested Google’s motivation for signing exclusive search agreements was not “simply share the revenue of a valuable product with a distributor like Apple, but it is mainly to keep competitors like Bing at bay.”
While much of the trial has revolved around Google’s past behavior, Nadella shifted some of the focus to the future and ai. Microsoft has invested $13 billion in OpenAI, the maker of the ChatGPT chatbot, which can now use Bing as its default search. Google has started offering its own ai-powered chatbot, Bard.
Nadella said he was concerned that Google would make deals to exclusively use online content to train its artificial intelligence tools.
“When I meet with publishers now, they tell me, ‘Google will write us this check, it will be exclusive, and you will have to match it,’” he said.
Nadella said that would set Google up to dominate the next generation of online search as well.
“My main concern now, besides my initial exuberance about the opportunity we may have here, is: Will it be even more of a nightmare to advance the search?” he said.
At the end of Mr. Nadella’s appearance, a Justice Department lawyer asked why he thought Google paid Apple so much money to be the default search engine in Apple’s Safari web browser.
“That’s a great question,” Nadella said. “I would love the opportunity to get them out of paying, perhaps on behalf of Google shareholders.”
