3 min Applications

Satya Nadella reasons about origins of market dominance Google Search

Satya Nadella reasons about origins of market dominance Google Search

Satya Nadella, CEO of Microsoft, testified yesterday in the antitrust case against Google Search. Although Google’s lawyers tried to use Nadella’s testimony to prove Google Search’s market dominance is the result of its quality, the CEO defended a different point of view.

The race to AI technology is a new field in which Google Search can exploit its market dominance. That’s according to testimony from Satya Nadella, CEO of Microsoft, who testified yesterday in the U.S. antitrust case against Google. With this testimony, the CEO came up with a new insight on top of his insights in the negotiations with Apple, for which he was originally called as a witness.

Google would make content for training AI models private by settling exclusive deals with publishers. This would allow the company to train its models with exclusive content and grab an advantage over competitors. “When I meet with publishers now, they say ‘Google is going to write this check, and this one is exclusive, and you have to match it,'” he said.

Nadella contrasts his testimony with earlier facts of the case: “Reminds me of the early stages of distribution agreements.” These agreements were uncovered by the U.S. Department of Justice (DoJ) in 2022 and were the reason for filing an antitrust lawsuit.

Search dominance consequence of quality?

During further clarification about the talks with Apple, John Schmidtlein, Google’s lead lawyer, intervened. He mainly repeated arguments from an earlier plea. The idea here is that Google Search’s dominance is not a result of payments but rather quality. Schmidtlein cited that while Bing has been the default search engine on Apple, Verizon, BlackBerry and Nokia in the past, device users always went around Bing to use Google’s search engine.

In the ultimately cancelled negotiations with Apple, Nadella reportedly did not necessarily want to integrate Bing’s logo in the search engine for Apple devices. To make Microsoft’s search engine the default again, it would have been willing to incur annual losses of up to fifteen billion dollars, hide the Bing logo and comply with all of Apple’s privacy wishes. “Becoming the default is the only thing that matters when it comes to changing user behaviour.”

On that point, the opinions of Google’s lawyers differed from the opinions of Nadella and the DoJ. Google cites that while Bing is the default search engine on all Windows devices, Google Search still gains a larger market share among Windows users. Being set as the default search engine would, therefore, make no difference. According to Nadella and the DoJ, this proves just the opposite. Bing’s market share among Windows users is small but significantly larger than among smartphone users, where Bing never integrates as the default.

According to the CEO, Apple would not switch to Bing because it fears consequences from Google if Google Search is no longer the default. After all, the tech giant owns popular services such as YouTube and Gmail, and what if Apple users can no longer access them?

The judge wondered why Apple would switch to a lower-quality search engine also known as Bing. From this question, it appears that the judge is mainly following the thinking of Google’s lawyers. A definitive verdict on the entire case, however, will take until 2024. The case will continue in court until the end of November.