TOPLINE
Microsoft CEO Satya Nadella said that Microsoft can’t compete with Google and that the search engine’s market share is so large the internet has basically become the “Google web” Monday during more than three-and-a-half hours of testimony in Google’s antitrust trial, according to multiple news organizations.
KEY FACTS
Nadella reportedly testified that Microsoft and Bing, its search engine, was unable to compete with Google because of deals Google has made with partners like Apple and Samsung to make Google the default search engine on their devices and browsers.
Nadella described Google’s deal with Apple in particular as “oligopolistic,” and said the deals in sum amount to a “vicious cycle” for Microsoft, according to reports.
He also said that at one point Microsoft was willing to pay “north of 10 plus billion a year” to convince companies to make Bing the default over Google, but companies wouldn’t give in (equity firm Sanford Bernstein estimated Google is paying Apple $18 billion to $19 billion this year to make Google the default on iPhones and other Apple products, according to the Washington Post).
Google’s lawyers continually argued that Microsoft’s lack of ability to compete was because it had an inferior product, not because of the default agreements.
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CRUCIAL QUOTE
“The entire notion that users have choice, and they go from one website to another website … is completely bogus,” Nadella testified Monday. “Defaults is the only thing that matters in changing search behavior.”
SURPRISING FACT
“Google” is the most searched for word on Bing, John Schmidtlein, Google’s lead litigator, pointed out as he cross-examined Nadella.
KEY BACKGROUND
When this trial began earlier this month, it became the biggest antitrust trial in more than two decades. The trial revolves around these agreements Google’s made with Apple, Samsung and other partners. The Department of Justice, which brought the case, argues that they constitute illegal means of creating and maintaining a monopoly. Google has continually argued that it is the default search engine on so many products, as well as most users’ preferred search engine, because it is simply a superior product.
FURTHER READING
Microsoft C.E.O. Testifies That Google’s Power in Search Is Ubiquitous (New York Times)
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Microsoft CEO says Google’s deals with Apple led to its dominance (Washington Post)
Microsoft CEO Says Google’s Agreements With Apple Unfairly Harmed Bing (Wall Street Journal)
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