Microsoft chief executive Satya Nadella testified in what is being called a landmark trial in the US by the government against Google, and spoke about the company’s dominance in search market being so powerful that it leaves no room for competitors.
As one of the government’s high-profile witnesses, Nadella said in a three-and-a-half-hour testimony in a federal court in Washington that Microsoft, which is the world’s second-largest company with a market capitalisation of $2.39 trillion, could not fight Google’s multi-billion dollar deals with content providers on smartphones and browsers. Google’s parent company Alphabet is the world’s fourth-largest company with a market cap of $1.697 trillion.
Nadella said all tech giants were trying to collect vast amounts of content needed to train their artificial intelligence programmes, but Google’s strategy of exclusive deals with publishers was making it difficult for other companies. Nadella said the internet had become “Google web”.
Microsoft’s Bing search
Nadella said Google’s dominant market share in online search means that publishers and advertisers shape their content to their requirements, making it harder for competitors like Microsoft’s Bing to gain a foothold.
“Everybody talks about the open web, but there is really the Google web,” Nadella said.
These distribution deals have led to the US Justice Department’s antitrust fight against Google. The government says that Google, with some 90 percent share of the search market, illegally pays $10 billion annually to smartphone makers like Apple and wireless carriers like AT&T and others to be the default search engine on their devices.
Nadella said that Microsoft’s efforts to make Bing the default search engine on Apple smartphones, was rejected. And in laptops, a majority of which use MS operating systems, Bing is the default search engine, but the market share for search engines was still below 20 percent.
“You get up in the morning and you brush your teeth and you search on Google,” Nadella said.
Eddy Cue to testify
Eddy Cue, Apple’s senior vice president of services is expected to testify on Tuesday on his company’s deal in which Google pays them billions of dollars to be the default search engine on the iPhone’s browser and other settings. Private wealth management firm Bernstein published an estimate that Google paid Apple in the region of $18 billion to $19 billion this year.
John Schmidtlein, Google’s lead lawyer, countered that even when Microsoft won default status on computers and mobile phones, users bypassed Bing and continued to use Google, adding that Nadella’s company made strategic errors in its failure to get a larger market share.
Schmidtlein said Microsoft’s success in becoming the default on some Verizon phones in 2008, and BlackBerry and Nokia in 2011 also ended the same way – the consumers still searched on Google.
Artificial Intelligence is the new chapter of the rivalry between the two companies. Microsoft invested heavily in OpenAI and integrated it into Bing, while Google is building the Bard AI chatbot.
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