Microsoft's Nadella Addresses Uphill Battle Against Google in Antitrust Trial
03.10.2023 posted by Admin
Microsoft's CEO, Satya Nadella, recently voiced his view that Microsoft faces an uphill battle competing with Google, as the search giant has essentially become the dominant force on the internet. He made these remarks during a lengthy testimony at Google's antitrust trial, which lasted over three and a half hours, as reported by various news outlets.
Nadella explained that Microsoft's search engine, Bing, struggles to rival Google due to the strategic partnerships Google has forged with companies like Apple and Samsung. These partnerships have led to Google being the default search engine on their devices and web browsers, creating a significant advantage for Google.
Specifically, Nadella criticized Google's agreement with Apple, describing it as "oligopolistic." He asserted that when combined, these deals create a challenging and self-reinforcing situation for Microsoft.
He went on to reveal that Microsoft was willing to offer substantial sums, exceeding $10 billion annually, to persuade companies to select Bing as the default search engine instead of Google. Unfortunately, these efforts did not bear fruit. (It's worth noting that an equity firm, Sanford Bernstein, estimated that Google pays Apple between $18 billion and $19 billion annually to maintain its status as the default search engine on Apple devices, as reported by the Washington Post).
Throughout the trial, Google's legal team consistently argued that Microsoft's inability to compete stemmed from having an inferior product, rather than the default agreements.
Nadella made a crucial statement, stating, "The entire notion that users have choice, and they go from one website to another website … is completely bogus." He emphasized that default settings play a paramount role in shaping users' search behavior.
During cross-examination, Google's lead litigator, John Schmidtlein, pointed out an interesting fact: "Google" is the most searched-for word on Bing.
This trial, which began earlier in the month, is the most significant antitrust case in over two decades. It centers on the agreements Google has established with Apple, Samsung, and other partners. The Department of Justice, which initiated the case, argues that these agreements constitute illegal methods of establishing and preserving a monopoly. Google, on the other hand, maintains that its status as the default search engine on many devices and users' preference for its product are due to its superior quality.
Nadella explained that Microsoft's search engine, Bing, struggles to rival Google due to the strategic partnerships Google has forged with companies like Apple and Samsung. These partnerships have led to Google being the default search engine on their devices and web browsers, creating a significant advantage for Google.
Specifically, Nadella criticized Google's agreement with Apple, describing it as "oligopolistic." He asserted that when combined, these deals create a challenging and self-reinforcing situation for Microsoft.
He went on to reveal that Microsoft was willing to offer substantial sums, exceeding $10 billion annually, to persuade companies to select Bing as the default search engine instead of Google. Unfortunately, these efforts did not bear fruit. (It's worth noting that an equity firm, Sanford Bernstein, estimated that Google pays Apple between $18 billion and $19 billion annually to maintain its status as the default search engine on Apple devices, as reported by the Washington Post).
Throughout the trial, Google's legal team consistently argued that Microsoft's inability to compete stemmed from having an inferior product, rather than the default agreements.
Nadella made a crucial statement, stating, "The entire notion that users have choice, and they go from one website to another website … is completely bogus." He emphasized that default settings play a paramount role in shaping users' search behavior.
During cross-examination, Google's lead litigator, John Schmidtlein, pointed out an interesting fact: "Google" is the most searched-for word on Bing.
This trial, which began earlier in the month, is the most significant antitrust case in over two decades. It centers on the agreements Google has established with Apple, Samsung, and other partners. The Department of Justice, which initiated the case, argues that these agreements constitute illegal methods of establishing and preserving a monopoly. Google, on the other hand, maintains that its status as the default search engine on many devices and users' preference for its product are due to its superior quality.