Microsoft Boss Nadella Testifies Against “Google Web”

Microsoft CEO Satya Nadella pulled no punches in his testimony in the US Justice Department’s antitrust trial against Google on Monday.

The landmark trial has been a long time coming, ever since the DoJ had filed a civil antitrust suit against Google for monopolising search and search advertising back in 2020.

Google is also facing another antitrust lawsuit, after the DoJ, along with a number of Attorneys Generals from a number of US states filed a civil antitrust suit against Google for monopolising multiple digital advertising technology products in violation of Sections 1 and 2 of the Sherman Act in January 2022.

Nadella testimony

During his testimony on Monday, Nadella revealed the lengths that Microsoft had gone to, in order to try and chip away at Google’s search engine domination, which saw Nadella estimating that Redmond has invested about $100 billion in Bing over the past 20 years.

According to CNBC, Nadella told the court that Google’s dominant market share in online search means that publishers and advertisers shape their content to Google’s 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 from the stand in Washington, DC, District Court.

The US DoJ has alleged that Google locked up distribution channels for general search engines via exclusive deals with browser and phone makers so it could be the default choice on various devices.

Apple deal

Nadella affirmed that argument in his testimony Monday, describing the obstacles Bing faces to gain more market share from Google.

The most famous exclusive deal is the multibillion-dollar agreement between Google and Apple to make Google search the default on Apple products.

Nadella reportedly revealed that Microsoft was prepared to take on billions of dollars in short-term losses for Bing to pay Apple enough to make its search engine the default on Apple products.

Not only would Microsoft have to replace the revenue Apple currently receives from Google for default placement (estimated to be as much as $19 billion this year), Nadella reportedly said Redmond would also need to cover the risk Apple would take on by switching the default.

Nadella said he “focused every year of my tenure as CEO to see if Apple would be open” to accepting a default offer from Microsoft and they’ve had “a series of dialogues on it.”

Nadella also reportedly indicated that Microsoft would even be prepared to drop the Bing name in order to win the Apple switch.

AI concern

During his testimony Nadella denied that Bing’s adoption of artificial intelligence had led to dramatic shifts in its market share.

According to CNBC, Google has argued that artificial intelligence programs like chatbot ChatGPT have increased competition in the search engine market.

“Even the app store downloads are interesting but not … something you write home about,” Nadella said about Microsoft’s revamped search engine enhanced with artificial intelligence.

The one area Bing has seen some success is in desktop search, thanks in large part because it is able to set Bing as the default on its Edge browser, which many PC manufacturers choose to preinstall to receive a discount on licensing Microsoft’s software.

Even there, however, many users opt to use Google’s Chrome browser and its search engine on Windows devices.

Nadella said Google’s position on Windows desktops shows how open Microsoft’s own ecosystem is.

Nadella admitted that Google is still the most commonly queried word on Bing.

As artificial intelligence becomes increasingly prevalent in search, Nadella said he worries that Google will utilise its position to block off even more avenues to rivals. Nadella says he is worried about being cut off from key datasets that could be used to train AI.

“I worry a lot, even in spite of my enthusiasm, that there is a new angle with AI,” Nadella said. “I worry a lot that this vicious cycle I’m trapped in can become even more vicious.”

Competing with Google’s core economic advantage will “become even harder in the AI age,” Nadella was quoted by CNBC as saying.