Microsoft’s CEO Testifies in Antitrust Trial, Emphasizes Google’s Default Deals as Critical to its Dominance

Nadella dismissed the idea that users have a choice in search engines, stating that defaults are the only influential factor in changing search behavior.

Google trial begins in first major tech antitrust case in decades

During the trial, Nadella revealed that Microsoft was willing to pay over $10 billion annually to companies like Apple to prioritize its Bing search engine, but Apple remained committed to its contract with Google.

The antitrust case against Google focuses on the contracts that require smartphone makers to use Google’s search engine. Google argues that companies had the freedom to choose alternative search engines but opted for Google because of its superior service. Google also asserts that advancements in artificial intelligence, such as ChatGPT, have introduced new competition in the search market.

Microsoft’s Bing search engine has been a distant competitor to Google, which holds a 90% market share in general search queries. The Justice Department argues that Google utilized anti-competitive tactics to prevent rival search engines like Bing from gaining traction.

Under questioning by a Justice Department attorney, Nadella acknowledged that search is the largest category in software, which is why Microsoft continues its efforts in the field despite its limited market share. Nadella expressed that Microsoft hopes for a future change in the search landscape that may provide them with a better opportunity.

Before becoming Microsoft’s CEO, Nadella led the company’s development of the Bing search engine, launched in 2009, in an attempt to rival Google’s dominance. Earlier this year, Microsoft declared a new competition against Google with the launch of an updated version of Bing powered by ChatGPT’s AI capabilities, but has yet to significantly impact Google’s user base.

According to Nadella, Google has significant influence over smartphone makers through a combination of incentives and threats, such as withholding access to the Google Play app store, rendering Android phones useless without it.

Microsoft has previously faced a similar antitrust case, initiated by the Justice Department in 1998, regarding its efforts to maintain a monopoly through requirements on PC makers to use its Internet Explorer browser and other applications. The case was settled, with Microsoft making commitments to improve competition.

The trial has begun with testimony from Nadella and other witnesses called by the Justice Department. Google’s defense and witnesses are expected to present their case starting in late October.