The trial against Google taking place in Washington this week for alleged abuse of its dominant position in the search engine market is the most important monopoly case in two decades. In the previous case from 1998, Microsoft was being judged while Google was just being born. It’s been 25 years. This Monday, current Microsoft boss Satya Nadella appeared in federal court in Washington as a victim and witness in the prosecution against Google. The manager explained that Google’s monopolistic behavior had prevented its own search engine Bing from gaining larger market shares.
The Microsoft executive wore a dark blue suit, white shirt and blue patterned tie and was dressed more formally than usual. He testified for the Justice Department and prosecutors in the packed federal courtroom in Washington, where the case is being argued for more than three hours in the third week of the trial. Previous statements from witnesses, including Apple executives, were made behind closed doors and claimed the information provided was confidential. On this occasion the statement was public.
Nadella highlighted Google’s multi-million dollar deals as the default search engine on phones, tablets and computers from Apple and other companies. Microsoft believes that it has abused its dominant position and prevented its competitors from growing. With his statement, Nadella underscores one of the main arguments in the Justice Department’s accusation against Google.
Google has maintained throughout the trial since the first allegations that it is very easy to change the default search engine, but that users do it not because of Google’s quality, but not because it is complicated. The accusation is that in practice users don’t change the default search engine and that while it’s easy for someone who knows how to do it, many users don’t even know where to start.
Nadella’s statement goes in this direction. He claimed that in practice users don’t have many options to change the default browsers on mobile phones and computers, hurting competitors like Microsoft’s Bing. In addition, he emphasized that the user gets used to the default search engine and this creates habits that are difficult to combat. “We are one of the alternatives, but not the standard,” he emphasized in a statement reported by AP.
Google’s monopoly power, he said, creates a “vicious circle” in which the company has a 90% market share and can invest its revenues in improving its search engine and maintaining its monopoly power with deals like these. He has described the agreement between Google and Apple as oligopolistic.
The Microsoft executive’s statement also served to attack another line of Google’s defense. The company argues that there are more ways than ever to search for information: “You can search for recommendations on TikTok, Reddit or Instagram, find music and podcasts on Spotify, ask a question on ChatGPT or shop on Amazon.” Actually start “More than 60% of Americans search for products on Amazon,” one of its managers explained a few weeks ago.
Nadella asserted that he disputed that Bing’s adoption of artificial intelligence had led to drastic changes in its market share and that enthusiastic statements about its impact were typical of someone going from a 3% share to 3.5%, but nothing too relevant. He also denied that artificial intelligence or more specialized search engines such as Amazon or social networks have significantly changed the market in which Microsoft competes with Google.
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