Microsoft CEO Satya Nadella testified in a landmark US trial against Google, highlighting concerns about Google’s practices in securing exclusive deals with publishers for content needed to train artificial intelligence. Nadella compared these efforts to the early phases of distribution deals, emphasizing the importance of these agreements in the US Justice Department’s antitrust case against Google.
The government alleges that Google, with its 90% search market share, pays substantial sums annually to smartphone makers and carriers to ensure it remains the default search engine on their devices, giving Google a significant advantage in the advertising market.
Nadella explained that building artificial intelligence required computing power and data, which Microsoft was willing to invest in. However, he raised concerns about other companies locking up exclusive content deals, which hindered competition. Publishers often cited Google’s exclusive deals when discussing partnerships with Microsoft.
Nadella attributed Google’s dominance as a search engine to agreements that made it the default browser on various devices. He downplayed the impact of artificial intelligence and niche search engines on the market. Microsoft had attempted to make Bing the default search engine on Apple smartphones but was unsuccessful.
Google’s lead lawyer, John Schmidtlein, questioned Nadella about instances where Microsoft won default status on devices but users continued to use Google. Schmidtlein argued that Microsoft made strategic errors in promoting Bing, including insufficient investment and failure to adapt to the mobile revolution.
Despite being the default search engine on most laptops with Microsoft operating systems, Bing’s market share remains below 20%. Judge Amit Mehta inquired about Apple’s preference for Google over Bing, suggesting an interest in Google’s argument that its dominance is due to quality rather than illegal activity.
Nadella became Microsoft’s CEO in 2014, long after the company faced its federal antitrust lawsuit. This legal battle led to Microsoft ending certain practices and paved the way for competitors like Google. The rivalry between the two tech giants encompasses browsers, search engines, email services, and artificial intelligence investments, with both companies striving for dominance in various areas.
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