Microsoft CEO says unfair practices by Google led to its dominance as a search engine

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This article was published 02/10/2023 (1041 days ago), so information in it may no longer be current.

WASHINGTON (AP) — Microsoft CEO Satya Nadella said Monday that unfair tactics used by Google led to its dominance as a search engine, tactics that in turn have thwarted his company’s rival program, Bing.

Nadella testified in a packed Washington, D.C., courtroom as part of the government’s landmark antitrust trial against Google’s parent company, Alphabet. The Justice Department alleges Google has abused the dominance of its ubiquitous search engine to throttle competition and innovation at the expense of consumers, allegations that echo a similar case brought against Microsoft in the late 1990s.

Nadella said Google’s dominance was due to agreements that made it the default browser on smartphones and computers. He downplayed the idea that artificial intelligence or more niche search engines like Amazon or social media sites have meaningfully changed the market in which Microsoft competes with Google.

Nadella said users fundamentally don’t have much choice in switching out of default web browsers on cell phones and computers.

“We are one of the alternatives but we’re not the default,” he said.

Google’s lead litigator John Schmidtlein questioned Nadella about instances when users switched from Bing to Google even when Microsoft’s search engine had default status on their devices — arguing that Microsoft made missteps with Bing that prevented it from rivaling Google.

When questioned, Nadella denied that Bing’s adoption of artificial intelligence had led to dramatic shifts in its market share. 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.

Nadella was called to the witness stand as the biggest U.S. antitrust trial in the past quarter-century moved into its fourth week of testimony before U.S. District Judge Amit Mehta, who isn’t expected to issue a decision in the case until next year.

The Justice Department’s antitrust case against Google centers on deals the company struck with Apple and other device makers to use Google’s search engine.

In the 1990s, Microsoft faced accusations it set up its Windows software in ways that walled off applications made by other tech companies, just as Google is now facing accusations of shelling out billions of dollars each year to lock in its search engine as the go-to place for finding online information on smartphones and web browsers.

In an ironic twist, the constraints and distractions posed by the government’s antitrust case against Microsoft helped provide a springboard for Google to turn its search engine into a dominant force. By the time Microsoft started its scramble to develop its own search engine, Google had already become synonymous with looking things up on the internet.

But Microsoft nevertheless has poured billions of dollars trying to mount a serious challenge to Google with Bing and, at one point, even tried to buy Yahoo for more than $40 billion in a bid that was rejected while Steve Ballmer was still the software maker’s CEO.

Nadella, who was working at Microsoft during the late 1990s antitrust showdown with the Justice Department, succeeded Ballmer as CEO in 2014. During his tenure, he has steered to Microsoft huge gains in personal and cloud computing that have boosted the company’s stock price by nearly nine -fold since he took over while creating more than $2 trillion in shareholder wealth.

Despite all that success, he hasn’t been able to make any significant inroads in search against Google, with Bing still a distant second in the market.

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Associated Press writer Michael Liedtke in San Ramon, California, contributed to the report.