Microsoft CEO Acknowledges Google’s Search Dominance Amid Antitrust Trial
October 3, 2023
The ongoing legal conflict surrounding Google’s (GOOG, GOOGL) alleged dominance clearly illustrates the extent of the tech giant’s market penetration. Even Microsoft’s (MSFT) CEO, Satya Nadella, admits to starting his day with the search engine. During his recent testimony at Google’s antitrust trial, Nadella equated the use of Google to a daily routine, stating, “You get up in the morning, you brush your teeth and you search on Google.” His comment refers to the almost universal usage of this search engine.
The Fear of Growing Monopoly
This situation is disconcerting to some insiders within the tech industry. The worry does not only lie in Google’s current monopoly but also in the potential it carries with advancements in AI. Nadella issued a warning that Google might leverage the hefty profits generated from its search function to procure exclusive rights to content. This could be utilized to refine its search AI. Despite Microsoft having invested $100 billion in its own search tool, Bing, Nadella conceded that it is still a “very, very low share player.” Bing has even failed to secure a spot on Apple (AAPL) products, despite proposing more favorable conditions than Google. Moreover, Microsoft’s phone is obligated to use Google Search to license the Android mobile operating system.
The Legal Accusations and Implications
Google is being challenged by the U.S. Department of Justice for supposedly maintaining an unlawful monopoly. The tech company is alleged to pay $10 billion annually to ensure its search engine remains the default choice, an accusation that Google denies. The Department is using Bing and the immense resources backing Microsoft as evidence that, regardless of the resources, Google remains unrivalled. Nevertheless, a resolution to this case isn’t anticipated until the following year.
Analysts’ Viewpoints on the Trial
Analysts, such as those from Cavenagh Research, have observed similarities with Microsoft’s own antitrust case in the late 1990s. They anticipate that the judge will likely prohibit Google from entering into exclusive contracts with Apple or Android OEMs that insist on Google being the default search engine. However, they noted that this trial is “quite insignificant” for Google’s business prosperity. Livy Investment Research echoed this view, regarding the risks from the trial as remote. Instead, their focus is on recent findings from the trial that indicate the increasing likelihood of Google losing its market share to competitors.