WASHINGTON (CN) — Google’s CEO took the witness stand to start the eighth week of the government's landmark antitrust trial of the tech giant Monday, defending the company’s dominance in internet search.
Attorneys representing the Justice Department and the 35 states who brought the suit pressed Sundar Pichai, an 19-year Google veteran and CEO since 2015, on the billions shelled out to Apple to make Google’s search engine the default on iPhones and the Safari internet browser.
William Cavanaugh, an attorney representing Colorado and leading the state’s case, focused on Google’s revenue-sharing agreement with Apple that shares a significant portion of Google’s advertising revenue from Apple devices in exchange for exclusive default status.
Cavanaugh, of the firm Patterson Belknap Webb & Tyler, asked whether Google’s position as top dog in internet search — it conducts over 91% of all internet searches compared to its closest competitor, Microsoft’s Bing, which only conducts about 3% — played a role in negotiations with Apple CEO Tim Cook in 2016.
“Did you communicate to Cook that he didn’t have any leverage because Bing wasn’t even a viable option?” Cavanaugh asked, implying that he strong-armed the Apple CEO into accepting Google’s terms to keep the percentage of shared revenue as is.
Pichai rejected that characterization, asserting that he merely thought the deal was good as is based on the fact that both companies were benefiting from the deal and from linking their products. He said Apple benefits by seamlessly integrating Google search into its products and Google benefits from having default status.
He added in a similar line of questioning from Justice Department attorney Meagan Belshaw that the meeting with Cook, part of so-called yearly “CEO check-ins,” was anything but one-sided.
“We fiercely compete on so many products,” Pichai said. “The meeting was tense at times. We continue to have moments of tension between the companies.”
Pichai’s testimony comes as part of Google’s defense portion of the trial. Google's attorneys have also called witnesses such as Prabhakar Raghavan, who reports directly to Pichai, to testify that Google faces competitors on all sides in the form of rival search engines, e-commerce and travel sites and social media platforms with limited search functionality.
Raghavan, head of Google Search, testified this past Thursday that he has seen young internet users refer to the company as “Grandpa Google” and are spending more time on apps like TikTok instead.
Justice Department attorneys have pushed back against the idea that e-commerce sites like Amazon or Booking.com are true rivals to Google’s dominance in the search market, as users regularly research products or locations on Google before making their purchase or reservation on the other site.
During her cross-examination, Belshaw turned to “choice screens,” which allow users to select their default search engine when first opening a browser, an option that Google’s revenue-sharing agreements specifically prohibits. She noted that in 2005, when Microsoft launched Internet Explorer 7, Google took issue with Microsoft’s decision to make its search engine at the time, MSN Search, the default on the browser.
An email from Google’s lawyers to Microsoft’s attorneys raised concerns nearly identical to those expressed in the federal government’s suit against Google.
“We are deeply concerned about potential for harm to the competitive process from Microsoft’s actions,” a Google attorney wrote in a 2005 letter.
Pichai argued that the difference between Microsoft’s effort to make its search engine the default was particularly problematic because the setting to change engines was “hidden” and that he had never met anyone who had found the setting.
The government has raised similar concerns regarding the 4-step process to change the default engine on iPhones or the Safari browser, calling a professor of neuroscience and behavioral economics who testified that even a single step is enough of a barrier to keep people from changing something.
Belshaw also pressed Pichai on a concern that Google had decided to set messages on its internal messaging system to delete automatically after 24 hours, a change that was first implemented in 2008 and remained after Pichai took over as CEO.
She noted that in 2005, Google had threatened Microsoft with litigation over its search engine default decision and reminded Microsoft to retain any relevant past and future records, then just three years later adopted a policy to automatically delete a wide swath of internal Google messages.
Pichai responded that the policy was in place when he took over and changing it was not seen as a priority.
The trial, presided over by U.S. District Judge Amit Mehta, is expected to wrap in the coming weeks, with a ruling from Mehta sometime in early 2024. If he rules against Google, a second trial will begin next year to determine the proper punishment, which could result in fines or parts of the company being sold off.
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