AP

Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says

Sep 29, 2023, 5:43 AM | Updated: 7:33 am

BRAZIL - 2023/09/26: In this photo illustration, the Microsoft Bing logo is displayed on a laptop s...

BRAZIL - 2023/09/26: In this photo illustration, the Microsoft Bing logo is displayed on a laptop screen. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

(Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

Apple was never serious about replacing Google with Microsoft’s Bing as the default search engine in Macs and iPhones, but kept the possibility open as a “bargaining chip” to extract bigger payments from Google, a Microsoft executive testified Wednesday in the biggest U.S. antitrust trial in a quarter century.

“It is no secret that Apple is making more money on Bing existing than Bing does,’’ Mikhail Parakhin, Microsoft’s chief of advertising and web services, said in U.S. District Court in Washington. The comment drew a laugh from the courtroom. Parakhin was describing Microsoft’s years of futility trying to supplant Google on Apple devices.

Analysts estimate Apple collects $15 billion to $20 billion a year in revenue-sharing payments from Google in return for giving its search engine the coveted default slot on Apple’s devices. The revenue is generated when users click on advertisements in search results.

The U.S. Department of Justice accuses Google of using similar agreements to lock out rival search engines such as Bing and Yahoo, stifling innovation. The trial began Sept. 12 and is expected to continue into November.

Another witness, the founder of startup Branch Metrics, testified that Google’s exclusive contracts with phone companies and equipment manufacturers sabotaged his company’s attempts to market a search engine for apps on smartphones.

Alexander Austin said his Palo Alto, California-based company was forced to scale back what its product could do to avoid running afoul of Google’s agreements with companies like Samsung and Verizon that make Google’s search engine the default choice on digital devices. Branch Metrics had hoped to do for smartphone apps what Google had done for searching the internet — and to collect advertising revenue when users clicked on apps such as DoorDash.

“We had very high hopes and good feedback from advertisers,’’ he said.

But Branch Metrics’ potential partners worried that the app search product, called Discovery, would violate their lucrative agreements with Google. Branch Metrics had to limit the app results and to avoid links to the internet. The result was that it could not monetize its app search engine.

“It felt like there was injustice being done that a product like this could not see the light of day,” Austin said.

Google lawyer Ken Smurzynski, questionng Parakhin earlier, sought to knock down one of the government’s key arguments: that Google’s existing market dominance allows it to collect massive amounts of user data to improve search results and widen its lead over competitors.

Google’s team counters that dramatic improvements in artificial intelligence mean search engines can improve results without relying on user data. Smurzynski introduced a document in court that included comments about that from Microsoft CEO Satya Nadella.

“AI will fundamentally change every software category, starting with the largest category of all – search,” Nadella said in February blog post for Microsoft.

But Parakhin compared AI to driverless cars: not quite ready for prime time. Asked by U.S. District Judge Amit Mehta whether a search engine could be built solely off machine learning, he replied: “We’ve seen companies try. We haven’t seen anybody succeed.”

Mehta likely won’t issue a ruling in the antitrust case until early next year. If he decides Google broke the law, another trial will determine how to curb its market power.

One option would be to bar the Mountain View, California-based company from paying Apple and others to make Google the default search engine.

_____

AP Business Writer Michael Liedtke contributed to this story.

 

AP

Photo: A delegate wears a hat with pins during the Republican National Convention Monday, July 15, ...

Christine Fernando, Steve People and Jill Colvin, The Associated Press

Rep. Walsh speaks for Washington as cheering GOP delegates nominate Trump for president

Cheering GOP delegates formally nominated Donald Trump for president at Monday's Republican National Convention kickoff.

8 days ago

Photo: Sen. J.D. Vance, R-Ohio, right, points toward Republican presidential candidate former Presi...

Jill Colvin, Julie Carr Smyth, Steve Peoples and Zeke Miller, The Associated Press

Trump picks Sen. JD Vance of Ohio, a once-fierce critic turned loyal ally, as his GOP running mate

Donald Trump named Sen. JD Vance of Ohio as his running mate, choosing a onetime critic who became a loyal ally.

8 days ago

trump assassination...

Ayanna Alexander, The Associated Press

What to know about Trump assassination attempt and the investigation into the shooting

Authorities want to know how a shooter was able to get on top of a roof so close to where former President Donald Trump was speaking and open fire.

8 days ago

Photo: Republican presidential candidate former President Donald Trump is surrounded by U.S. Secret...

Julie Carr Smyth, Jill Colvin, Colleen Long, Michael Balsamo, Eric Tucker and Michelle L. Price, The Associated Press

Trump heads to convention as authorities investigate motive, security in assassination attempt

Trump called for unity and resilience after an attempt on his life added fresh uncertainty to an already tumultuous presidential campaign.

9 days ago

Photo: President Joe Biden speaks from the Roosevelt Room of the White House in Washington, Sunday,...

Will Weissert and Zeke Miller, The Associated Press

In primetime address, Biden says country must not go down road of political violence

President Joe Biden says “we can’t, we must not go down” the road of political violence in America after the attempted Trump assassination.

9 days ago

Photo: President Joe Biden speaks at a news conference following the NATO Summit in Washington, Thu...

Zeke Miller, Seung Min Kim, Lisa Mascaro and Colleen Long, The Associated Press

Biden says during news conference he’s going to ‘complete the job’ despite calls to bow out

Biden used his highly anticipated news conference to deliver a defense of his policies and batted away questions about his ability to serve.

12 days ago

Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says