wordpress blog stats
Connect with us

Hi, what are you looking for?

US v Google: Did Google search engine’s dominance hurt Bing’s chances at competing in the search engine market?

Interestingly, while facing allegations of indulging in ‘malpractices’, Google argued that competing search engines like Microsoft’s Bing weren’t as popular due to not being the best product in the market.

Almost exactly a month ago, the United States kicked off a massive antitrust trial against Google for its alleged monopolist behaviours in the search engine and search advertising markets. 

Described by the Department of Justice (DOJ) as a case “about the future of the internet”, commentators say that this is the biggest government-led charge on a tech company since 1998’s case against Microsoft for bundling Internet Explorer with its products. 

In this two-part series, we explore the various points that Google, the DOJ, and other third-party stakeholders have argued before District Judge Amit Mehta over the last month. Part two deals with how Google’s search engine dominance, forged through exclusivity agreements, hurt Microsoft’s and other competitor’s abilities to compete in the market with Bing.

A thank you: Notably, this largely closed-door trial has also been criticised for its secrecy, with reporters unable to sit in on proceedings for the most part, and key documents being taken down from public viewing. For those of us from outside the United States, these sources, among others, have been invaluable in rounding up the trial’s key arguments: 

  • Josef Weitzman’s reporting for Big Tech on Trial.  
  • The Verge’s live blog of the proceedings.
  • The New York Times’ crisp legal reporting of what’s at stake.

Is this an antitrust issue—or is Bing simply an inferior search engine?

To recap: The allegation here is that Google’s various ‘malpractices’ make it difficult for competitors—like Bing—to make a dent in the search engine market. Google’s (rather blunt) argument: people prefer not to use Bing because it’s not the best product out there. 

Bing and DuckDuckGo take a beating: Google argued that its default search engine agreements have generated good revenues for web browsers, while its various Android agreements created competition with iOS. Most importantly, people still chose its search engine even when provided with alternatives. Or, as Google’s lawyer put it during his opening statements: 

“If Google is prevented from competing, that won’t make Yahoo or DuckDuckGo run faster.”

But, why is Bing so….under-used?: Microsoft’s CEO Satya Nadella begged to differ, testifying that Google’s default search engine status crushed Bing both as a product and as a business.  

Part of this has to do with how search engines work. When more people use a search engine, more user data is generated. That’s then used by the search engine to improve its services—and creates incentives for advertisers to use the platform to hawk ads. As services improve, users come on board, advertisers target them better and successfully, the search engine grows. Google is winning in this arena currently. Bing isn’t—it gets less searches, users, data, and advertisers, creating a “vicious cycle” of non-competitiveness.

It’s only natural then, that when negotiating with Apple, Microsoft was eager to win the default search engine status on its devices. “We have proven that if we get the user data from [Apple’s] query share, we can bridge the quality gap,” Nadella said.

Microsoft was even willing to pay Apple up to $15 billion a year to make Bing the default search engine. The costs might be high, but the placement would make Bing more competitive. Nadella also admitted that he would be willing to do different things to acquire more data—like hiding Bing’s brand in the search engines of Apple users, and respecting Apple’s privacy commitments. Describing the idea that it’s easy to switch browsers as “bogus”, Nadella added that default search engines “are the only thing that matter…in terms of changing user behaviour”.

Nadella also pushed back against Google’s argument that people still choose Google Chrome and Search over Bing on Windows. He argued that this only proves that being the default search engine matters—this was the reason Bing even has a double-digit market share on Windows. Nadella cited the example of Apple Maps, which is the default navigation system on iPhones. Despite its rocky start in the market, it has grown because it’s pre-installed, he argued.


Article continues below ⬇, you might also want to read:

  • US Vs Google Landmark Antitrust Trial Begins Today, Here’s All You Need To Know
  • Google ‘Monopoly Gatekeeper’ For Internet: Key Takeaways From US Antitrust Lawsuit
  • U.S. Goes After Google’s Ad Tech Business In New Antitrust Case: All You Need To Know
  • Google’s AdTech Business Faces Anti-Trust Probe In EU, May Have To Sell Part Of Its Services

Google’s lawyers went on to put Nadella through the wringer about Microsoft’s failed attempts at building popular mobile and browser products—be it Internet Explorer or Windows Phone, among others. They also had access to an internal Microsoft poll, which was unfortunately titled “Our Mobile Story Sucks”. Nadella never denied these points—but he reiterated that being better than Google was nigh impossible.

A troubled union between Google and Apple?: Nadella added that Google and Apple’s happy union might also be shaped by hidden concerns of retaliation. For example, if Google loses default status, it could bombard Apple users on apps like Gmail and YouTube to download Chrome. This hurts the interests of Apple’s own browser, Safari. Nadella also described the deal between the two tech giants as “oligopolistic”. 

In the case of its agreements with Android device manufacturers, Nadella said, “Google has carrots [in the form of revenue share payments], and it has massive sticks like we’ll remove Google Play…and without Google Play, an Android phone is a brick.”

If Google is always preferred, then why invest in search at all?: Mikhail Parakhin, Microsoft’s CEO of Advertising and Web Services, added that it’s “uneconomical” for the company to increase its mobile search investments, as they would be unable to distribute it at scale. As commentators noted, this argument threw a spanner in the works—if Microsoft isn’t investing as much in improving its search as Google, then how can it claim to be edged out of the market? That being said, Parakhin (and Apple executives) agreed that Bing performs better than Google’s search on desktop—despite this, Google is the default search engine on Apple’s Macs. These ‘preferences’ for Google may deter its competitors from competing at all. 

Microsoft’s Corporate Vice President for Business Development Jon Tinter further claimed that Microsoft offered to pay Apple over 100% of its revenues generated from redirected users, while Google may have only placed 60% on the table. Apple may have used this to drive up Google’s offer. “We were just big enough to play but probably not big enough to win, if that makes sense,” he concluded. That being said, that Apple chose the lower offer could support its argument that the deal was about the quality of the search engine itself, not necessarily the dollars exchanged.

AI might only entrench Google’s search engine dominance: Microsoft’s spoken a lot about the ongoing AI revolution—even launching an AI-powered Bing earlier this year. But this optimism is peppered with caution. Nadella is concerned that publishers might once again sign exclusive deals with Google, allowing it to train its AI models on their data. If that happens, competitors, like Microsoft, can’t crawl that data, or use it to train their own AI models. Bing’s competitiveness is seriously compromised then. 

“I worry that this vicious cycle I’m trapped in is only going to get more vicious,” Nadella said, adding that “everybody talks about the open web, but there is really the Google web.” He later asked, “what is publicly available today, will it be publicly available tomorrow?”.

“When I am meeting with publishers now, they are saying, ‘Google’s going to write this check to us, and it’s going to be exclusive and you have to match it,’” Nadella further claimed. “My main worry now, other than my early exuberance about an opportunity that we may have here, is: Is this going to be even more of a nightmare to make progress in search?”

Google also prevented Microsoft from accessing a search marketing tool: To be clear—SA360, or Search Ads 360, is Google’s search management platform that allows people to manage search marketing campaigns across engines. Its in-house automated bidding services help campaign managers compete for ad space too. Or, as Google puts it:

“Without Search Ads 360, you’d need to manage your ads and keywords on each search engine, and it would be much more difficult to analyze your ad/keyword performance across engines. You also wouldn’t have the automated bidding power of Search Ads 360 bid strategies. With Search Ads 360, you save time, reduce complexity, and have the ability to make better decisions and increase your Return on Investment (ROI) for search marketing.”

According to the DOJ, Google prevented Microsoft from accessing SA360, manipulating the search market to favour itself. Google argued that the idea of the company sharing its tools with a competitor was somewhat far-fetched. 

“We keep asking them to add Microsoft features to SA360, and they keep telling us to go pound on sand…that’s kind of where we are,” Nadella claimed.

Responding to the allegation separately, Google’s lawyers said “it’s like waiting for a Yankee fan to invite you to a Met game…Not gonna happen,” the tech giant’s lawyers said.

Outside of Microsoft—were other businesses hurt by Google’s search engine dominance?

DuckDuckGo takes the stand: CEO Gabriel Weinberg testified on how the self-described “privacy-focused” search engine was impacted by Google. The first issue—users found it difficult to switch to DuckDuckGo from whatever search engine they were using. Although we’re not entirely sure about what he means here, Weinberg added  “if you switch some of these defaults eventually you’re just going to be switched back to Google if you do nothing.”

DuckDuckGo also tried striking deals to make it the default search engine for private browsing on various browsers. But, this was unsuccessful too, because Google already had default search engine agreements in place with browsers, which specifically stopped browsers from using other search engines for private browsing modes. 

Google’s lawyers rebutted by arguing that in the European Union, some countries have the sought-after choice screen for default search engines. This could improve its uptake among users. Yet, DuckDuckGo’s market share in the bloc is even lower than what it is in the US. Weinberg argued that the EU’s screens could be designed more effectively, and that they currently didn’t allow consumers to make a good choice.

Branch adds its two cents: Branch initially emerged as a search engine for apps. For example, suppose your search engine’s bar was integrated with Branch. If you searched for ‘local courier’, you would receive results on the service from apps you’ve already downloaded, like Dunzo, Swiggy, or Porter. The search engine’s results would also recommend apps offering similar services that the user hadn’t downloaded yet. Branch offers opportunities for app distribution (and thus earning revenue) outside of familiar app stores. 

But when Branch’s Founder and former CEO Alex Austin pitched the service to various manufacturers, they declined because their pre-existing default search engine agreements with Google prevented it. Austin gleaned that these deals mandated that Google be the only “web-connected” search engine pre-installed on devices. To circumvent this, Branch developed “offline” searches, so that manufacturers like Samsung could integrate the service without backtracking on their Google deals. 

But, the offline search was a downgrade—in this case, Samsung limited Branch to scanning around 25 apps when responding to a search query. That was because the company had to verify that the app’s “deep links” didn’t connect to the Internet. 

Samsung executives, like ex-employee Patrick Chang, were aware that the company’s negotiations with Google to renew the default search engine deal could hurt Branch’s interests. In 2020, Chang sent a chat message saying:

“The current agreement is looking like google will own all search on device….This will completely kill all potential for any branch search and other future services….[A]ll this will be killed if this google agreement happens.” Later on, he followed that up with “this is probably Google being aware of Branch as you mentioned on their call and attempting to kill all of Branch’s attempts.”


STAY ON TOP OF TECH NEWS: Our daily newsletter with the top story of the day from MediaNama, delivered to your inbox before 9 AM. Click here to sign up today!


 

Written By

Free Reads

News

According to Russian investigators, Stone had published online comments that defended hostile and violent actions against Russian military personnel.

News

bank-owned P-PA services do not require any authorization, but will also have to ensure compliance with other requirements for P-PAs.

News

However, it is possible to opt-out of the clause by emailing an opt-out notice to arbitration-opt-out@discord.com within 30 days of April 15, 2024, or...

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...

News

Notably, Indus Appstore will allow app developers to use third-party billing systems for in-app billing without having to pay any commission to Indus, a...

News

The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...

News

Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ