The US Federal Government has rolled the dice against the highest echelons of Big Tech. The Fed has sued Alphabet’s Google for allegedly abusing its dominance in the search market. As prominent executives from Microsoft, Apple, and Google take the stand in the historic Google antitrust trial, stunning revelations have come to light. A Microsoft-Apple Bing chip deal was discussed in detail. However, it didn’t surpass the preliminary discourse phase, as per Bloomberg.
Could Microsoft be harboring a chip on the shoulder as Apple’s Bing negotiation with Google did not manifest into any concrete deal? The proposed deal aimed to replace Google as the default search engine on Apple products with Bing. Even so, specific details about the timing of these discussions and the price under consideration were not disclosed.
Apple, Microsoft Bing, And Google: Search Engine Deals And Antitrust Trial
Microsoft introduced Bing in 2009 but has struggled to gain significant market share in the search market, which is currently dominated by Google with an estimated 90 percent share.
In 2014, Google and Apple reentered into an agreement that allowed Google to have a coveted default slot, a rather prominent presence, on all Apple screens. Though the financial terms of this arrangement were never publicly disclosed, analysts from Fortune suggest that this agreement could generate approximately $15 – $20 billion in revenue-sharing payments for Apple in a given year.
What is intriguing to observe is that the Apple-Google search deal was first signed in 2002 and called for both tech companies to split the net revenue generated when users clicked on advertisements in Google search results, on Apple devices. In a 2016 amendment, a ‘joint-defense’ clause was inserted at Google’s behest, which prompted both companies to defend each other if either were ever sued by the government – the exact predicament springing up now.
In the biggest US antitrust trial in 25 years, a Microsoft Bing executive named Mikhail Parakhin testified on Wednesday that it was likely that Apple was never serious about switching from Google to Microsoft’s Bing as its default search engine in its devices, but rather retained the possibility as a ‘bargaining chip’ to negotiate more payments from Google.
“It is no secret that Apple is making more money by existing on Bing than Bing does.”
– Parakhin, Microsoft’s Chief of Advertising and Web Services.
Analysts view Google’s current antitrust lawsuit as one of the most substantial legal challenges to the tech industry, comparable to the government’s lawsuit against Microsoft in 1998.
Commenced on September 12, and expected to continue through November, the antitrust trial involving Apple, Microsoft, and Google, is seen as pivotal in determining the future role of technology companies in consumers’ lives.
Google Antitrust Trial: The Odyssey Of Apple-Microsoft’s Bing Chip
The ongoing antitrust case against Google underscores the significance of these discussions about selling Bing, and the power of search engines.
In the past, even a major tech partner Samsung’s consideration to switch to Bing, sent Google into a state of concern. However, according to WSJ, Samsung suspended the internal review after several months.
As per lead litigator Kenneth Dintzer, the US Department of Justice is aiming to address whether Google may have used similar agreements to lock out rival search engines such as Bing, Yelp, and Yahoo.
“Google’s contracts ensure that rivals cannot match the search quality and ad monetization, especially on phones. This loop has been turning for more than 12 years and always turns the wheels to Google’s advantage.”
Dintzer has dubbed the Big Tech antitrust trial, critical to the future of the internet and the competitive landscape in the search market.
Implications For Microsoft Bing And Google’s Antitrust Trial
Google’s strategies to maintain its search dominance have included striking deals with companies like Apple and Samsung to prominently feature its search engine on their devices. These deals could potentially derail Microsoft Bing from making inroads in the search engine market. Also, in Google’s antitrust trial, Apple’s Bing negotiation could reflect badly on the tech giant.
Google countered that it faces competition not only from traditional search engines like Microsoft Bing, but also from other online platforms that provide specialized information, such as Yelp and Amazon.
“There are lots of different ways that users access the Web other than default search engines, and people use them all the time.”
Google’s antitrust lawsuit, originally filed by the Justice Department in 2020, spans two presidential administrations, with US Judge Amit Mehta expected to issue a ruling in the 10-week trial early next year. If Alphabet’s Google is found to have violated the law, a subsequent trial will determine potential penalties.