Alphabet CEO Sundar Pichai testified in the Google antitrust trial and acknowledged the importance of default settings. However, he argued against the government’s position that defaults are the sole determinant. He contended that the substantial annual payments Google makes to Apple, estimated at $18-20 billion, to secure its position as the default search provider in Safari are primarily driven by concerns about competition from Apple, rather than an attempt to maintain a Google Search monopoly.
In other words, Google believes it’s more cost-effective to continue paying Apple to keep Google Search as the default on iPhones rather than risk the emergence of an Apple-powered search engine or a competing rival. Pichai also pointed out that Apple’s design and user experience heavily influence this decision and questioned how the experience would change without the financial incentive, as reported by the New York Times.
Pichai also argued that Google’s agreements to be the default search engine on various mobile and desktop browsers, representing a $26.3 billion expenditure in 2021, foster competition. This stance is contested by rivals like Microsoft.
The Department of Justice is trying to prove that Google’s 90 percent market share results from unlawful practices, including paid deals that stifle competition and anticompetitive technical barriers. Google, on the other hand, maintains that it simply offers the best search product.
The government’s case has centered on the significant influence of default settings on user behavior, as many people tend not to change their default settings, as evident in the advertising industry’s efforts to have users opt-out of data sharing. This issue has become a focal point in the antitrust trial.
A recent government presentation by Professor Antonio Rangel cited various instances of internal Google communications emphasizing the importance of default settings, including a 2005 email objecting to the bundling of MSN Search with Internet Explorer due to the challenge of altering default settings.
Another 2019 email discussed concerns about a regulatory requirement for browsers to offer a choice screen for selecting a search engine, with Google expressing reservations about the impact on their position as the default search engine in Apple’s Safari browser.
While there may be no smoking gun, the released internal documents shed light on Google’s ability to control revenue from search ad auctions to achieve specific financial outcomes. These documents reveal Google’s use of various settings and technologies to influence ad performance and revenue.
In one email exchange, Chrome’s role as a means to serve Google Search is emphasized, with concerns about the potential loss of value if users are allowed to change the default search engine in Chrome.
Additionally, another email chain discusses Google’s response to the growing popularity of DuckDuckGo and the emphasis on privacy in search. The government’s case relies on these documents to potentially impact Google Search if they prevail in the antitrust trial, which is expected to conclude in mid-November.
