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Apple used Microsoft as a ‘bargaining chip’ to make Google pony up billions for the search bar, exec testifies

Sep 28, 2023 - fortune.com
Microsoft executive Mikhail Parakhin testified in a U.S. antitrust trial that Apple used Microsoft's Bing as a bargaining chip to secure larger payments from Google. Parakhin stated that Apple earns more from Bing's existence than Bing itself. Google pays Apple an estimated $15-$20 billion annually for making Google the default search engine on Apple devices. The U.S. Department of Justice alleges that Google uses similar agreements to exclude rival search engines like Bing and Yahoo, thereby suppressing innovation.

The trial also heard from Alexander Austin, founder of startup Branch Metrics, who claimed that Google's exclusive contracts with phone companies and equipment manufacturers hindered his company's efforts to market a search engine for apps on smartphones. Austin's company had to limit its product's capabilities to avoid violating Google's agreements with companies like Samsung and Verizon. Google's legal team argued that advancements in artificial intelligence allow search engines to enhance results without depending on user data.

Key takeaways:

  • Apple reportedly used Microsoft's Bing as a 'bargaining chip' to secure larger payments from Google, according to a Microsoft executive's testimony in a major U.S. antitrust trial.
  • Apple is estimated to earn between $15 billion and $20 billion annually from Google for making its search engine the default on Apple devices.
  • The U.S. Department of Justice accuses Google of using similar agreements to exclude rival search engines like Bing and Yahoo, thereby stifling innovation.
  • Google's legal team argues that advancements in artificial intelligence allow search engines to improve results without relying on user data, a point contested by Microsoft's chief of advertising and web services.
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