Google is embroiled in an antitrust case in which the tech company began squaring up against the U.S. Department of Justice.
It's argued that Google is the primary search engine amongst the public, in part, because its parent company Alphabet is paying big tech companies like Apple, Samsung, and Mozilla to place the product as the main and default search engine in their devices and browsers.
These payouts, the U.S. Department of Justice argues, are anticompetitive as they discourage other tech companies from developing their own search engine in a marketplace where a multibillion-dollar cash reserve is necessary to play the game.
As the tech giant Alphabet faces a massive antitrust lawsuit, it's the U.S. versus Google.
And slowly, revelations surround the case have presented how the company operates, and how it's using its massive resources to do what it pleases. And this time, Microsoft reportedly said that it wanted to sell Bing to Apple.
If ever the deal went through, Google would have no longer been the default search engine on iPhone.
According to reports, back in 2020, Microsoft executives met with Eddy Cue, Apple’s services chief, to offer a deal that would make Apple take control from Bing from Microsoft, through an acquisition.
Cue is credited with brokering the agreement between Apple and Google to get the search engine as the default on the iPhone, and that Microsoft is betting its chances.
However, the talks never really reached any actionable stage, and were mainly exploratory.
Speaking at the federal antitrust trial, Microsoft executive Mikhail Parakhin alleged this was despite Microsoft offering to pay Apple more than Google, just for Bing to be the default search engine on Apple devices.
The tech giant’s CEO of Advertising and Web Services also said his company offered Apple more than 100% of the revenue or gross profit to make Bing its default search engine.
Microsoft didn't even care if it loses several billion dollars on a short-term basis, as long the investment can pay off in the long end.
The company created the 'giveaway', just to dethrone Google on Apple devices.
But the proposal was rejected because of Apple's deal with Google.
Apple’s decision to reject Microsoft’s higher monetary offer for Bing as the default search engine implies that the Google deal might not be solely based on financial considerations.
This suggests that Apple sees Google Search as a product far superior to Microsoft Bing.
In response to this, Apple’s Eddy Cue has indeed said that Apple picked Google because it is the superior product.
"I didn’t think at the time, or today, that there was anybody out there who is anywhere near as good as Google at searching," Cue told the court. "Certainly there wasn’t a valid alternative."
The top Apple executive testified that the iPhone-maker agreed to "support and defend" the contract with Google in any regulatory challenges including the Justice Department’s lawsuit.
Apple doesn't care if it's paid more money. All it cares is offering a better third-party product for its users.
Parakhin told the court that Microsoft literally had no chance.
"We were just big enough to play but probably not big enough to win, if that makes sense," he said.
"The optimal thing for Apple to have done — and again, I think in closed session, maybe we’ll end up looking at some of the sort of math on this — would have been to have switched to Microsoft in the United States, taken our aggressive offer there, and continue with sort of Google in the rest of the world."
Previously, Microsoft said that Apple used Bing as a "bargaining chip" to make Google pay.
Bing has long been the underdog of search engines. In fact, it's already the punchline in search engines.
If competing directly with Google Search, the search engine from Microsoft stands no chance. But things a bit shifted, when Microsoft poured billions of dollars into a deal to integrate OpenAI’s tech with its products.
In the era where generative AIs captivate the audience, and touted to soon become the replacement of search engines, which have also put fear into Google, Microsoft is showing that with its generative AI-powered Bing, it can be more than just a traditional search engine.
However, the two companies are reportedly on shaky ground, because Microsoft is only a big investor to OpenAI, but doesn’t technically own it.
In return of providing the generative AI to power Bing, Microsoft would offer cloud computing infrastructure needed to run the AI. Microsoft demands that in exchange for a hefty chunk of profit until the tech startup is capable of paying Microsoft back.
There have been some reports of feuds and disagreements between Microsoft and OpenAI.
For example, it was reported that OpenAI had warned Microsoft not to rush the integration of its GPT-4 technology with Bing, but Microsoft ignored the warning and launched Bing Chat anyway. Then, the two companies also have different approaches to AI safety and ethics. In addition, there have been some concerns about Microsoft's growing influence over OpenAI.
Some people have worried that Microsoft could use its investment in OpenAI to gain an unfair advantage in the AI market.