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Sundar Pichai, CEO of Alphabet (NASDAQ:), on Tuesday defended Google against allegations of antitrust practices brought by the U.S. Department of Justice (DOJ), emphasizing the company’s competition with rivals such as Apple (NASDAQ:) and evolving online behaviors. Despite Google’s 90% market share, Pichai argued that the company faces significant competition and has always prioritized user choice.
The DOJ alleges that Google stifled potential competitors like Microsoft (NASDAQ:) and DuckDuckGo by paying $26 billion in 2021 to be the default search engine on various devices. This figure includes a substantial payment between $4 billion and $8 billion to Apple, a result of the iPhone’s significant market share.
During the renegotiation of a contract with Apple in 2016, Pichai expressed concerns about “query cannibalisation,” a situation where Apple could potentially redirect Safari queries to other platforms. He underscored that Google developed Chrome and Android to enhance web access and promote Google’s search, thereby bringing hundreds of millions of users online. Other companies, including Microsoft with its Edge browser, can use Chrome’s underlying technology and Android for free.
The government questioned why Google needs to pay billions for default status if its product is superior. They implied that Google uses its prime position to extract more from advertisers. Pichai had previously expressed concerns about being the default and favored offering a choice, as indicated in 2007 internal emails.
In Monday’s testimony, Pichai discussed Google’s strategies to maintain its dominance in online search. The government alleges that Google locked out rivals via exclusive deals with phone manufacturers and web browser-makers. During his cross-examination, Pichai confirmed that while Google does not prohibit choice screens, for those agreeing to the Revenue Sharing Agreement (RSA), providing a choice screen would not align with the agreement.
Pichai also addressed concerns about employee turnover, requesting monthly reports of losses to competitors, especially Apple. The DOJ criticized Google’s policy of not automatically retaining internal chat messages, alleging that Google systematically destroyed instant message chats through its history-off option.
A decision on the case is expected next year.
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