Without irony, Microsoft CEO says Google unfairly dominates search

Nadella took to the witness stand on Monday, offering testimony in the Department of Justice's antitrust lawsuit against Google. In his comments, he explained how he believes the deal between Apple and Google to have Google the default search engine in Safari was harmful to Bing, Microsoft's own search service.

Due to the default agreements, "you get up in the morning, you brush your teeth, and you search on Google," Nadella said according to the Wall Street Journal. "With that level of habit forming, the only way to change is by changing defaults."

Microsoft was therefore in a "vicious cycle" due to Google's massive 90% market share, since it could continue to improve results and earn more revenue, which then is used to improve its results and maintain its monopoly.

Nadella also declared that the thought of there being real choice for consumers in the search engine market is "bogus."

According to Statcounter, Google.com has an 83.27% market share of the global mobile search engine market, excluding regional variations, while Bing only has a 0.46% share. On desktop, Google.com has 74.34%, Bing has 8.15%.

On desktop, Chrome is the most popular browser at 64.31%, with Safari at 12.46, and Microsoft Edge at 10.64%. However, Microsoft's Windows has the largest desktop operating system share at 68.44% while macOS is 20.14%.

The criticism of the arrangement from Nadella is apt, given Microsoft's history in the browser wars. At one point, Microsoft agreed to provide a browser ballot, allowing users to freely choose which browser to install onto Windows, rather than defaulting them to Internet Explorer.

And, Microsoft now has a larger percent of operating systems installed on computer, than Google has for search on Desktop.

An AI query

The testimony also arrives after a report that Microsoft discussed selling Bing to Apple in 2020, but discussions never left the exploratory phase.

Questioned for about an hour, Nadella was also asked whether innovations in AI could be used to beat Google. Nadella referred to search as "the biggest no-fly zone of all," in that there are limits as to what AI could do to change the search market.

"The distribution advantage Google has today doesn't go away, in fact, if anything, I worry a lot that - even in spite of my enthusiasm that there is a new angle with AI - this vicious circle that I'm trapped in could even become even more vicious because the defaults get reinforced."

During cross-examination, Google lead trial counsel John Schmidtlein offered that Microsoft "was caught sleeping when Google introduced Chrome." Nadella agreed in part to the point, responding "Google did a good job of innovating in the browser."