US v Google: Four Big Takeaways from Google CEO Sundar Pichai’s Testimony

In his first testimony as part of the United States’ blockbuster antitrust trial against Google, CEO Sundar Pichai took the stand Monday as a witness for the company’s defense. 

Pichai is the latest tech A-Lister to take the oath in court as part of the trial, which has also seen current and former executives at Microsoft, including CEO Satya Nadella, and others at DuckDuckGo, Samsung, Apple and others testify as part of the Department of Justice’s case against the tech giant as it seeks to prove Google has an unfair and unlawful monopoly over search. 

Pichai, unsurprisingly, defended Google’s approach and its payments to phone makers and others to be the default search engine — a practice that Microsoft CEO Satya Nadella had previously told the court had hurt the Window’s maker’s browser and search business, Bing, which Pichai denied.

Here are four takeaways from his testimony worth paying attention to:

Google Is Proud To Pay to Be the Default Search Engine

Pichai confirmed a belief at the center of the Justice Department’s argument: Google does pay a hefty fee to be the default search option on mobile devices and web browsers. 

"We're paying for defaults. That's correct,” Pichai said in court. “We pay for preload exclusivity on a device-by-device basis.”

In previous testimony on Oct. 27, Prabhakar Raghavan, Google’s head of search and advertising, disclosed that in 2021 alone, the company paid $26.3 billion to device manufacturers to secure the premium position for the search engine.

Rival companies have argued that being the default option gives Google a competitive advantage since consumers don;t typically change default settings. 

"Defaults have strong impact,” Pichai said, as lawyers asked about a 2007 document that showed 75% of people do not change defaults.

That’s why Google pays Apple, he explained. “We know it would lead to increased usage of our products and services. There’s clearly value to that, and that’s what we were looking to do” with Google’s distribution deals, he said.

Microsoft’s Browser Issues Pushed Google to Make Chrome Great

Although Google pays other companies for the default option, the popularity of its Chrome web browser also helps it maintain a lead in search. Pichai explained on Monday that in 2008 when Google’s Chrome made its debut, other companies like Microsoft had stopped innovating their own browsers — and that pushed Google forward.

“We realized early on that browsers are critical to how people are able to navigate and use the web,” Pichai said during questioning by Google lawyer John Schmidtlein. 

“[But] the browser market at the time had kind of stagnated… They [Microsoft] were not that incented to improve the browser," he added.

Most of Google’s $26.3 Billion for Search Defaults Flows to Apple

The Justice Department’s case hinges on proving that Google’s payouts to Apple and other device makers to be the default search engine harms competition. But Pichai explained that Google’s arrangement with the iPhone maker is very different from other paid partnerships with telecom companies and device manufacturers. 

Unlike telecom companies and manufacturers who control limited portions of the market, [Apple is both the [original equipment manufacturer] and they have control over their telecom channels,” Pichai said as he suggested that Apple payouts are much higher.

Analysts believe that Apple accounts for the largest chunk of Google’s $26.3 billion search deals.

Google Once Alleged Microsoft’s Internet Explorer Undermined Competition 

Google had previously raised concerns over Microsoft’s decision to make Bing the default search engine on Internet Explorer, its now defunct browser, and Edge, Explorer’s replacement, court documents showed.

“We are deeply concerned about the potential of harm to the competitive process from Microsoft’s actions,” Google wrote in 2016. The Justice Department is now using Google’s own words as an exhibit to prove that these practices do undercut the competition.

But Pichai pushed back. He claimed that his company’s agreements are standard promotional agreements, whereas with Microsoft, he claims, users were not adequately informed they could change their search engine options.