Microsoft CEO Satya Nadella Spoke At Google’s Antitrust Trial. Here Are 4 Major Takeaways From His Testimony

Microsoft’s CEO Satya Nadella took the stand Monday as the highest profile executive yet to testify in the Justice Department’s lawsuit against Google. 

The suit hinges on Google’s search business as the government seeks to prove that the Silicon Valley giant has used unfair tactics to entrench itself as the dominant search engine and choke competitors, including Microsoft’s Bing.

“You get up in the morning, you brush your teeth and you search on Google,” Nadella said, underscoring the sway the search engine has over people’s behavior and how they find anything on the internet. But Nadella also made clear Microsoft is still invested in search and beating Google. 

Here are the four biggest takeaways from Nadella’s testimony.

Nadella has been at Microsoft since 1992 and was instrumental in building Bing, the company’s search engine and the largest competitor to Google search in the world. During his testimony, Nadella told the court that Microsoft has invested $100 billion in Bing so far, although only one of them has managed to become so popular as to become a verb in the English language (it isn’t Bing). 

Nadella revealed that Microsoft expects a "paradigm shift" or government intervention will be necessary to make Bing as mainstream as its rival.

“I see search or internet search as the largest software category out there. We are a very, very low share player,” Nadella said. “But we continue to persist in it because we think of it as a software category we can contribute to.”

Apple, Nadella said, understands that Bing is competing with Google and has used that to its advantage. The iPhone maker charges Google a fee, as high as $10 billion by some estimates, although possibly more, to be the default search engine on Apple devices. 

Apple, meanwhile, has held Microsoft's Bing up as an alternative to “bid up the price” it charges Google, Nadella said. 

“Do you think Google would continue to pay Apple if there was no search competition? Why would they do that?” he told the court Monday.

For years, Google’s critics have alleged that the company uses unfair licensing practices for Android to ensure its products remain dominant in the market. Microsoft’s Nadella certainly agrees it seems.

Nadella said that Alphabet has demanded in the past that Microsoft use Google Search, and not Bing, in order to get a license to run the Android OS on the Surface Duo smartphone. The conversation involved the high level executives, including Nadella and Alphabet CEO, Sundar Pichai, he told the court.

Google has consistently argued that competition is a click away: If someone wants to use a different search engine, they can change the default from Google to whatever they like. They don’t, Google argues, because they don’t want to use anything other than Google. “People don't use Google because they have to — they use it because they want to,” Kent Walker, one of Google's lawyers and its president of global affairs, wrote at the start of the trial. "It's easy to switch your default search engine — we're long past the era of dial-up internet and CD-ROMs."

Microsoft’s Nadella called this argument “bogus.”

“Defaults are the only thing that matters,” he told the court. “It would be a game changer [for Bing] to be a default on Safari," he added, emphasizing that pre-configurations shape user choices.

“The distribution advantage Google has today doesn’t go away,” Nadella said. “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 cycle that I’m trapped in could even become even more vicious because the defaults get reinforced.”