UNITED STATES NEWS

Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says

Sep 27, 2023, 12:33 PM | Updated: 3:08 pm

WASHINGTON (AP) — Apple was never serious about replacing Google with Microsoft’s Bing as the default search engine in Macs and iPhones, but kept the possibility open as a “bargaining chip” to extract bigger payments from Google, a Microsoft executive testified Wednesday in the biggest U.S. antitrust trial in a quarter century.

“It is no secret that Apple is making more money on Bing existing than Bing does,’’ Mikhail Parakhin, Microsoft’s chief of advertising and web services, said in U.S. District Court in Washington. The comment drew a laugh from the courtroom. Parakhin was describing Microsoft’s years of futility trying to supplant Google on Apple devices.

Analysts estimate Apple collects $15 billion to $20 billion a year in revenue-sharing payments from Google in return for giving its search engine the coveted default slot on Apple’s devices. The revenue is generated when users click on advertisements in search results.

The U.S. Department of Justice accuses Google of using similar agreements to lock out rival search engines such as Bing and Yahoo, stifling innovation. The trial began Sept. 12 and is expected to continue into November.

Another witness, the founder of startup Branch Metrics, testified that Google’s exclusive contracts with phone companies and equipment manufacturers sabotaged his company’s attempts to market a search engine for apps on smartphones.

Alexander Austin said his Palo Alto, California-based company was forced to scale back what its product could do to avoid running afoul of Google’s agreements with companies like Samsung and Verizon that make Google’s search engine the default choice on digital devices. Branch Metrics had hoped to do for smartphone apps what Google had done for searching the internet — and to collect advertising revenue when users clicked on apps such as DoorDash.

“We had very high hopes and good feedback from advertisers,’’ he said.

But Branch Metrics’ potential partners worried that the app search product, called Discovery, would violate their lucrative agreements with Google. Branch Metrics had to limit the app results and to avoid links to the internet. The result was that it could not monetize its app search engine.

“It felt like there was injustice being done that a product like this could not see the light of day,” Austin said.

Google lawyer Ken Smurzynski, questionng Parakhin earlier, sought to knock down one of the government’s key arguments: that Google’s existing market dominance allows it to collect massive amounts of user data to improve search results and widen its lead over competitors.

Google’s team counters that dramatic improvements in artificial intelligence mean search engines can improve results without relying on user data. Smurzynski introduced a document in court that included comments about that from Microsoft CEO Satya Nadella.

“AI will fundamentally change every software category, starting with the largest category of all – search,” Nadella said in February blog post for Microsoft.

But Parakhin compared AI to driverless cars: not quite ready for prime time. Asked by U.S. District Judge Amit Mehta whether a search engine could be built solely off machine learning, he replied: “We’ve seen companies try. We haven’t seen anybody succeed.”

Mehta likely won’t issue a ruling in the antitrust case until early next year. If he decides Google broke the law, another trial will determine how to curb its market power.

One option would be to bar the Mountain View, California-based company from paying Apple and others to make Google the default search engine.

_____

AP Business Writer Michael Liedtke contributed to this story.

United States News

Smoke rises from the Gaza Strip after Israeli strikes on Saturday, Dec. 9, 2023. (AP Photo/Leo Corr...

Associated Press

Israel presses on with Gaza bombardments, including in areas where it told civilians to flee

RAFAH, Gaza Strip (AP) — Israeli warplanes struck parts of the Gaza Strip overnight into Saturday in relentless bombardments, including some of the dwindling slivers of land Palestinians had been told to evacuate to in the territory’s south. The latest strikes came a day after the United States vetoed a United Nations resolution demanding an […]

4 hours ago

FILE - A marquee promoting a fundraiser with President Joe Biden is on display outside the Lunt-Fon...

Associated Press

Big money, fancy homes, old jokes — inside Joe Biden’s fundraisers

LOS ANGELES (AP) — If you’re a Democrat with money to burn and friends in high places, you can spend thousands on tickets to a fundraiser with President Joe Biden. If not, keep reading to see what you’re missing. With an election year around the corner, Biden is accelerating his fundraising to prepare for an […]

7 hours ago

FILE - Republican presidential candidates from left, former UN Ambassador Nikki Haley, Florida Gov....

Associated Press

DeSantis, Haley and Ramaswamy will appear in northwest Iowa days after a combative GOP debate

SIOUX CENTER, Iowa (AP) — Republican presidential candidates will cross paths again in Iowa just days after a fractious debate and as the countdown to the caucuses nears the one-month mark. Florida Gov. Ron DeSantis, former United Nations Ambassador Nikki Haley and businessman Vivek Ramaswamy will make their case — this time without the others […]

7 hours ago

FILE - Republican presidential candidate and former President Donald Trump speaks to Texas state tr...

Associated Press

Appeals court upholds gag order on Trump in Washington case but narrows restrictions on his speech

A federal appeals court in Washington on Friday largely upheld a gag order on former President Donald Trump in his 2020 election interference case but narrowed the restrictions on his speech.

11 hours ago

FILE - Migrant families wade through shallow waters toward Roma, Texas, March 24, 2021. A federal j...

Associated Press

Federal judge prohibits separating migrant families at US border for 8 years

A federal judge on Friday prohibited the separation of families at the border for purposes of deterring immigration for eight years.

12 hours ago

Associated Press

Indiana secretary of state appeals ruling for US Senate candidate seeking GOP nod

INDIANAPOLIS (AP) — The Indiana secretary of state is appealing a ruling that a law stipulating voting requirements for a candidate’s party affiliation is unconstitutional in a decision that lifted the hopes of a U.S. Senate hopeful who wants to run as a Republican. The Indiana attorney general’s office filed the notice of appeal Friday […]

12 hours ago

Sponsored Articles

Follow @KTAR923...

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

Follow @KTAR923...

West Hunsaker at Morris Hall supports Make-A-Wish Foundation in Arizona

KTAR's Community Spotlight this month focuses on Morris Hall and its commitment to supporting the Make-A-Wish Foundation in Arizona.

...

Midwestern University

Midwestern University: innovating Arizona health care education

Midwestern University’s Glendale Campus near Loop 101 and 59th Avenue is an established leader in health care education and one of Arizona’s largest and most valuable health care resources.

Apple leverages idea of switching to Bing to pry more money out of Google, Microsoft exec says