Since 2009, Microsoft’s Bing has been striving to gain market share against Google. Nadella expressed that Bing faced significant barriers to competition with the search engine giant, largely attributed to Google’s arrangements with Apple. During a tense cross-examination, Nadella stressed the dominant position of Google in the search engine market.

This legal battle marks a substantial antitrust case against a major tech company in the US since the Department of Justice pursued Microsoft over two decades ago regarding the dominance of its Windows operating system.

Nadella lent support to the government’s argument that Google’s extensive data intake as the leading search engine globally created a network effect, enhancing its power for advertisers and users. He highlighted the importance of distribution in a successful search engine and mentioned Microsoft’s willingness to pay Apple significantly to have Bing as the default search engine on iPhones.

According to Nadella, being the default search engine is crucial, dismissing Google’s claims that users can easily switch to other applications. He expressed that achieving default status on Safari could be a game-changer for Bing. However, Apple has maintained its association with Google, benefiting from a lucrative revenue-sharing arrangement.

After facing rejection from Apple, Nadella disclosed that Bing remained a minor player in the search engine landscape. Microsoft continues to invest in Bing, anticipating a potential “paradigm shift” or governmental intervention to restructure the business.

Nadella also testified that, despite initial optimism, he no longer believed that the emergence of ChatGPT would significantly alter Google’s dominance in the search business. Microsoft’s recent integration of AI technology into Bing earlier this year led to expectations that Google’s position might be threatened. However, Nadella expressed concerns that Google could exploit its search dominance to pressure essential content providers crucial for training generative AI models.

“I worry a lot in spite of my enthusiasm that this vicious cycle can become even more vicious,” Nadella remarked, underscoring the potential challenges posed by Google’s influential position in the market.