Google’s CEO Tim Cook’s Google Search Proposal: How Apple and Google Will Make Sense of the Google Adversarial Intellectual Property
If Google prevails, the company will likely be able to continue its same business dealings for the time being. It’s still not clear how Judge Mehta would rule if the Justice Department was in favor. It can be fines, exclusive agreements, company restructuring, or anything in between.
Along with Pichai, Google is planning to call at least 10 other witnesses. The trial is expected to be finished by the end of November. There is no jury and the judge will give the final ruling in the bench trial.
During the trial, the Justice Department presented evidence that Google paid Apple at least $10 billion a year to guarantee it was the default search engine on devices like the iPhone and iPad. Apple’s senior vice president of services testified that the deals were beneficial to both companies.
In late 2018, Google CEO Sundar Pichai floated a bold idea to Apple CEO Tim Cook. Cook told Pichai that he wanted to be “deep, deep partners, deeply connected where our services end and yours begin,” according to the notes from the meeting. Pichai responded with a proposal: What if Apple preinstalled a Google Search app on every iOS device?
He was working on the search toolbar when he joined the company. He later led the team that created the company’s CHROME browser, which features a majority of search done on the internet.
Google began its defense last Thursday and is expected to continue to hit on this same idea over the next three weeks. And there are few people more qualified to talk about its search products than CEO Sundar Pichai.
“Microsoft has failed to invest, has failed to innovate in a way similar togoogle, in many areas that have nothing to do with scale.”
Though the topic of antitrust may sound bland, the Google trial has experienced its fair share of intrigue. There are allegations of document destruction and information about billion dollar deals between companies. The witnesses brought by the government included experts from Apple and Microsoft, who were trying to prove that Google broke the law.
The New York Times and other news organizations petitioned the judge to conduct the case in an open courtroom because it became so pervasive.
While some information about Google’s business dealings came out in court, a lot was presented behind closed doors. Half of the four hour testimony was closed to the public. Throughout the course of the trail, Google continually fought to seal documents and shutter proceedings in public court.
Executives from other smaller search engines testified that they couldn’t gain market share because of the exclusive deals with Google.
“Everybody talks about the open web, but there is really the Google web,” Nadella said during his testimony. The distribution advantage still exists, but it doesn’t go away.
The Justice Department called dozens of other witnesses. They included Microsoft CEO Satya Nadella, who testified that he unsuccessfully tried for years to get Apple to switch the default browser on its devices from Google to Microsoft’s Bing. Without being able to do that, he said, even a company as big as Microsoft couldn’t compete.
“The Microsoft case was, at the time, talked about as the case of the century,” said John Kwoka, a Northeastern University economics professor who researches antitrust. “But that was the last century, so we have a new one: new century, new potential landmark case.”
For the past six weeks, the Justice Department and dozens of top state prosecutors have tried to prove that Google illegally used its monopoly power to ensure its search engine remained on top.
In 2018, Pichai said in testimony, Apple was concerned about a decline in revenue growth from their rev-share deal. Executives complained that the revenue Apple was receiving from the partnership wasn’t as much as it was getting from the rest of the world. Some ideas were offered up by Google about what may be causing the discrepancy. The new product from Apple called “Siri Suggestions” helps users get where they were going faster for some queries instead of sending all of their answers to the internet giant. According to notes shared by the partnerships executive Don Harrison after the meeting, Apple is in control of the amount or type of traffic received by the Safari browser.
That’s when Pichai made his case. When discussing how to encourage search, Harrison said that Pio talked about the idea of trusting us with what they are searching for, and considering us building an app. Tim listened but did not react to this specifically other than noting we had different strengths.”
Pichai testified on a number of topics, including his concept of attorney-client privilege and the legal reaction to Internet Explorer 7. But it was the Apple deal, as always in this case, that seemed to linger over everything.