Sundar Pichai argues in court that Google isn’t evil, it’s just a business

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Pichai spent a chunk of his US v. Google testimony answering for Google’s past — and explaining where all that search-default money comes from.

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Google CEO Pichai Testifies In Department Of Justice Antitrust Case

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You might not expect an antitrust trial focused on Google’s overwhelming dominance in the year 2023 to spend a lot of time talking about Internet Explorer circa 2005. But you’d be wrong.

Google CEO Sundar Pichai spent a good chunk of Monday in a DC courtroom, testifying as part of the ongoing US v. Google antitrust trial. He stood at a podium instead of sitting (apparently he hurt his back), often with a magnifying glass in his hand, pushing his glasses up on his forehead as he squinted down at a binder full of exhibits. One exhibit proved particularly interesting: a letter from Google’s then-top lawyer David Drummond, sent on July 22nd, 2005, to Microsoft’s then-general counsel Brad Smith. 

Drummond’s letter concerned the launch of Microsoft Internet Explorer 7, the new browser that would have its first beta release five days later. (Not long after, Pichai and a small team would start to work on Google’s own browser, Chrome, which eventually crushed Internet Explorer entirely.) Drummond had a problem with a new feature in IE7: a small search bar off to the right of the browser’s URL bar. By default, Drummond said, anyone who typed in that search bar and hit enter would do a search on MSN. 

Well, sort of. To summarize about 20 minutes of increasingly exasperated back-and-forth between Pichai and US Justice Department lawyer Meagan Bellshaw, here’s how Google saw it: Microsoft planned to “honor” the default search engine setting that users chose in previous versions of IE, but in those previous versions, that setting was hidden and functionally useless. Hardly anyone knew it existed, much less changed it. This, Drummond argued, was an actively user-hostile thing to do. “And since very few users are aware of the auto search feature in previous versions of IE (as even the employees from Microsoft acknowledge),” he wrote, “that original default setting has very seldom been changed to popular search providers that users actually employ, like Google.”

Drummond offered an alternative. Microsoft should offer a choice screen to new IE7 users, he wrote, letting them choose which search engine would be their default in the browser. “Google believes that the search market should remain competitive,” he said.

One way to look at this 2005 letter is as a relic of a very different time. Microsoft was tech’s dominant player and a ruthless competitor, Pichai argued, and it was doing an acceptable thing — prioritizing its own products — in a uniquely shady way. (He noted both that Microsoft didn’t make the changes and that tech companies have only gotten more ruthless about self-prioritizing.) Another way to look at this letter is that it demonstrates exactly what’s wrong with how Google operates in the search market now.

At the beginning of Pichai’s testimony, Google lawyer John Schmidtlein had Pichai walk through his life and work history, from growing up in India to running one of the largest companies on the planet. Pichai joined Google in 2004, and Schmidtlein asked several times why he believed in Google and whether he believed it had changed over time. “I saw the potential,” Pichai said. “I realized for the first time the internet would touch most of humanity and it was a once-in-a-generation opportunity.” He quoted Google’s original mission without missing a beat, and said that “if anything, it’s more timeless and relevant than ever before.”

Search is a fast-changing, vastly complicated product, Pichai said, and only becomes more so over time. He made the case that Search, Android, and Chrome are not only good products, but are good for the internet as a whole because they’re open-source products that make people use the web more. “People use Android to build smartphones at prices as low as $30,” Pichai said, “and it’s what has helped bring hundreds of millions of people online.”

The Google version of this case is simple, really. Google’s search engine is a good product, it says. Google took over the web by making it accessible to billions of people around the world, and it’s still the same company Pichai runs today.

Bellshaw’s questioning took a vastly different tack, back to the DOJ’s central stance of hammering home the importance of defaults. She asked Pichai a version of the question “You believe defaults are valuable, right?” over and over throughout her questioning. She showed Pichai a 2007 email from a Google product strategy meeting where Google’s Nitin Sharma shared data noting that when people changed their browser homepage to Google, they immediately started to do 15 percent more Google searches, and when they switched away, they did 27 percent less. “Nitin argues that focusing on homepage market share is one of the most effective things we can do to make gains in search market share,” read an email summarizing the meeting that was sent to Pichai and others in Google’s leadership team.

A few minutes later, Bellshaw brought up Drummond’s letter as more evidence that Google understands the value of defaults. She kept presenting lines that a Google executive wrote 18 years ago that could very well be the words of a DuckDuckGo or Brave employee now. “The problems with the default setting are further compounded by how changes to the default are handled,” Drummond wrote. “As you know, most end users do not change defaults.”

The money Google spends to be that default — which we now know to have been roughly $26.3 billion in 2021 alone — was a key focus of Pichai’s testimony, as it has been throughout the trial. During Schmidtlein’s questioning, Pichai argued that the deals are about more than just money. Google uses the rev-share structure to incentivize Android OEMs like Samsung, HTC, and Motorola to promote their devices, he said, and even maintain them better over time. (When Judge Amit Mehta asked how that worked, Pichai said Google makes some of its rev-share money dependent on devices getting security updates. For some partners, he said, “more effort goes into developing the next version, and updates are costly… so sometimes they make tradeoffs.”)

Both Bellshaw and Schmidtlein also asked about Google’s deal with Apple, one of the most-discussed topics of the trial. Schmidtlein prompted Pichai to explain the 2016 meetings that led to a renegotiation of the deal, which Pichai said was largely about Apple looking to increase its share of the revenue coming from Google searches on Apple devices. There was another topic on the table, though: “We wanted to make sure,” Pichai said in testimony, “that as we contemplate a long-term deal, the concept of default was preserved in a consistent way.”

Google was worried at the time that Apple might make a deal with, say, Amazon, to capture shopping searches and send them straight to the retailer. Google also worried about Apple’s new Suggestions feature in Safari, which would help users navigate directly for some queries rather than sending everyone to Google’s results page. But ultimately, Pichai said the same thing that Apple’s Eddy Cue said in his testimony: both sides wanted a deal, and they eventually got it done.

Google says it spends lavishly on these deals because, well, they’re a good deal. They make more people do more Google searches, everybody involved in the deal gets paid, and in such a complex and fast-moving landscape, that’s the only way to compete. It’s a business move, in other words, and there’s a big difference between a business move you don’t like and one that’s illegal. The DOJ, on the other hand, says Google uses its platforms and partners as a wedge to keep out any possible competition. And that it has become exactly the monopolistic monster that it decried nearly two decades ago.

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