Apple and Microsoft’s Secret Meeting: Is Bing Making More Money?
In a recent revelation during the ongoing Federal Trade Commission (FTC) antitrust suit against Google, it has come to light that Microsoft met with Apple executives in 2020 to discuss the possibility of selling its search engine Bing. However, the talks did not progress any further.
Bing used to be the default search engine on Apple products from 2013 to 2017, until Google took over as Apple’s preferred partner for search engines. The details of these discussions between Apple and Microsoft have emerged as part of the antitrust lawsuit, where the U.S. Department of Justice accuses Google of using similar agreements to lock out rival search engines.
During the trial, Mikhail Parakhin, Microsoft’s chief of advertising and web services, referred to Apple’s relationship with Bing as a bargaining chip. Parakhin stated, It is no secret that Apple is making more money on Bing existing than Bing does. This statement raises questions about the financial dynamics between Apple and Microsoft.
Google’s dominance in the search engine market has been a key focus of the trial. The company’s lawyers have argued that their existing market dominance allows them to collect extensive user data to improve search results and maintain their lead over competitors. However, there have been suggestions that search engines can improve results through artificial intelligence (AI) without relying heavily on user data.
Google lawyer Ken Smurzynski attempted to discredit this argument during questioning, highlighting that data, even first-party data, plays a crucial role in AI processing. Marketers are well aware that data is the backbone of AI’s ability to process information effectively.
The trial has also revealed how Google’s exclusive contracts with phone companies and manufacturers have hindered the efforts of other search engine providers. Branch Metrics Co-Founder Alexander Austin testified that Google’s agreements with companies like Samsung prevented his company from marketing its search engine app called Discovery for apps on smartphones.
According to Austin, during meetings with Samsung, the Android phone maker expressed concerns that Branch’s tools could conflict with Google. In a subsequent conversation during a product launch, Samsung informed Austin that they had to cut functionality because of a potential conflict with their contract with Google.
This scenario highlights the challenges faced by smaller companies trying to compete in the search engine market. Branch Metrics had hoped to revolutionize smartphone app searches, similar to what Google had done for internet searches. However, because of the existing agreements between Google and major companies, Branch Metrics had to limit the capabilities of its app to avoid interfering with Google’s lucrative partnerships.
These revelations bring into focus the allegations against Google regarding the use of agreements to stifle innovation and exclude rival search engines. It raises questions about the level of fairness and competition in the search engine market.
As the antitrust trial continues, the revelations from Apple and Microsoft’s secret meeting and the impact of Google’s exclusive contracts shine a light on the complex dynamics within the search engine industry. The trial will ultimately determine whether Google has engaged in anticompetitive practices and what consequences may follow.
It is crucial for regulators to carefully assess how Google’s dominance may be impacting competition and innovation in the search engine market. The outcome of this trial will have significant implications for the future of the industry and the options available to both consumers and search engine providers.
