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Case to break up Google hinges on 'four taps and a swipe': Report

Microsoft ended up losing its monopoly trial, but after an appeal the company settled in the early aughts with the Justice Department

iphone

Apple defended its practice of selling default placement to Google by arguing that it’s “pretty easy” to change

Bloomberg
By Austin Carr

The core of the US government’s argument that Google is an illegal monopoly is a process that involves, on an iPhone, exactly four taps and a swipe. That’s what it takes to switch search engines. To explain it step by step, prosecutors called to the witness stand on Sept. 26 one of Apple Inc.’s most powerful executives, Eddy Cue.
Presented with screenshots of an iPhone displayed on a flat screen, Cue sounded like a technician at the Genius Bar. “The Settings app, by default when you buy a new phone, is on the main screen,” he said. “When you tap on that Settings, you get a list.” He went on: “You tap on Safari, and then you have ‘search engine’ listed there. It would show you what the current search engine is that you’re using as the default. And then if you tap it, you get a list of choices, and you can pick any of them.”

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“Not a difficult process,” Cue said.

Seen another way, it’s a labyrinth that most iPhone owners will never bother to enter and one that unfairly compounds Google’s lead over rivals such as Microsoft Corp.’s Bing, drives search startups out of business and enriches Apple, which earns billions of dollars annually for setting Google as the default. Whether or not the court agrees that Cue’s instructions are simple enough to follow will help determine whether Google faces legal consequences that could go as far as breaking up the company.

The trial, now about halfway finished with Google set to begin formally presenting its defense Thursday, is a trembling fault line jagging the tectonic plates of big tech. Much of the focus so far has been on hush-hush contract negotiations between top brass from the trillion-dollar club, including Google Chief Executive Officer Sundar Pichai and Microsoft CEO Satya Nadella. But the lawsuit also offers a rare and revealing look at the incentives, often invisible to users, that have reshaped the ways we interact with technology.

US v. Google is the nation’s biggest antitrust case since Microsoft’s in 1998. That suit dealt with more straightforward allegations of anticompetitive behavior. Microsoft bundled its Internet Explorer browser with its dominant Windows operating system and pressured computer makers and web providers to adopt the application and cut off distribution of rival Netscape. Netscape’s popular Navigator browser, which retailed for $49 in the mid-1990s, was suddenly a hard sell after Internet Explorer came preinstalled for free on most new PCs. The Google case is more complicated because Google and most other search engines have long been free. The only real cost of switching, at least on an iPhone, is those four taps and one swipe. So the Google trial is, in a sense, about app design.

Lawyers for the government and Google have sounded at times over the past month of court proceedings like user-interface (UI) designers, with prosecutors debating the significance of iconography, toggle buttons and drop-down menus. While the government’s lawsuit is broadly about the legality of bundling services together to the detriment of consumer choice, the case is symbolized by a small arrangement of pixels on a screen.

John Schmidtlein, Google’s lead litigator, argued that the company’s products have won because they’re simply superior to what the competition offers. Google’s default deals were inked chiefly on merit, he claimed, and users can change settings in “a matter of seconds.”

Schmidtlein did his own walkthrough of Android and noted that the Google search widget can be removed from the home screen with a single “long tap” and another quick tap. “It's gone,” he said.

Yet, testimonies from Nadella and the founders of search startups DuckDuckGo and Neeva Inc. presented compelling arguments that a substitute can’t credibly compete with a default. Darin Fisher, who was the vice president of engineering for Google’s Chrome web browser until early 2021, said in an interview that the power of defaults is “massive.” (Fisher, who briefly worked at the defunct Neeva, didn’t testify in court, although his former boss did.) “The more things that require clicks and more scrolling and UI interactions, the more likely a user will not make it through,” Fisher said. “It’s design 101.”

And the suggestion that Apple and Google design their systems to make it easy to switch defaults? “Oh my God,” Fisher said, “such bulls---.”

‘A good user experience'
 
The origins of Google’s antitrust problems trace back to the mid-2000s. In the forever hunt for web advertising dollars, executives were looking for ways to expand Google’s reach through its own software and partnerships with Apple and Mozilla, maker of the Firefox browser. And those negotiations over revenue sharing were intensifying as browser makers wondered how much Google was willing to pay to be the default search engine.

Google has long presented itself as a champion of customization and choice. The internal push to nab preselections represented a wrinkle in this design philosophy. Pichai, who was leading development of Google’s Chrome web browser years before becoming CEO, was especially concerned about paying for preference, according to emails disclosed in the trial. “We should encourage them to have Yahoo as a choice in the pull down or some other easy option,” Pichai wrote to colleagues in 2007. “I don’t think it is a good user experience nor the optics is great for us to be the only provider in the browser.”

Attorneys for Google argued defaults aren’t that effective anyway, citing examples of search distribution deals Microsoft struck with BlackBerry, Nokia and Verizon that failed to move the needle for Bing. People frequently went through the steps to switch to Google.

Yet, internal data muddies the story. Google research from 2007 disclosed in court showed that when users altered their browser homepage to a non-Google website, searches dropped 27%. The Justice Department claimed that 50% of every search conducted in the US is facilitated through a default purchase by Google.

The prosecution went to great lengths to highlight how Google’s dominance has handicapped a generation of search startups, including Neeva and DuckDuckGo, but it’s another trillion-dollar corporation, Microsoft, with probably the most to gain from a government victory in court. Which explains why its CEO was such a stalwart witness for the government’s case.

In his testimony, Nadella suggested there could be profound consequences for innovation in AI and whatever comes next if the tech industry continues on this path of paid-for software placements. He claimed Bing’s own attempts at paying for defaults failed because Microsoft was too late. Habits were hard to break when Google reached 97% market share on mobile: “You get up, you brush your teeth, and you search on Google,” Nadella said.

Nadella didn’t argue against defaults altogether. After all, Microsoft uses a similar system of promoting its in-house software. But Nadella accused Google of deploying its defaults to unfairly impair other companies. He gave an example of Google removing its app store if phone makers don’t set Chrome as the default browser on their Android devices. “That is the type of stuff that is impossible to overcome,” Nadella said. “Google has carrots, and it has massive sticks.”

It’s worth remembering that Microsoft effectively leveraged its dominance in similar ways as Nadella accused Google of doing, said Tom Evslin, a former product director at Microsoft in the early 1990s. If Microsoft hadn’t lost its grip on the browser and mobile markets in the following decades, it might still be engaged in the same practices. “For Microsoft to complain just because it’s been losing for a while seems to be somewhat hypocritical,” Evslin said in an interview.

Schadenfreude is perhaps a more likely motivation for Nadella’s testimony. Prosecutors have said the case is just like Microsoft’s antitrust trial from the dot-com era, while Google’s Schmidtlein has argued the “facts could not be more opposite.” But certain similarities between the lawsuits are glaring. Internal Microsoft research from 1997 concluded that for Internet Explorer to beat Netscape, it needed to be bundled with Windows. Back then under Bill Gates, Microsoft had a colossal stick in Windows and was willing to use it on PC manufacturers and software developers to benefit Internet Explorer.

Microsoft had considered making AOL a default in Windows in exchange for AOL switching browsers to Internet Explorer, a bid to steal the 30% to 40% market share Netscape captured through the web portal. In a separate negotiation, Microsoft had told AT&T that it would consider adding a sign-up program for the telecom’s service only if AT&T gave Internet Explorer exclusive or highly preferential treatment — and a revenue-sharing deal.

Microsoft ended up losing its monopoly trial, but after an appeal the company settled in the early aughts with the Justice Department. The agreement required it in part to allow Windows to disable Internet Explorer.

Nadella used his testimony this month not just to stick it to Google but also to shine an unflattering light on Apple, which has drawn US antitrust scrutiny over its iOS mobile operating system and app store. “Would Google even exist if Windows had iOS-like restrictions on how things get distributed?” Nadella said.

At another point, Nadella wondered why Google was spending billions of dollars for defaults if the company really believed its search engine would win without them: “The question then is: Why does Google have to pay Apple?”

Apple defended its practice of selling default placement to Google by arguing that it’s “pretty easy” to change, as Cue argued in his testimony, and actually makes Apple products better. Cue, Apple’s senior vice president of services, claimed in court that it was Google’s search quality — not the $4 billion to $7 billion it pays Apple each year — that secured its place on the iPhone.

Cue talked about the sanctity of design at Apple and said he was not aware of any instance when Google restricted Apple’s ability to craft its own UI. Several apparent examples to the contrary came to light in court though. In one, a Google executive testified that the company complained about a visual change Apple had made to its iPhone search box in 2013. “They shrunk the box where you type in the query, and they grayed it,” said Joan Braddi, Google’s vice president of product partnerships. “We saw a dramatic drop in usage, and we told them about their UI changes, and they asked us for some recommendations to fix it.” In another instance, Apple considered offering users alternative defaults for search engines in its now-defunct Windows version of Safari if they downloaded it from a third-party service like Yahoo or AOL. However, Apple abandoned the idea after Google protested, according to Cue.

Apple’s design philosophy is to some extent anti-choice. “The more choices or the more options that you get, it frustrates customers,” Cue said. “They’re afraid of making the wrong choice.” This is exhibited throughout Apple’s mobile software, where users aren’t even given the option to change their default voice assistant from Siri to Amazon.com Inc.’s Alexa or their navigation software to Google Maps.

Microsoft offers plenty of choice in Windows today but still elects to bundle software when it suits the company’s business interests. In response to overwhelming demand for its AI chatbot in February, Microsoft made an early preview of the product available only to those using its Edge browser and Bing.

As Google’s lawyers begin presenting their case this week, they’ll probably emphasize consumer choice in Google’s own software and how easy it is to switch search engines on other platforms. Pichai is expected to testify to that effect in the coming weeks. In an emailed statement, a Google spokesperson reiterated that it’s easy to change defaults on browsers and mobile devices. “On Windows computers — where Bing is the default and Microsoft makes it much more difficult to switch — the overwhelming majority of people still search with Google,” the spokesperson said. “And if people are having trouble changing their settings, they can always easily search how to do it with their preferred search engine.”

For a telling example of big tech’s design philosophy, consider printers. Apple, Google and Microsoft don’t make printers and have no profit interests in them. On the print screens in each company’s operating system, there’s no default manufacturer or secret revenue-sharing agreements for sales of ink cartridges. Rather, when you go to print something, there’s a list of options for HP or Epson or whatever product is plugged in. Pretty easy, right?

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First Published: Oct 26 2023 | 5:35 PM IST

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