Google CEO Pichai Testifies $26 Billion Payments Intended for Device Upgrades

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Testifying in the significant antitrust case against Google, CEO Sundar Pichai stood by the company’s practice of compensating tech firms, including Apple, to set Google as the default search engine on their devices. Pichai emphasized that the aim was to enhance user experience and make it more convenient.

The Department of Justice, however, alleges that Google’s substantial payments to tech companies aim to stifle competition and innovation by blocking out rival search engines. According to court documents submitted by the government, these payments totaled over $26 billion in 2021.

Google’s defense rests on the claim that its dominance in the market is primarily due to the superior quality of its search engine compared to its competitors.

During the trial, Pichai emphasized that Google’s payments to phone manufacturers and wireless companies were intended not only to secure its position as the default search engine but also to encourage these companies to invest in costly security upgrades and other device enhancements.

Google’s revenue is generated through user clicks on advertisements displayed in its search results, and the company shares this revenue with Apple and other firms that opt for Google as their default search engine.

The ongoing antitrust case, the most significant since the legal action against Microsoft’s internet browser dominance 25 years ago, was filed in 2020 during the Trump administration. The trial, which commenced on September 12, is being held in the U.S. District Court in Washington, D.C.

U.S. District Judge Amit Mehta is not expected to deliver a ruling until early next year. If the court finds Google guilty of antitrust violations, a subsequent trial will determine the necessary measures to curb its market power. Possible actions could include prohibiting Google from paying companies like Apple to set Google as the default search engine.