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Comment by elicash | Hacker News Reader

This case makes zero sense to me. If just paying Apple for default automatically makes you the highest quality search engine and number one in the market, why didn't somebody else just do that?

There's a second more interesting argument that Microsoft made that even if they paid more, it wouldn't matter to Apple because they rely so much on Google cooperation for Gmail, etc and that makes at least a bit of sense for a competition issue even though it'd apply to Microsoft products (Office, etc) as well. But to the degree anybody can pay to be #1, that strikes me as an open marketplace.

And why is Google paying Apple to be default worse than Google selecting itself as default on its own devices? Isn't it the same principle?

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There's a more insidious implication at play, that the payment constitutes an armistice between Google and Apple so that neither will directly compete with each other further than they already are (avoiding a lose-lose situation where Google is making desktop computers and Apple is developing search engines).

And I think additionally G7 governments see the tech industry as being dangerously too powerful and are picking at scabs in hopes that this industry falls into line before they take more drastic measures, which would be a lose-lose scenario for both the tech industry and governments.

This is a better argument, as opposed to the "power of defaults" stuff that has dominated this case. There's a contradiction, though:

Is google OVERPAYING so that apple won't start their own search engine?

Or is google UNDERPAYING because the power of defaults is so incredibly high?

Also, Apple denies there's any agreement that they can't do search. If Apple isn't telling the truth, I haven't seen any evidence of it.

Attorney: “Sir, are you aware of Google restricting Apple’s ability to design its software products?”

Eddie Cue: “I am not.”

> why didn't somebody else just do that

Yeah, who doesn't have a half-decent web search engine a couple of hundred billion dollars lying around.

Microsoft, whose testimony has gotten the most attention in this case, has $111.26 B on hand. Google pays Apple between $18 billion to $20 billion a year, supposedly, and of course makes money back in search revenue. And even more by being number one in search.

If you thought I was suggesting a random person on the street would have the money, then you misunderstood.

The actual answer to the question I posed, which you quoted, is that it's actually quite difficult and not a matter of just writing a check.

The implication is that in capitalist society without enough regulation, the monopolies will collaborate to maintain their own monopolies rather than fight each other and try to compete. Microsoft, Apple, Google, Amazon all could compete, but it's more profitable to have a gentlemen's agreement to not compete and to kill any challengers.

Same as Standard Oil, J.P. Morgan, US Steel, Armour Meats, etc. last century.

I don't have an issue with a law that says companies that create phones have to show X number of search options for the user to select on first startup. But the central argument in this legal case, that just paying to be the default means you then automatically become highest quality and therefore dominate the entire market even on other devices, doesn't strike me as being... true.

"Regulation can be good" is a principle I agree with. That is separate from whether the central argument being made about whether being the default is all it takes to create the highest quality search engine.

That's one of the cruxes of the lawsuit: whether that kind of thing is true, and if it is, whether it constitutes antitrust to take advantage of it. If search engines overlap 99.9% in quality, default might win purely because users are lazy and uninterested in understanding the application domain.

Personal opinion: it sticks in my craw a little if it turns out you can be a monopolist by just working to be the default search engine because users are too lazy to try switching. That's a weird way to interpret the "consumer harm" cornerstone of American antitrust.

> If search engines overlap 99.9% in quality, default might win purely because users are lazy and uninterested in understanding the application domain.

What Microsoft is saying in this case is that their search engine sucks by comparison to google and lacks quality because they don't have the same number of queries since they aren't the default. That whoever has the most queries will automatically be the highest quality and win across all platforms, not just Apple where it's the default. Your argument is very different! You're essentially arguing that Microsoft is wrong about not being nearly as good as Google. See https://www.theverge.com/2023/10/2/23900233/microsoft-ceo-sa...

Ah, okay! That is actually very clever and I tip my hat to their lawyers for coming up with that approach.

Granted, one could I suppose have some concerns with an argument that says " We can't be as good because we don't have the ability to harvest nearly as much private data that users don't just hand you unless you intermediate yourself in their lives..."

... But there's meat on the bones of that being a roundabout way to argue consumer harm.

History around this is actually part of the case, with some more details in articles like this https://www.pymnts.com/big-tech/2023/microsoft-eyed-apple-de...

Also worth mentioning Firefox didn't always choose Google's bid historically.

The article reads to me like Microsoft either didn't think it was worth the high price, or that they couldn't sell the price tag to shareholders. And that contrary to just being an Apple thing, they also didn't want to pay Samsung, undercutting the idea that this is just a matter of Apple and Google being too cozy.

I get the impression Microsoft doesn't believe its own argument that all you need to do is write a check.

Or that they also knew Google, who already has the lead in search revenue, also has 100 billion in cash on hand so trying to buy the market out wouldn't actually work, even with 100 billion yourself.

That’s because it doesn’t make sense, at least if we’re talking about quality. If Google and nobody else had paid Apple a penny to be the default, Apple would still probably have Google as the default because it is still the best of the free options today. Of course the iPhone is so popular that it doesn’t make any sense for somebody to not pay Apple to be the default, and that is a lot of potential traffic that Google would lose out on if they took no action and remained complacent.

And if quality matters to the discussion (which might be a bigger “if” than I’m giving credit for here) Google today is worse than Google in 2009. Bing’s problem isn’t that it isn’t as good as Google today, it’s that they never even matched Google in 2009 and the decay in quality at Google hasn’t made it worse than Bing currently is.

When I took a negotiations course, there was one interesting thing they teach.

It is legal to pay someone to enter the market (e.g. Microsoft paying Apple to make a search engine if they thought most of their users would be former Google users).

It is, however, illegal to pay someone to stay out of the market. Given that Apple was developing a search engine, the DOJ is arguing that Google decided to offer Apple a lot more money than Apple felt they would make with their own search engine. So Apple preferred the Google money to developing their own engine.

While not an explicit deal to stay out of the market, the argument is that it is equivalent to paying Apple to stay out of the market.

Here's a negotiations question: Is Google overpaying or underpaying for "default"?

If you believe the price tag is so high because Google is secretly paying Apple to stay out of the market, then they'd be overpaying what would otherwise be a fair market price.

But the key argument in this case has been that the value of being "default" is so high that companies like Microsoft can't compete, since those extra queries make google way better. In that sense, Google would be UNDERPAYING.

To make your overpaying argument, Microsoft should have been arguing that being default is worthless and that Google was clearly paying Apple for some "other" nefarious reasons, like not developing their own search engine. I actually think that's a much stronger argument because I think there's evidence of it. But it's not the main argument being made in this weird case about how important it is to be default.

They could have just looked at the evidence of a deal between Google and Apple for Apple to not compete and left it at that. They've made this too complicated. The involvement of these other search companies is irrelevant.

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