Apple Inc (NASDAQ:AAPL) considered acquiring the Bing search engine from Microsoft Corporation (NASDAQ:MSFT) or launching a joint venture with the company in 2018, according to a transcript of testimony unsealed from the Department of Justice’s antitrust trial against Google.
The testimony, taken last week from Apple’s head of machine learning and former Google senior vice president of engineering John Giannandrea, reveals that Apple was considering using Bing instead of Google as the search engine for iPhones and Macs.
Giannandrea described an internal presentation made by Apple’s head of business development that outlined four versions of a deal or lack thereof with Microsoft: buy Bing outright, co-own Bing, launch a joint venture to build a technology known as Knowledge Graph, or grow Siri as its own entity.
Giannandrea said he believed Apple CEO Tim Cook met with Microsoft CEO Satya Nadella in the summer of 2018, which kicked off a series of internal talks, before ultimately telling Microsoft there would be no deal.
“Obviously, if we entered into a joint venture with Bing, it would have implications for the Google relationship,” Giannandrea said in his testimony last week.
Fast forward, and Google currently pays Apple as much as $19 billion annually to be its default search engine.
Deals like the one Google has with Apple and others are part of the DOJ’s case against the company. The government is trying to prove that Google has used its licensing deals to monopolize the market.
Google denies it has violated antitrust law. Part of its defense is an argument that consumers switch to Google even when it isn’t the default.
Giannandrea lent some credence to that, if indirectly, by saying several times in his testimony that he was skeptical of whether Bing would be an improvement over Google. He also sent an email to Cook in December 2018 arguing that Google delivered better mobile search results.
“I said, ‘Is it possible that we could build a parity product?’ Yes, it’s theoretically possible, but I didn’t see a path to a better search engine for Apple’s users at that time,” Giannandrea said.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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