Google’s CEO takes a new turn in the antitrust witnesses’ stance

Two weeks ago, Google had a big day in Washington. President Biden signed an executive order to create artificial intelligence safeguards that could impact Google’s most pressing projects, and Secretary of State Antony J. Blinken presented the company with an award for its work in helping Ukrainian refugees and promoting women’s economic security.

Sundar Pichai, Google’s CEO, had spent much of the day on a witness stand in a federal courthouse about two miles from the White House, defending his company against claims that it would rival rivals in the search and online advertising markets. crush.

On Tuesday, Mr. Pichai is expected to testify again, this time in San Francisco, to confront video game company Epic Games’ claims that his company has broken the law and has monopolistic power over app developers in Android’s Google Play Store.

Mr. Pichai has become the face of Google’s antitrust court battles on both sides of the country in the past month. And his visits to the witness stand underscore the growing importance for Big Tech leaders to be sharp witnesses for their companies, whether in an antitrust trial or during hearings on Capitol Hill.

Testifying under oath is a task that many tech executives will have to undertake in the coming years, with Amazon, Meta and others facing their own battles in antitrust court. It is not a task at which many executives excel.

Although he was never called to the witness stand to testify, Bill Gates, who was CEO of Microsoft in the last major technology antitrust case brought by the Justice Department more than two decades ago, came across as combative and evasive in statements.

In recent years, executives including OpenAI’s Mark Zuckerberg and Sam Altman (and of course Mr. Pichai) have been asked to testify before Congress for various reasons, with varying degrees of success. Mr. Zuckerberg has sometimes irritated lawmakers with vague answers, while Mr. Altman appeared to charm senators during a hearing this year.

The most important job on the witness stand for Mr. Pichai — a calm and detail-oriented executive — was keeping the temperature low during interrogations and sticking to the central point of Google’s antitrust defense: that it is an innovative company that retained its leadership through innovation and hard work instead of illegal monopolistic behavior.

The Justice Department filed a landmark antitrust lawsuit against Google in October 2020, arguing that the company’s standard search agreements with phone makers and browser companies helped it illegally maintain a monopoly.

Google called Mr. Pichai, 51, to the booth two weeks ago. Instead of sitting on the witness stand, Mr. Pichai stood at a lectern for nearly four hours, microphone in hand, as if delivering a speech at a business conference. His handlers told him to stand because of a lower back sprain.

He talked about his background, getting a phone as a teenager in Chennai, India, and understanding the power of technology, before deftly answering questions about his company’s competitive position, its relationship with Apple and the standard search contracts the government says were illegal. .

Mr. Pichai sought to refute government attorney arguments that Google would pay Apple billions of dollars a year to keep Apple out of the search market. He presented a different story, saying his company wanted to be the default search engine for the iPhone because of the “value” of that spot and the need to ensure Apple would ensure the user experience.

“I felt like the deal had gone well since 2016,” Mr. Pichai said. “It continued to increase search usage and search revenue.”

During cross-examination, Mr. Pichai repeated the rationale for the deal so many times that he seemed to lose patience for a moment with the line of questioning, saying, “I just gave all the reasons” for the deal.

Adam Kovacevich, a technology industry lobbyist at the Chamber of Progress who worked at Google for 12 years, said Mr. Pichai’s testimony gave the court a good picture of how the company made strategic decisions.

“He did a great job,” Mr. Kovacevich said of Mr. Pichai’s performance. “The most important thing for me is that when you’re in that position, your first goal is not to be Bill Gates in the Microsoft process. Your main goal is to appear responsive and reasonable.”

Excerpts from Mr. Gates’ combative videotaped testimony were shown in court more than two decades ago. The Microsoft co-founder undermined his and his company’s credibility with the judge in the case, according to antitrust lawyers.

In San Francisco, Mr. Pichai is expected to discuss the fierce competition between the operating systems of Apple’s iPhone and Google’s Android, seeking to undermine Epic’s argument that Google’s app store practices are monopolistic. The CEO was deeply involved in the launch of Android and is expected to share his view that the Play Store has helped many developers expand their businesses and enabled consumers to download apps safely.

There will be one big difference: the antitrust trial in Washington has no jury. The decision will be made by a judge. In San Francisco, Mr. Pichai will have to appeal to a jury that could be receptive to the idea of ​​a giant tech company exploiting many smaller businesses. Epic CEO Tim Sweeney is also expected to testify in the trial.

Google and Epic declined to comment.

Epic, the maker of the hit game Fortnite, filed the claim against Google in 2020, in an attempt to avoid the 15 to 30 percent fees for subscriptions and in-app purchases it has to pay to Google.

The game developer antagonized Google and Apple by telling users they had to pay directly through Epic for in-app transactions. In response, Google and Apple suspended Fortnite from their app stores. Epic claims that Google also bullied other companies into forcing them to drop deals with Epic before banning it from app stores.

Google is facing a new antitrust lawsuit from the Justice Department, accusing it of illegally abusing its monopoly power over the technology that serves online ads.

A trial in that case could begin as early as next year, but it is too early to know whether Mr. Pichai will be called to testify.

Mr. Pichai has tried to avoid distracting Google employees from the lawsuit. He has encouraged them to “keep doing what you’re doing” and assigned a relatively small number of employees to work on the Justice Department’s case — hundreds of more than 180,000.

But Mr. Pichai’s appearances have taken time away from his other obligations as a business leader, including his plan to reclaim Google’s primacy in the fast-growing field of generative AI.

In the midst of Mr. Pichai’s testimony in October, Secretary of State Mr. Blinken honored Google’s subsidiary in Poland for its work promoting women’s economic security and helping Ukrainian refugees. Hours later, Mr. Biden hosted a signing ceremony at the White House, but Mr. Pichai’s handlers could not answer yes because there was a chance he was still in the courtroom when the case began.

“It’s not the best use of his time,” Richard Kramer, an analyst at Arete Research, a London-based investment research firm, said in an interview. “No CEO wants to spend their time questioning government lawyers.”