Hi, itâs Todd in Washington. The US government is building a case that Google has a monopoly on search. But first...Three things you need to [View in browser](
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Hi, itâs Todd in Washington. The US government is building a case that Google has a monopoly on search. But first... Three things you need to know today: - [Amazon launched]( its internet satellites
- [Snapchat is on notice](Â in the UK over its AI chatbot
- [Investors have lost faith]( in EV maker Lucid A search for whatâs next Googleâs antitrust trial is heading into a fifth week in Washington, reaching what could be its halfway point. In the biggest antitrust case in decades, the US Justice Department has painted Google as a deep-pocketed villain outspending every rival to buy prominence for its search engine on mobile phones. Google argues it simply has a better product, thanks to smart scientists and continued investment. The fight on its surface is about what Google has done recently in online search. But itâs also about the future and whether the companyâs heft will allow it to dominate the new thing, artificial intelligence. The most noteworthy testimony so far came from Microsoft Corp. Chief Executive Officer Satya Nadella. Called to the witness stand Oct. 2, he told a tale of futility with Bing. After $100 billion in investment, no amount of negotiation would get Apple Inc. to make Bing the default search engine on the iPhone, Nadella said, noting that hardly anyone changes the defaults. âIt would be a big game-changer.â Microsoft is [intimately familiar]( with the implications of antitrust, but its own experience also shows how fast fortunes can change in technology. A key question is whether Googleâs current advantage will give it a leg up in the AI market, which could be as big a moneymaker as search â if not bigger. The two areas have some overlap. Many AI systems are trained on vast amounts of information scrounged from the web. From that dog pile they mimic human language to mold a plausible answer to a question and engage in conversation. A good search engine can offer some of the building blocks for a good AI product. Nadella said he worries about a rival locking up information for its AI. Instead of paying to be a phoneâs default, Google could, say, pay Wikipedia for exclusive access to its content. âWeâre beginning to see some dynamics which are troubling,â Nadella said. But itâs tough to make an antitrust case based on what-ifs. Other testimony focused on how the default setting guides peopleâs choices today and how it handicaps rivals. Sridhar Ramaswamy, a former head of Googleâs ad business, co-founded a competing search startup called Neeva Inc. He said he thought a subscription search engine might fly, but that an economic slowdown and Googleâs paid-for placement on smartphones spelled doom for the company. Google lawyers have tried to punch holes in the default-is-king argument. Under questioning, Nadella conceded that even after Bing won default status on mobile devices from Verizon Communications Inc. and other companies, most users still went to Google. The point is crucial because the Justice Department has accused Google of unlawfully maintaining a monopoly by paying $10 billion a year to phone makers and wireless carriers to maintain its default position. Even before the trial, Google claimed itâs the choice for most users of Windows computers, where Bing comes installed as the first option, said David Olson, an associate professor who teaches antitrust at Boston College Law School. âThat goes to the argument that defaults donât really matter,â Olson said. âPeople are picking the superior product.â Whether or not itâs true, Google can be expected to make that point and others in the coming weeks as it gets to put its witnesses on the stand. Expect declarations that search and online advertising remain competitive. Already, Google executives have told the court that Amazon and TikTok are attracting growing ad share. The stakes in this case are high. A loss could result in a breakup of Google.â[Todd Shields](mailto:tshields3@bloomberg.net) The big story Meta Platforms Inc. and other corporate giants are [loading up on debt](, despite an 18-month push by Fed Chair Jerome Powell aimed at breaking Americansâ borrow-and-spend habits. One to watch MGM says the recent computer hack that shut down many services at its casino hotels will reduce third-quarter profit by about $100 million. Rapid7 Chief Security Officer Jaya Baloo [joins Caroline Hyde on Bloomberg Technology]( to discuss the state of the cybersecurity industry and what companies should do to better protect themselves. Get fully charged Virgin Galactic sent a third crew of tourists to the [edge of space](. The White House is asking the FCC to adopt strong rules to end [the digital divide](, setting up a potential fight with broadband providers. Chinaâs grip on the metal germanium â key to electronics and solar cells â could be [challenged]( by a new plant in the Democratic Republic of the Congo. More from Bloomberg Live event: The Bloomberg Technology Summit in London will host top technology leaders, business executives, innovators and entrepreneurs on Oct. 24. The event will explore the rapid advance of AI, green technology, the escalation of cyber warfare and more. [Register here](. Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage
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