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Google’s contract with Lenovo Group Ltd’s Motorola blocked the smartphone maker from setting Perplexity AI as the default assistant on its new devices, an executive of the startup testified at the search giant’s antitrust trial.
Perplexity’s chief business officer Dmitry Shevelenko said on April 23 that the company’s efforts to obtain preferential distribution on smartphones from manufacturers and wireless carriers was because of Google contracts, which he said are like a “gun to your head” for a company. His testimony came in the Justice Department’s case against Alphabet Inc’s Google to determine remedies after it was found to have an illegal monopoly in search.
Perplexity’s AI app won’t be the default AI assistant “despite both parties wanting it to be”, Shevelenko told Judge Amit Mehta, who is overseeing the case. Motorola “can’t get out of their Google obligations and so they are unable to change the default assistant on the device”.
Instead, Perplexity’s app will come preloaded on new devices, but not appear on the home screen that a user first sees when logging in, he said.
Perplexity has one signed agreement to have its AI assistant be pre-installed on a company’s devices and is currently negotiating another, Shevelenko said, without naming the companies at issue. A Google executive testified earlier in the week that Motorola will add Perplexity to its phones later this year. Bloomberg also previously reported that the AI startup is in talks with Samsung Electronics Co.
Last year, Mehta found that Google illegally monopolised the search market through payments to smartphone makers, wireless carriers and browsers to ensure its search engine is the default on their products. The US Justice Department has asked Mehta to ban Google from paying for search engine defaults and he is holding a three-week hearing to determine how to resolve the company’s illegal acts.
That proposed ban would also apply to Google’s AI products, including Gemini, which the agency says were aided by the company’s illegal monopoly in search.
Shevelenko said he spends 75% of his time working to reach partnerships with carriers and phonemakers to distribute the company’s app because it’s like a “jungle gym” to try and change the default on an Android phone from Google’s Gemini to Perplexity. He estimated it took him 10 to 15 minutes to do it himself and he required assistance from one of the company’s IT people.
Phonemakers “and carriers should be liberated from these restrictions and the threat of revenue loss”, Shevelenko said. Google’s contracts are like a “gun to your head and if you do anything they don’t like, they can cut off a material source of revenue”.
Shevelenko said that none of its partnerships would have materialised if not for the Justice Department’s antitrust suit against Google.
It’s because Google is “under pressure” that phonemakers “carriers and browsers are OK having some of the dialogues they are having”, he said. – Bloomberg
