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NEWS / 2023 / 11 / 18 / DOJ CLAIMS GOOGLE'S SEARCH ENGINE DOMINANCE SPARKS MAJOR US ANTITRUST TRIAL

DOJ claims Google's search engine dominance sparks major US antitrust trial

17:40 18.11.2023

In a courtroom in Washington, D.C., the Department of Justice launched its antitrust trial against Google on Tuesday, alleging that the tech giant has abused its dominance in the internet search market to stifle competition and hinder innovation. Kenneth Dintzer, the lead litigator for the Justice Department, declared that the case was about the future of the internet and whether Google's search engine would ever face meaningful competition.

Over the course of the next 10 weeks, federal lawyers and state attorneys general will present evidence to prove that Google had rigged the market in its favor by ensuring its search engine was the default choice in various platforms and devices. The trial, presided over by District Judge Amit Mehta, is not expected to conclude until early next year. If the court finds Google guilty, a separate trial will determine the appropriate measures to rein in the Mountain View-based company.

Key executives from Google and Alphabet, its parent company, as well as other influential technology firms, are anticipated to testify during the trial. Among these witnesses may be Alphabet CEO Sundar Pichai, who assumed his position four years ago after Google co-founder Larry Page stepped down. Eddy Cue, a high-ranking executive from Apple, may also be called to the stand, according to court documents.

The Justice Department initially filed its antitrust lawsuit against Google nearly three years ago under the Trump administration, alleging that the company had used its dominance in internet search to gain an unfair advantage over competitors. Government lawyers argue that Google has engaged in a form of payola by funneling billions of dollars annually to secure its position as the default search engine on various devices, such as the iPhone and web browsers like Apple's Safari and Mozilla's Firefox.

Dintzer claimed that Google's contracts effectively prevented rivals from matching its search quality and ad monetization, especially on mobile phones. This feedback loop has allegedly been in operation for over 12 years, consistently benefiting Google. The Justice Department contends that Google has paid over $10 billion each year for these privileged positions.

In response, Google asserts that it faces significant competition despite its 90% share of the internet search market. The company argues that its rivals include search engines like Microsoft's Bing, as well as websites such as Amazon and Yelp where users can seek recommendations. Attorney John Schmidtlein, representing Google, emphasized that there are numerous ways users access the internet beyond default search engines, and they frequently make use of these alternatives.

The outcome of the trial holds immense significance for Google. The company's dominance in the search engine market has made Googling synonymous with internet searches, solidifying its position as the go-to search engine. If the trial results in concessions that weaken Google's power, it could have a crippling effect on the company. One potential consequence would be the cessation of payments to Apple and other firms for making Google the default search engine on their products.

However, the more searches Google conducts, the more data it accumulates, which can be used to enhance future searches, further entrenching its advantage over rivals, argued Dintzer. He stressed that user data is the lifeblood of a search engine and that Google's search and ad products are superior to anything its competitors can offer due to its market dominance. Consequently, Google is willing to pay substantial amounts to ensure its search engine remains the default option on devices from Apple and other companies.

Dintzer asserted that Google began weaponizing defaults over 15 years ago, quoting an internal Google document that referred to these arrangements as an Achilles Heel for rival search engines like Yahoo and MSN. He further alleged that Google had coerced Apple into granting its search engine a default position on its devices as a condition for revenue sharing. Dintzer characterized Google's behavior as take it or leave it, with no room for negotiation.

The litigators also argued that Google's anti-competitive tactics prevented Apple from developing its own search engine. Additionally, Dintzer accused Google of deliberately destroying documents and hiding others under attorney-client privilege to prevent their disclosure in court. He claimed that the company had been destroying documents for years, effectively erasing history to suit its purposes in the trial.

During the trial, the Justice Department presented a July 2003 memo authored by Google's chief economist, Hal Varian. Dintzer used the memo to highlight the need for caution in discussing competition with Microsoft, particularly to avoid raising antitrust concerns. Varian had cautioned Google employees to be mindful of their public and private statements and advised against using phrases like "cutting off their air supply."

Schmidtlein, Google's attorney, argued that the company's modifications to its search engine were simply aimed at making it better than its main rival, Bing. He contended that Google had consistently been beaten in the market at crucial junctures.

The trial commences just weeks after the 25th anniversary of Google's first investment - a $100,000 check from Sun Microsystems co-founder Andy Bechtolsheim, which allowed Page and Brin to establish their company in a garage in Silicon Valley. Today, Google's parent company, Alphabet, is valued at $1.7 trillion and employs 182,000 people. The majority of its revenue, approximately $224 billion annually, comes from advertising sales facilitated by its search engine, which fields billions of queries each day. The antitrust case brought by the Justice Department parallels the one it filed against Microsoft in 1998 when the tech giant was accused of compelling computer manufacturers to feature its Internet Explorer alongside its dominant Windows operating system.

/ Saturday, 18 November 2023 /

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