WASHINGTON (CN) — Trial kicked off Tuesday in a landmark antitrust case against Google, in which the tech giant is accused of dominating internet searches by stamping out competition and shelling out billions of dollars to make itself the default search engine on devices.
Brought by the federal government, 35 states, the District of Columbia, Guam and Puerto Rico, the case centers on claims that the $1.7 trillion company established a monopoly with its search engine, commanding approximately 98% of all searches on mobile devices.
Google conducts more than 91% of all internet searches, well beyond its closest competitor, the Microsoft-owned Bing, which conducts just over 3% of searches.
In addition to solidifying itself as the default means for finding information on the internet — lending its name to the verb for online searches — the plaintiffs claim that, since it was founded in 1998, Google has also dominated search advertising, forcing marketers to use its products while increasing prices.
U.S. District Judge Amit Mehta will hear trial testimony of tech executives from Google and companies that have “default exclusivity” agreements, such as Apple, Android and Mozilla, over the next few months, and issue a ruling in the spring.
If the Barack Obama appointee rules against Google, he'll hold a second bench trial to determine the appropriate remedy. Mehta could order the company to halt certain business practices, sell off pieces of the company or merely require it to play nicer with its rivals.
The case likely won’t end there, given the high chance of appeals that could ultimately land the case at the U.S. Supreme Court.
Justice Department attorney Kenneth Dintzer opened the trial Tuesday, arguing that Google strongly defended its monopoly in online searches. After Apple tried to allow Safari users to choose their default search engine, for instance, Google lashed out: It threatened to cancel the two companies' revenue sharing agreement if Apple moved forward with the plan.
“This is not a negotiation, Your Honor. This is Google saying, ‘Take it or leave it,’” Dintzer said.
The attorney outlined claims under the Sherman Act, the first antitrust law enacted in 1890 following the emergence of monopolies like Standard Oil. The law gives the federal government power to punish companies for agreements that result in an “unreasonable restraint of trade.”
Dintzer argued that, in true monopolistic fashion, Google got complacent at the top, choosing to “walk when it could be running” in terms of investing in its search products. The results, Dintzer said, were lower quality searches and inferior protection of users’ privacy and data.
John Schmidtlein, Google’s lead defense attorney of the firm Williams & Connolly, decried the suit as “radical market intervention” and argued that Google has no monopoly — it merely created a superior product that consumers have overwhelmingly adopted as their favorite search engine.
“This court cannot intervene in the market and say, 'Google, you’re not allowed to compete,'” Schmidtlein said. “'You have the best product … but I’m sorry, you can’t compete to be the default.'”
He highlighted the fact that Google’s agreements with companies like Apple don’t prevent users from switching the default search engine in their Safari browser to other options, like Yahoo, Bing and DuckDuckGo.
Android devices are closely integrated with Google. They come with pre-installed applications like Gmail, YouTube, Google Chrome and the Google Play Store. Schmidtlein said that level of integration is pro-competition and allows Android to rival Apple and the iPhone.
Antitrust regulators in Europe disagreed in 2022, levying fine of 4 billion euros against the company for pushing Android phonemakers to carry its search and web browser apps in order to access the Google Play Store.
It was the largest antitrust fine ever handed down by the European Commission.
On Tuesday, Dintzer called Hal Varian, Google’s chief economist, to testify about internal discussions over the power of default status on devices. Varian was not particularly forthcoming, pushing back on nearly every question, saying he can’t remember much from documents Dintzer presented.
The line of questioning previewed another potential sticking point in the case: The Justice Department claims Google has tried to hamper the government's investigation at every turn, including destroying evidence and hiding internal communications by instructing employees to include attorneys in relevant emails so they can be protected by attorney-client privilege.
The Justice Department originally brought the suit under the Trump administration in October 2020.
In the initial complaint, Dintzer said Google, "a monopoly gatekeeper of the internet ... has used anticompetitive tactics to maintain and extend its monopolies in the markets for general search services, search advertising, and general search text advertising — the cornerstones of its empire."
He drew a direct line between Google's actions and the Sherman Act case USA v. Microsoft in which that tech giant was found to have violated antitrust laws by pushing computer manufacturers to make Internet Explorer the default browser, thereby blocking competing programs Netscape and Java.
“Anticompetitive agreements by a high-tech monopolist shutting off effective distribution channels for rivals, such as by requiring preset default status (as Google does) and making software undeletable (as Google also does), were exclusionary and unlawful,” Dintzer wrote in the complaint.
The Federal Trade Commission investigated Google in 2013 over allegations it had prioritized its own content in search engine results, known as “search bias,” but settled the case with the company before it could lead to litigation.
Tuesday’s proceedings come amid growing hostility toward tech companies among lawmakers and the public. A 2021 Gallup poll found 45% of U.S. adults had a very or somewhat negative view of companies like Amazon, Meta and Google, each the subject of federal antitrust investigations.
Google faces another trial, expected for 2024, over a Justice Department challenge to the company’s online advertising business.Follow @Ryan_Knappy
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