Feds target Google ‘power of defaults’ in second day of antitrust trial

WASHINGTON (CN) — Federal prosecutors on Wednesday took aim at Google’s exclusive agreements with mobile phone and internet browser companies during the second day of the landmark antitrust case. 

Google’s contracts make their search engine the default option on iPhones, Android devices and browsers like Firefox and Opera in exchange for a portion of the advertising revenue. In the eyes of the government, those agreements have helped Google create a monopoly over internet searches and led to “monopolistic behavior” by the company to maintain their dominance. 

During opening arguments before U.S. District Judge Amit Mehta on Tuesday, Google attorney John Schmidtlein defended those agreements, saying that while they make Google the first search engine most consumers will encounter when first using their devices or opening a browser, it does not preclude them from changing to another engine like Bing, DuckDuckGo or Ecosia. 

He specifically laid out the quick process required to change the default engine on iPhone, which only takes four steps: open Safari, select the search tab, click the search engine menu and select your new default.

Prosecutors called witnesses who could speak directly to the “power of defaults” and push back on Schmidtlein’s assertion that Google’s default status has little effect on its users. 

Antonio Rangel, a professor of neuroscience and behavioral economics at Caltech, explained that humans are creatures of habit and that even a single step is enough of a barrier to prevent people from changing something.

Rangel pointed to a decision by Apple in 2012 to make Apple Maps the default navigation app on its devices — meaning it was preloaded out of the box and addresses online linked directly to the app — and how despite being an inferior product, Apple Maps became the dominant navigation app.

The Apple Maps incident was in the back of Google’s mind a few years later, when Apple considered whether to allow its users to choose their default engine in Safari, a “code red” situation for Google. Rangel testified that internal Google documents showed the company estimated a massive shortfall based on its experience with Apple Maps.

Justice Department attorney Kenneth Dintzer said in his opening arguments Tuesday that Google prevented the catastrophe by strongarming Apple and threatening to end its revenue sharing agreement with the company.

Google was fully aware of the potential benefits it could gain from better understanding their users’ behavior, Rangel said, pointing to the company’s hiring of Maya Shankar — a cognitive scientist who founded the White House Social and Behavioral Sciences Team — to lead its Behavioral Economic team. 

The government also called Chris Barton, a former member of Google’s strategic partnerships for mobile devices from 2004 to 2010 — and founder of the music identification app Shazam — who testified Google viewed exclusivity with mobile developers a big priority.

He spoke specifically about his experience gaining such a deal with Telefonica, a Spanish telecommunications company and one of the largest mobile network providers in the world.

“Without exclusivity, you can sign a deal and the next day it might just be an option for Telefonica to use Google search, then the next day Microsoft or Yahoo can come in and make an exclusivity deal,” Barton said on Wednesday. 

Prosecutors called Hal Varian, chief economist for Google, back to the stand after his cagey testimony on Tuesday, but got very little out of him again Wednesday. 

However, one exchange added further light for what may become a bigger issue as more and more Google employees are called to the stand. Dintzer asked Varian whether he had received any “antitrust training” instructing him to be use specific language in internal communications so as not to draw the ire of regulators.

Varian repeatedly tried to take Dintzer’s phrasing literally, saying he had not received any formal training, such as classes, during his time with the company. But when Dintzer pushed back and asked if he had any sort of conversation on the topic, Varian could only say he could not recall, an answer he provided consistently during the government’s questioning. 

Meanwhile, just across the street from Wednesday’s proceedings at the federal courthouse in Washington, Google CEO Sundar Pichai attended a closed Senate session on artificial intelligence. He attended along with other Big Tech leaders like Elon Musk and Mark Zuckerberg. 

Thursday's hearing will consist mainly of closed-door testimony from Google and Verizon employees.

Follow @Ryan_Knappy

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