US prosecutors claimed Google paid more than $10bn per year for agreements to ensure that it was the default search engine for mobile phones and computers. The most significant antitrust trial in 25-years began in Washington.
Kenneth Dintzer, during the Department of Justice opening statements of a case accusing Google of monopolizing internet search through anti-competitive agreement, said: “This case concerns the future of internet and whether Google’s search engine will face meaningful competition.”
Dintzer stated that the tech group began “illegally maintaining” its monopoly in 2010. He added that it currently represents about 89 percent of the market for internet search.
During Google’s opening statement, John Schmidtlein a partner of Williams & Connolly argued that the “competitive forces” facing the company in search have “never been more diverse or significant”.
“Plaintiffs claims seek to distort the search competition. . . He said that the hope was to force people to use inferior goods in the short term, in order to benefit competition on the long-term. “Antitrust laws in the US do not allow such radical market interventions, and this is for good economic principles.”
This is the highest-profile monopoly case since the DoJ accused Microsoft of trying to squash Netscape, the pioneering web browser in the 1990s with Windows dominance. It’s also a test for the more aggressive antitrust stance taken by enforcement agencies in recent years.
Jonathan Kanter, head of DoJ’s Antitrust Unit and a new generation of progressive officials nominated by President Joe Biden have pledged to rein in big tech. They claim that insufficient legal challenges have allowed anticompetitive behavior to spread across the US economy in recent years.
Kanter was an observer in Washington’s courtroom Tuesday. He inherited the Google lawsuit from the Donald Trump Administration, which filed it for the first time in 2020.
According to the DoJ complaint, Google paid wireless carriers and browser developers billions of dollars in deals that ensured its search engine was prominently displayed on mobile phones and computer.
Google claims that it has a great product, which the public uses. Google has said that the agreements are mostly set by Apple and Samsung, but other players may also bid.
Schmidtlein was asked by Judge Amit Mehta on Tuesday, who is hearing this case, to respond to DoJ’s arguments that Google’s size and default agreements have stifled competition, leaving it as the only viable alternative.
Schmidtlein responded: “This Court cannot intervene in market and say, ‘Google. . . You have the best products, best quality. . . But I’m sorry that you can’t be the default. This is a violation of US antitrust laws.”
Dintzer, of the DoJ, outlined the details of Google’s agreement with Apple in his opening statement. This made Google’s search engine Apple’s default browser. According to the government, Google refused to make any changes to the agreement after Apple proposed amendments and threatened to cancel the ad revenue sharing provision.
Dintzer stated, “This is the monopolist exercising his muscles.”
Apple didn’t immediately respond to our request for comment.
Sean Sullivan, professor of law at the University of Iowa College of Law, said that it is not sufficient for the DoJ’s case to be won at trial if they can only show how large Google is or that competitors are struggling to compete with them. The government must prove that Google’s monopoly was maintained by anti-competitive behavior.
The government claimed that Google had a monopoly on ads and accused it of “manipulating auctions” for search ads to raise prices. Federal prosecutors claimed that the tech giant had also destroyed and hidden evidence for years. The DoJ cited an email from Google CEO Sundar Pichai, asking his colleagues to turn off the history of a particular group. He later deleted this message.
They turned off history. . . So they could rewrite in this courtroom”, Dintzer said. The company said that it had provided more than five million documents in this case. It did not respond to a request for comment.
DoJ says that the majority of the witnesses who will testify in the bench trial which is expected last for about 10 weeks are Google employees or former Google workers, as well as people affected by the conduct of the tech company. Google has said that its witnesses include both its own staff and senior executives of counterparties to the agreements it signed, such as Samsung Motorola, T-Mobile, and Motorola.
Apple failed to prevent the summons of three of its top executives, including Eddy Cue (head of services), to testify.
The DoJ filed in January a separate lawsuit for dominance of the digital advertising industry. This is one of many cases that the antitrust enforcers within the Biden administration brought to combat Big Tech.