The Justice Department on Tuesday inaugurated the largest US antitrust trial in a quarter century, accusing Google of exploiting its dominance in the Internet search market to drive out competitors and stifle innovation.
Justice Department lead litigator Kenneth Dintzer said, “This case is about the future of the Internet and whether Google’s search engine will ever face meaningful competition.”
Over the next 10 weeks, federal lawyers and state attorneys general will try to prove that Google rigged the market in its favor by locking its search engine as the default choice in many locations and devices. U.S. District Judge Amit Mehta likely won’t issue a decision until early next year. If he decides Google broke the law, another trial will decide what steps should be taken to rein in the Mountain View, California-based company.
Google and its corporate parent Alphabet Inc. Top executives of Apple Inc. as well as executives from other powerful technology companies are expected to testify. These are also likely to include Alphabet CEO Sundar Pichai, who succeeded Google co-founder Larry Page four years ago. Court documents also suggest that Eddie Cue, a high-ranking Apple executive, may be called to the stand.
The Justice Department filed its antitrust lawsuit against Google nearly three years ago during the Trump administration, alleging that the company has used its Internet search dominance to gain an unfair advantage against competitors. Government lawyers allege that Google protects its franchise through payola by spending billions of dollars annually to become the default search engine on iPhones and web browsers like Apple’s Safari and Mozilla’s Firefox.
Regulators also allege that Google illegally rigged the market in its favor by requiring device makers to bundle their search engine with their Android software if they wanted full access to the Android App Store.
“Google’s contracts ensure that rivals can’t match search quality ad monetization, especially on phones,” Dintzer said. “Through this feedback loop, this wheel has been turning for more than 12 years. It always turns to Google’s advantage.”
Google argues that despite capturing approximately 90% of the Internet search market, it faces extensive competition. Google argues that its competitors range from search engines like Microsoft’s Bing to websites like Amazon and Yelp, where consumers can post questions about what to buy or where to go.
From Google’s perspective, continued improvements to its search engine explain why people almost obviously come back to it, a habit that long ago made “Googleing” synonymous with looking things up on the Internet.
The trial comes just weeks after the 25th anniversary of the first investment in the company — a $100,000 check written by Sun Microsystems co-founder Andy Bechtolsheim that enabled Page and Sergey Brin to set up shop in a Silicon Valley garage.
Today, Google’s corporate parent, Alphabet, is worth $1.7 trillion and employs 182,000 people, with most of the money coming from $224 billion in annual advertising sales through a network of digital services powered by a search engine. Flows through the medium, which asks billions of questions a day.
The Justice Department’s antitrust case is reminiscent of the case filed against Microsoft in 1998. Regulators then accused Microsoft of forcing computer makers that relied on its flagship Windows operating system to also feature Microsoft’s Internet Explorer – just as the Internet was starting to go mainstream. That bundling practice crushed competition from Netscape, a once-popular browser.
Several members of the Justice Department’s team in the Google case – including Justice Department lead plaintiff Kenneth Dintzer – also worked on the Microsoft investigation.
Google could stumble if the trial ends with concessions that diminish its power. One possibility is that the company could be forced to stop paying Apple and other companies to make Google the default search engine on smartphones and computers.
Or Google may lose its focus due to legal battles. This is what happened to Microsoft after its antitrust confrontation with the Justice Department. Disoriented, the software giant struggled to adapt to the impact of Internet search and smartphones. Google took advantage of that distraction to leapfrog from its startup roots into an impressive powerhouse.