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Google has exploited its dominance of the internet search market to lock out competitors and smother innovation, the Department of Justice said at the opening of the biggest US antitrust trial in a quarter of a century.<\/p>\n
\u201cThis case is about the future of the internet and whether Google\u2019s search engine will ever face meaningful competition,\u201d said Kenneth Dintzer, the Justice Department\u2019s lead litigator.<\/p>\n
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Google argues that dissatisfied users could switch search engines with \u201ca few easy clicks.\u201d<\/span>Credit: <\/span>AP<\/cite><\/p>\n Over the next 10 weeks, federal lawyers and state attorneys general will try to prove Google rigged the market in its favour by locking in its search engine as the default choice in a plethora of places and devices. US District Judge Amit Mehta likely won\u2019t issue a ruling until early next year. If he decides Google broke the law, another trial will decide what steps should be taken to rein in the company.<\/p>\n Top executives at Google and its corporate parent Alphabet, as well as those from other powerful technology companies are expected to testify. Among them is likely to be Alphabet CEO Sundar Pichai, who succeeded Google co-founder Larry Page four years ago. Court documents also suggest that Eddy Cue, a high-ranking Apple executive, might be called to the stand.<\/p>\n 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 say Google protects its franchise through a form of payola, shelling out billions of dollars annually to be the default search engine on the iPhone and on web browsers such as Apple\u2019s Safari and Mozilla\u2019s Firefox.<\/p>\n \u201cGoogle pays more than $US10 billion ($15.6 billion) per year for these privileged positions,\u201d Dintzer said.<\/p>\n \u201cGoogle\u2019s contracts ensure that rivals cannot match the search quality ad monetisation, especially on phones,\u201d he said. \u201cThrough this feedback loop, this wheel has been turning for more than 12 years. It always turns to Google\u2019s advantage.\u201d<\/p>\n Google counters that it faces a wide range of competition despite commanding about 90 per cent of the internet search market. Its rivals, the company argues, range from search engines such as Microsoft\u2019s Bing to websites like Amazon and Yelp, where consumers can post questions about what to buy or where to go. \u201cThere are lots of way users access the web other than default search engines, and people use them all the time,\u201d said attorney John Schmidtlein, a partner at the law firm Williams & Connolly which is representing Google.<\/p>\n But the more searches Google processes, the more data it collects, data that can be used to improve future searches and give it an even bigger advantage over its rivals, Dintzer said. \u201cUser data is the oxygen for a search engine,\u201d he said. Because of its market dominance, \u201cGoogle search and ad products are better than its rivals can hope to be.\u201d<\/p>\n That is why, he said, Google pays so much for its search engine to be the default option on products from Apple and other companies.<\/p>\n Alphabet CEO Sundar Pichai is expected to be one of many executives called to testify at the trial. <\/span>Credit: <\/span>AP<\/cite><\/p>\n Google \u201cbegan weaponizing defaults\u201d more than 15 years ago, Dintzer said, citing an internal Google document calling its arrangements an \u201cAchilles Heel\u201d for rival search engines offered by Yahoo and MSN.<\/p>\n He also alleged that Google strong-armed Apple into giving its search engine a default position on its devices as a condition for revenue sharing. \u201cThis is not a negotiation,\u201d Dintzer said. \u201cThis is Google saying: Take it or leave it.\u201d<\/p>\n Litigators argue the company\u2019s anticompetitive tactics prevented Apple from developing a search engine of its own.<\/p>\n And Dintzer said Google deleted documents to keep them out of court proceedings and sought to hide others under attorney-client privilege.<\/p>\n The trial begins just a couple of weeks after the 25th anniversary of the first investment in Google \u2014 a $US100,000 check written by Sun Microsystems co-founder Andy Bechtolsheim that enabled Page and Sergey Brin to set up shop in a Silicon Valley garage.<\/p>\n \u201cThey destroyed documents for years,\u201d Dintzer said. \u201cThey turned history off, your honour, so they could rewrite it in this court.\u201d<\/p>\n While questioning Google chief economist Hal Varian \u2013 the trial\u2019s first witness \u2013 Dintzer produced a July 2003 memo in which Varian urged Google employees to be cautious about how they discussed competition with Microsoft, lest they raise antitrust concerns. \u201cWe should be careful about what we say in both public and private,\u201d Varian wrote. References to \u201ccutting off their air supply\u201d and similar comments, for instance, \u201cshould be avoided.\u201d<\/p>\n From Google\u2019s perspective, perpetual improvements to its search engine explain why people almost reflexively keep coming back to it, a habit that long ago made \u201cGoogling\u201d synonymous with looking things up on the internet. Schmidtlein said Google\u2019s tweaks simply made its search better than key rival Bing. \u201cAt every critical juncture,\u201d he said, \u201cthey were beaten in the market.\u201d<\/p>\n The trial begins just a couple of weeks after the 25th anniversary of the first investment in Google \u2014 a $US100,000 check written by Sun Microsystems co-founder Andy Bechtolsheim that enabled Page and Sergey Brin to set up shop in a Silicon Valley garage.<\/p>\n Today, Google\u2019s corporate parent, Alphabet, is worth $US1.7 trillion and employs 182,000 people, with most of the money coming from $US224 billion in annual ad sales flowing through a network of digital services anchored by a search engine that fields billions of queries a day.<\/p>\n While questioning Google chief economist Hal Varian \u2013 the trial\u2019s first witness \u2013 Dintzer produced a July 2003 memo in which Varian urged Google employees to be cautious about how they discussed competition with Microsoft.<\/span>Credit: <\/span>Eamon Gallagher<\/cite><\/p>\n The Justice Department\u2019s antitrust case echoes the one it filed against Microsoft in 1998. Regulators then accused Microsoft of forcing computer makers that relied on its dominant Windows operating system to also feature Microsoft\u2019s Internet Explorer \u2014 just as the internet was starting to go mainstream. That bundling practice crushed competition from the once-popular browser Netscape.<\/p>\n Several members of the Justice Department\u2019s team in the Google case \u2014 including Dintzer \u2014 also worked on the Microsoft investigation.<\/p>\n Google could be hobbled if the trial ends in concessions that undercut 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.<\/p>\n Or the legal battle could cause Google to lose focus. That\u2019s what happened to Microsoft after its antitrust showdown with the Justice Department. Distracted, the software giant struggled to adapt to the impact of internet search and smartphones. Google capitalised on that distraction to leap from its startup roots into an imposing powerhouse.<\/p>\n<\/p>\n
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