For three years, across two presidential administrations, the Justice Department has been crafting the case that Google illegally abused its power over online search to curb competition. To defend itself, Google has hired hundreds of employees and three powerful law firms, spending millions of dollars on legal fees and lobbyists.
On Tuesday, a judge in the U.S. District Court for the District of Columbia will begin examining their arguments in a trial that boils down to a long-simmering question: Have today’s tech giants become dominant through breaking the law?
The case – US et al. against Google – is the federal government’s first monopoly lawsuit in the modern internet age, in which a generation of technology companies has meanwhile exerted immense influence on commerce, information, public discourse, entertainment and work. The trial takes the antitrust fight against these companies to a new stage, moving from challenging their mergers and acquisitions to a more in-depth investigation of the companies that brought them to power.
Not since the Justice Department sued Microsoft for antitrust violations in court in 1998 has there been such a momentous technology power case. But since then, companies like Google, Apple, Amazon, and Meta, which owns Facebook and Instagram, have gotten even more involved in people’s lives. Any decision in the process could have far-reaching ramifications, slowing down or potentially crushing the biggest internet companies after decades of unbridled growth.
The stakes are particularly high for Google, the Silicon Valley company founded in 1998 that grew into a $1.7 trillion behemoth by becoming the first place people went online to search the web to search. The government has said in its complaint that it wants Google to change its monopolistic business practices, possibly pay damages and restructure.
“This is a pivotal case and a moment to set precedent for these new platforms that lend themselves to real and enduring market power,” said Laura Phillips-Sawyer, who teaches antitrust law at the University of Georgia School of Law.
The case centers on whether Google illegally cemented its dominance and stifled its competition by paying Apple and other companies to make its Internet search engine the default on the iPhone, as well as other devices and platforms.
The Justice Department argued in its lawsuit that such agreements maintain Google’s monopoly, making it difficult for consumers to use other search engines. Google has stated that its contracts with Apple and others are non-exclusive and that consumers can change the default settings on their devices to choose alternative search engines.
According to Similarweb, a data analytics company, Google has captured 90 percent of the search engine market in the US and 91 percent worldwide.
Fireworks are expected at the trial, which is expected to last ten weeks. Google CEO Sundar Pichai and executives from Apple and other technology companies are expected to be called as witnesses.
Judge Amit P. Mehta, appointed by President Barack Obama in 2014, is leading the trial, which will not have a jury, and will render the final verdict. Kenneth Dintzer, a veteran trial attorney with 30 years of experience at the Justice Department, will lead the government’s arguments in the courtroom, while John E. Schmidtlein, a partner at the law firm Williams & Connolly, will do the same for Google.
The dispute over the process was already fierce. The Justice Department and Google have indicted more than 150 people in the case and created more than five million pages of documents. Google has argued that Jonathan Kanter, the Justice Department’s antitrust director, based on his previous work as a private attorney for Microsoft and News Corp. biased is the case.
Kent Walker, Google’s president of global affairs, said in an interview last month that the company’s tactics are “entirely legitimate” and that its success “depends on the quality of our products.”
“It’s frustrating – maybe ironic – that we’re seeing this backward-looking case and truly unprecedented, forward-looking innovation,” he said.
The Justice Department declined to comment.
Google’s search engine was developed by Sergey Brin and Larry Page in the 1990s when they were students at Stanford University. Their technology has been widely praised for providing more relevant results than other web search tools. Google eventually leveraged that success into new business areas like online advertising, video streaming, maps, office apps, self-driving cars, and artificial intelligence.
Competitors have long accused Google of using its search power to suppress its competitors’ links to travel, restaurant reviews, and maps while giving more meaning to its content. These complaints led to scrutiny by regulators, but little action was taken.
In 2019, the Justice Department and the Federal Trade Commission under President Donald J. Trump decided to launch new antitrust investigations into technology companies as part of a sweeping crackdown. The Justice Department agreed to oversee the investigations into Apple and Google.
In October 2020, the government sued Google for abusing its online search dominance. In its lawsuit, the government accused Google of harming competitors such as Microsoft’s Bing and DuckDuckGo by making deals with Apple and other smartphone makers to become the default search engine in their web browsers or preinstalled on their devices become.
“Two decades ago, Google became the darling of Silicon Valley as a small start-up with an innovative way to search the burgeoning Internet,” the Justice Department said in its lawsuit. “That Google hasn’t existed for a long time.”
Google’s actions have hurt consumers and stifled competition, the agency said, and could impact the future technology landscape as the company positions itself to control “new channels” for search distribution. The agency added that Google behaved similarly to Microsoft in the 1990s, when the software giant made its own web browser the standard on the Windows operating system, crushing the competition.
A group of 35 states, Guam, Puerto Rico and the District of Columbia also filed a lawsuit in 2020, accusing Google of abusing its search and search advertising monopoly to illegally squeeze out competitors. This case is being heard in parallel with the Justice Department’s lawsuit, although Judge Mehta dismissed many of the states’ key arguments in a ruling last month.
In January, the Justice Department filed a separate antitrust lawsuit against Google, accusing the company of abusing its monopoly power in advertising technology. The company faces two other lawsuits from states accusing it of abusing monopolies in advertising technology and blocking competition in its Google Play app store. Google and the states said in a court filing Tuesday night that they had reached an “agreement in principle” to settle the case.
For decades, judges in antitrust proceedings have only ruled against companies if their behavior harms consumers, especially if they have increased prices. Critics say this takes the burden off companies like Google, which offers free web searches.
Google’s Mr. Walker said the case prompted the court to raise that standard yet again.
“American law should be about promoting consumer benefits,” he said, adding, “If we back away from that and make it harder for businesses to provide great goods and services to consumers, it’s going to be bad for everyone.”
Attempts at monopoly can change the direction of industries. In 1984, under pressure from the Justice Department, AT&T split into seven regional telecommunications companies. The split transformed the telecom industry by making it more competitive at the dawn of the mobile era.
But the impact of the government’s antitrust battle with Microsoft in the early 2000s was less clear-cut. The two sides finally settled after Microsoft agreed to end certain contracts with PC makers that were blocking competing software makers.
Some tech executives said the Justice Department’s actions have made Microsoft more cautious and paved the way for startups like Google to compete in the next computing age. Bill Gates, a Microsoft founder, blames the aftermath of the antitrust lawsuit for the company’s slow move into mobile technology and the failure of its Windows Phone. Others, however, argued that the deal did little to increase competition.
Ultimately, the Google trial will test whether the antitrust laws enacted in 1890 to break up the sugar, steel and railroad monopolies can still work in today’s economy, said Rebecca Allensworth, a professor in Vanderbilt University Law School.
“The Google trial is a major test of the government’s entire antitrust agenda because their theory of monopoly is widespread among many big tech companies,” she said.
Source : www.nytimes.com