Google has exploited its dominance of the internet search market to lock out competitors and smother innovation, the Department of Justice said Tuesday at the opening of the biggest U.S. antitrust trial in a quarter century.
鈥淭his case is about the future of the internet and whether Google鈥檚 search engine will ever face meaningful competition,鈥� said Kenneth Dintzer, the Justice Department鈥檚 lead litigator.
Over the next 10 weeks, federal lawyers and state attorneys general will try to prove Google rigged the market in its favor by locking in its search engine as the default choice in a plethora of places and devices. U.S. District Judge Amit Mehta likely won鈥檛 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 Mountain View, California-based company.
Top executives at Google and its corporate parent Alphabet Inc., 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.
The Justice Department filed its 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鈥檚 Safari and Mozilla鈥檚 Firefox.
鈥淕oogle pays more than $10 billion per year for these privileged positions,鈥欌�� Dintzer said.
鈥淕oogle鈥檚 contracts ensure that rivals cannot match the search quality ad monetization, especially on phones,鈥� he said. 鈥淭hrough this feedback loop, this wheel has been turning for more than 12 years. It always turns to Google鈥檚 advantage.鈥�
Google counters that it faces a wide range of competition despite commanding about 90% of the internet search market. Its rivals, the company argues, range from search engines such as Microsoft鈥檚 Bing to websites like Amazon and Yelp, where consumers can post questions about what to buy or where to go. 鈥淭here are lots of way users access the web other than default search engines, and people use them all the time,鈥欌�� said attorney John Schmidtlein, a partner at the law firm Williams & Connolly which is representing Google.
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. 鈥淯ser data is the oxygen for a search engine,鈥� he said. Because of its market dominance, 鈥淕oogle search and ad products are better than its rivals can hope to be.鈥�
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.
Google 鈥渂egan weaponizing defaults鈥� more than 15 years ago, Dintzer said, citing an internal Google document calling its arrangements an 鈥淎chilles Heel鈥� for rival search engines offered by Yahoo and MSN.
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. 鈥淭his is not a negotiation,鈥� Dintzer said. 鈥淭his is Google saying: Take it or leave it.鈥�
Litigators argue the company鈥檚 anticompetitive tactics prevented Apple from developing a search engine of its own.
And Dintzer said Google deleted documents to keep them out of court proceedings and sought to hide others under attorney-client privilege.
鈥淭hey destroyed documents for years,鈥欌�� Dintzer said. 鈥淭hey turned history off, your honor, so they could rewrite it in this court.鈥欌��
While questioning Google chief economist Hal Varian 鈥� the trial鈥檚 first witness 鈥� 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. 鈥淲e should be careful about what we say in both public and private,鈥欌�� Varian wrote. References to 鈥渃utting off their air supply鈥欌�� and similar comments, for instance, 鈥渟hould be avoided.鈥欌��
From Google鈥檚 perspective, perpetual improvements to its search engine explain why people almost reflexively keep coming back to it, a habit that long ago made 鈥淕oogling鈥� synonymous with looking things up on the internet. Schmidtlein said Google鈥檚 tweaks simply made its search better than key rival Bing. 鈥淎t every critical juncture,鈥� he said, 鈥渢hey were beaten in the market.鈥�
The trial begins just a couple weeks after the 25th anniversary of the first investment in Google 鈥� 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鈥檚 corporate parent, Alphabet, is worth $1.7 trillion and employs 182,000 people, with most of the money coming from $224 billion in annual ad sales flowing through a network of digital services anchored by a search engine that fields billions of queries a day.
The Justice Department鈥檚 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鈥檚 Internet Explorer 鈥� just as the internet was starting to go mainstream. That bundling practice crushed competition from the once-popular browser Netscape.
Several members of the Justice Department鈥檚 team in the Google case 鈥� including Dintzer 鈥� also worked on the Microsoft investigation.
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.
Or the legal battle could cause Google to lose focus. That鈥檚 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 capitalized on that distraction to leap from
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