U.S. Department of Justice lawyers, including Kenneth Dintzer, center, and Megan Bellshaw, right, arrive at the E. Barrett Prettyman U.S. Federal Courthouse on Sept. 12, 2023 in Washington. | Nathan Howard/AP Photo
The Justice Department told a federal judge today that Google illegally abused its monopoly power as the largest online search tool to eliminate any potential competition from companies like Microsoft.
“This case is about the future of the internet, and whether Google’s search engine will ever face meaningful competition,” said DOJ lawyer Kenneth Dintzer during opening arguments in an antitrust trial seeking to break up Google’s power over the internet search and advertising industry. “To protect that future, we need to look to the past.”
Dintzer told U.S. District Judge Amit Mehta in Washington, D.C., that the government will prove Google willfully maintained an illegal monopoly starting as far back as 2010. He accused the internet giant of setting in motion a data and ad-driven feedback loop that “has been turning for more than 12 years – and it always turns to Google’s advantage.”
The DOJ’s lawsuit against Google claims the company has become the most-used search engine not because of a superior product, but because it illegally uses its money to box out its competitors – often by preventing potential rivals from accessing the data needed to compete.
“Google’s scale hermetically seals it from competition, and the court will hear from Google’s rivals that data is necessary to compete,” Dintzer said. There is also “direct evidence that Google is ignoring privacy concerns because it does not care about competition,” Dintzer said. Google’s conduct “affects all consumers, even those that prefer Google.”
The non-jury trial, which is expected to last two months, will be decided by Mehta, an Obama appointee. The trial kicked off in a packed courtroom, which Mehta joked “had the highest concentration of blue suits in D.C.” Jonathan Kanter, the top antitrust prosecutor at the DOJ and some of his key deputies were present in the courtroom, as was Kent Walker, Google’s head lawyer and the architect of its defense.
A court loss for Google could force major changes to its business arrangements and even the potential sale of key parts of the company. It would also put Google’s fellow internet giants on edge, as they face their own investigations and lawsuits.
In Google’s opening statement, it disputed the government’s case. “When the plaintiffs filed these lawsuits nearly three years ago, they did so with great public fanfare,” said John Schmidtlein, the company’s lead lawyer. He said the DOJ “claimed Google was the gatekeeper of the internet — but it turns out there are lots of ways users access the web other than default search engines. And people use them all the time.”
Over the next eight to 10 weeks, top executives from Google, Apple, Microsoft, Samsung and other companies will testify about the benefits and drawbacks of Google’s outsized role in the internet — arguing over whether the company is an aggrieved innovator being punished for its success or if it has intentionally stifled competition for its own financial gain.
The case centers on a series of revenue-sharing agreements, worth tens of billions of dollars annually, that Google has with Apple, Mozilla, Samsung and others to be the default search engine on web browsers and mobile phones, as well as its control of the ads that populate search results. Google does not disclose the exact value of the deals.
The DOJ says those contracts have hindered the ability of rivals to compete and deprived consumers of the benefits of high-quality, innovative services that only competition can foster.
“Google walks when it should run,” Dintzer said. “The lack of investment directly affects the quality of results.”
Schmidtlein, though, said the case was mostly about propping up Microsoft. “At every critical juncture, the evidence will show they [Microsoft] were beaten in the market — preferring instead to focus on their Windows monopoly,” Schmidtlein said.
“All of these companies want to be the default,” Schmidtlein said. The competition to be the default “are good for search innovation — and if Google is prevented from competing that is not going to make Microsoft or DuckDuckGo, or anyone else, run faster.”
The DOJ’s lawsuit leans heavily on a related Microsoft matter, its antitrust case against the software giant from the late 1990s. There the government accused the software giant of monopolistic behavior in making Internet Explorer the default browser in its Windows operating system, using the dominance of Windows to crush potential competitors such as Netscape.
The government initially won that case in district court, including a ruling breaking up the company. That was reversed on appeal, and the case ultimately ended in a settlement where Microsoft agreed to not block rival software companies in its contracts with computer makers. The ruling though is still a key legal precedent for monopolization cases.
Schmidtlein said however, that Google’s conduct is different. “Microsoft violated U.S. antitrust law by using its Windows monopoly to ... delete a browser preferred by consumers,” he said. “Google competed on the merits to earn pre-installation and default status ... those facts could not be more opposite and different than U.S. versus Microsoft.”
According to some estimates, including those cited in the DOJ’s lawsuit, Google controls about 90 percent of the search engine market in the U.S. and globally. The company “protects this money machine with a wall of defaults,” Dintzer said.
Google points to Mozilla switching its default search engine for its Firefox browser back to Google, after a brief experiment with Yahoo!, as evidence that the search giant’s product is superior.
But Dinzter said Yahoo! paid more than Google, and needed to fund that expense with more ads, which negatively impacted quality, so the company switched back to Google.
The DOJ and states say Google illegally monopolized the markets for “general search” and “general search advertising.” That essentially includes just Google, Microsoft’s Bing and a few other smaller players like DuckDuckGo. Google argues that fails to take in other sources of information, such as Amazon and TikTok.
Mehta showed himself to be an active questioner, peppering Dintzer and Cavanaugh with questions during opening statements — a time that typically goes uninterrupted. That included wanting to know why companies including Amazon and TikTok are not competitors. “Why is that wrong?” Mehta asked.
Those services don’t index the web,” Dintzer said. “The information on TikTok is limited to the information on TikTok. It’s not that those other services can’t answer some queries, but they can’t answer all queries with information from the internet.”
Nearly every state and the District of Columbia, Guam and Puerto Rico are also suing Google alongside the DOJ. They have similar claims to the DOJ, as well as allegations Google used its search advertising tool, SA360, to block advertisers from buying ads through Microsoft’s Bing.
The states also challenged how Google designs its search pages to discriminate against more specialized rivals like Yelp for local businesses, or Expedia for travel. Last month, however, Mehta threw out the latter argument, saying the AGs offered no evidence that Google’s conduct harmed the specialized search market.
“With SA360, Google puts another thumb on the scale, denying features to Microsoft,” said William Cavanaugh, on behalf of the states. Cavanaugh said Google denied features for Microsoft ads, that it used for itself.
The DOJ and states have also said Google has sought to stymie its investigation and lawsuit at every turn. And while bare-knuckle tactics are common in every courtroom, the government says Google destroyed a great deal of evidence in the form of deleted internal instant messages and abused its legal privilege to withhold other documents. The trial will be peppered throughout with disputes over missing evidence, and Mehta could ultimately sanction the company if he finds it acted nefariously.
Following opening statements, Hal Varian, Google’s chief economist will be the first witness.
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