Google At 25 Faces Allegations Of Paying More Than $10B To Maintain Dominance

Google's search engine has become the internet's main gateway to information. Now the U.S. government is taking aim at that threshold and its dominance. 

The 10-week trial before U.S. District Judge Amit Mehta that began today in a Washington D.C. federal courtroom focuses on agreements between Google and other companies such as Apple and manufacturers that make and sell devices running Android.

It also focuses on rising ad prices, which some say have doubled within the past five years.

The suit also alleges that Google forced defaults in distribution agreements to keep its dominance as the use of mobile search rose, especially in “general” search queries. Google denies that its contracts and conduct break antitrust law.

The trial is the biggest U.S. antitrust proceedings since regulators pursued Microsoft and its dominance of personal computer software one-quarter century ago.



The final judgment could change the makeup of Google and Alphabet. Google Search turned 25 this year.

“Google protects this money machine with a wall built from default and scale,” Kenneth Dintzer, the Justice Department’s lead attorney for the, said in his opening statement.

He plans to show that Google’s monopoly has forced prices to rise in the search advertising market by manipulating its auction process.

Dintzer -- who claims Google has held a monopoly since 2020 -- also said that Google weaponized defaults to block rivals, such as paying and demanding to remain the default on Apple’s Safari browser. He cited an email in which a Google executive told an Apple official: “No default placement, no revenue share.”

"If the DOJ successfully argues that Google’s payments to Apple and contracts with Android phone manufacturers are anticompetitive, it could put a chunk of Google’s 59.9% share of the $68 billion U.S. mobile search market up for grabs," according to Insider Intelligence, which also stated that "Apple could make significant inroads into that market if it creates its own search engine and makes it the new default for its nearly 2 billion active devices.”

Insider Intelligence analysts believe that by using iOS, Apple could build a Google-like system that links search to its other services without triggering antitrust complaints the way Google’s Android contracts have.

“Apple would also add AppTrackingTransparency-like privacy features that could help it avoid the legal trouble Chrome has gotten into recently for tracking ‘incognito’ users," Insider Intelligence says.

Court documents suggest Eddy Cue, Apple senior vice president of services, might be called to the stand.  

The U.S. Justice Department accused Google of stifling Apple’s advancement into becoming a search competitor by paying billions of dollars to device makers like Apple, wireless companies like AT&T, and browser makers like Mozilla to keep Google's search engine on top.

Part of that goes to Apple to maintain its position as the default search engine on web browsers and mobile devices.

Apple is contractually required to provide all its queries to Google.

The U.S. claims that Google pays more than $10 billion annually to maintain its position as the default search engine on web browsers and mobile devices, stifling competition.

Advertisers want to advertise on a general search engine, so when the focus turned to “general” search queries (defined as a “one-stop shop”) the government also tried to argue that the market is really about Google and Bing -- and more so Google than Bing, because of its dominance. This is a topic that will become crucial in this trial.

Evidence presented to demonstrate the uniqueness of general search provided the example of a professor and economist who searched for "UFO" on Google, which returned 1.94 billion answers from news and alternative destinations. On Amazon -- with less than 10,000 answers -- the results focused on books, electronics and toys; Expedia, none; and Facebook, seven.

The trial is scheduled to continue into late November, after which another round of court filings and arguments are expected.

The ruling is not expected until early next year. Depending on the outcome, it could trigger another trial to determine which measures will be taken.

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