Today, US District Judge Amit Mehta presided over the opening statements in the Department of Justice’s antitrust case challenging Google’s search dominance. Judge Mehta will be the sole arbiter in determining whether Google has upheld its position as the global search leader through fair competition, as Google asserts, or if it has engaged in anticompetitive practices, as alleged by the DOJ.
Kenneth Dintzer of the DOJ initiated the proceedings by conveying the department’s intention to demonstrate that Google has unlawfully maintained its monopoly in the search and advertising markets since 2007. This, he argued, was achieved through the strategic “weaponization” of its status as the default search engine on mobile devices.
To support their case, the Department of Justice (DOJ) intends to call upon Hal Varian, who served as Google’s chief economist during the period in question. Another crucial witness will be Sridhar Ramaswamy, the co-founder of the now-defunct search engine Neeva. Ramaswamy will testify about the ongoing barriers that Google imposes on new search providers today. Dintzer, the DOJ’s representative, noted that the majority of their witnesses have either current or former affiliations with Google or have a financial stake in Google’s activities.
The opening statements largely rehashed the arguments presented in the pre-trial briefs filed by both the DOJ and Google the previous week. Ars has provided a more detailed summary of these arguments. The core of the DOJ’s position is that Google consistently hindered competition in the search market and impeded innovations that could have improved web searches for consumers in terms of speed and quality.
Challenges and Complexities in the Google Antitrust Case
Judge Mehta sought clarification on several points, including the duration of Google’s alleged illegal monopoly (over a decade, according to the DOJ) and the extent to which Google’s search traffic is derived from being set as the default search engine (50 per cent).
William Cavanaugh, representing the state of Colorado, introduced a unique claim regarding Google’s search engine marketing (SEM) tool, SA 360. Cavanaugh argued that Google had a “duty to deal” with Microsoft and incorporate Bing ads into SA 360. However, Google allegedly delayed implementing Bing ads, seemingly motivated by its monopoly position to weaken a competitor.
It remains uncertain whether Cavanaugh’s arguments swayed Judge Mehta or if Google’s lawyer, John Schmidtlein, successfully countered the claim by asserting that there was no contractual obligation between Google and Microsoft, thus eliminating any “duty to deal.”
Understanding these arguments requires a solid grasp of tech history, given that the case spans over a decade, during which browsers, phones, and search engines evolved rapidly. In addition to addressing complex antitrust questions, Judge Mehta may grapple with keeping track of basic facts regarding how web search was conducted at different points in the case’s timeline. During Cavanaugh’s opening statement, Judge Mehta briefly appeared confused about certain references to today’s technology, such as whether Mozilla was a browser or a search engine. He also struggled to comprehend the intricacies of SEM and the options available to Microsoft for promoting Bing ads independently of Google’s SEM tools.
Schmidtlein’s Counterarguments: Google’s Competitive Landscape and Microsoft’s Choices
Schmidtlein’s opening statements came last. Google’s lawyer began by informing Mehta that there are numerous methods to explore the internet apart from Google search, and people actively utilize these alternatives. For instance, younger individuals increasingly rely on social networks such as TikTok for information searches, as indicated by Schmidtlein. This suggests that Google faces robust competition from a variety of search providers, not solely from rival general search engines, as alleged by the DOJ.
While much of Schmidtlein’s remarks were centred on demonstrating that Google is driven to innovate to maintain its position as the premier search engine and sustain valuable default search engine agreements, he also criticized the plaintiffs for portraying Microsoft as a victim of Google’s search dominance. According to Schmidtlein, Microsoft possessed the financial resources to make significant investments in mobile search, just like Google did, but it made a deliberate choice not to do so, prioritizing investments in its “Windows desktop monopoly” instead. In essence, Microsoft’s failure to establish itself as a search leader can be attributed not to Google’s default agreements with mobile providers like Apple or browsers like Mozilla but to Microsoft’s development of inferior search products.
Debate Over Google’s Monopoly Power and Competition in Search
To support Google’s contention that it does not hold monopoly power in a relevant market, Google intends to present testimony from senior executives at Mozilla and Apple. These executives will testify that Google secured default agreements with mobile providers and browsers due to the exceptional quality of its search engine.
Schmidtlein argued that if the court prohibited Google from competing for default agreements, it would harm competition. He claimed that Google’s revenue share had been instrumental in improving mobile phones and browser functionality for search over the past decade. Schmidtlein also mentioned that switching default search engines for Safari and Mozilla users is relatively easy and that changing defaults could lead some users to switch browsers entirely.
In response, Mehta questioned whether there was any data from Safari or Mozilla indicating how often users switch default search engines. Schmidtlein admitted there was no definitive data, but he argued that Google would present evidence of users switching when Bing is set as the default.
Schmidtlein concluded by stating that defaults are valuable but can’t ensure success if the product is inferior. He accused the DOJ and Colorado of trying to distort search competition by hindering Google’s ability to compete, with the misguided belief that temporarily forcing people to use inferior products would benefit long-term competition.
He emphasized that U.S. antitrust law doesn’t support such radical market intervention and is rooted in sound economic principles.