Google Claims Its Search Engine is Most Popular Among Users

During the commencement of a high-stakes antitrust trial in Washington, a Google lawyer stated that companies opt for Alphabet Inc.’s Google as their default search engine for browsers and smartphones due to its superior performance, rather than a lack of competition.

Consumers use Google “because it adds value to them, not because they have to,” John Schmidtlein, a partner at Williams & Connolly LLP representing the company, said in his opening statement on the first day of the trial. “Users today have more search options and ways to get information online than ever before.”

Schmidtlein rejected claims by U.S. Justice Department competition officials that Google has used its market power — and billions of dollars in exclusive rights to web browsers — to illegally block competitors. Users have a choice and switching is easy, he said. For example, Microsoft Corp. preselects its own search engine, Bing, for Windows PCs, but most PC users switch to Google because it’s a better product, he said.

Web browsers offered by Apple Inc. and Mozilla, which makes Firefox, have long chosen the default search engine in exchange for revenue sharing that helps pay for innovation, Schmidtlein said.

“Google won these competitions on merit,” he said. “There are many ways for users to access the Internet other than through the default search engines, and people use them all the time.”

The antitrust lawsuit is the first federal case against a U.S. technology company in more than two decades. The Justice Department and 52 attorney generals from states and U.S. territories allege that Google illegally maintained its monopoly by paying billions to tech rivals, smartphone makers and wireless carriers in exchange for making it the pre-op or default setting on cellphones and web browsers.

This first phase of the trial will assess whether Google has illegally monopolized the online search market. U.S. District Judge Amit Mehta, who is overseeing the trial, is expected to rule next year on whether Google violated the law. If the Justice Department wins, it could seek remedies in the second phase of the trial to cut off Alphabet’s search operations from other products, such as Android and Google Maps, in what would be the biggest forced breakup of a U.S. company since AT&T was dissolved in 1984. .

Mehta asked Schmidtlein to respond to the Justice Department’s main contention that “what you say is competition on defaulters is not real competition, that only Google can be chosen as the default.” A government lawyer previously said Google controls 89 percent of the market.

Schmidtlein said Google’s size doesn’t always determine its profits, and that a judge shouldn’t “second-guess” Apple and Mozilla’s browser design decisions. In 2014, Mozilla became Yahoo’s default search engine, and it “significantly hurt” Mozilla as users switched to other browsers that use Google, Schmidtlein said.

The revenue a browser gets from default search settings is the “primary” way to make money, Schmidtlein said. This encourages companies to invest money in innovation and developing better browsers or devices, he said.

Earlier, a Justice Department lawyer said Google pays more than $10 billion a year to maintain its position as the default search engine on web browsers and mobile devices, stifling competition.

“This case is about the future of the Internet and whether Google’s search engine will ever face meaningful competition,” government attorney Kenneth Dintzer said in his opening statement. “The evidence shows that they are claiming default exclusivity to prevent competitors.”

“Armed” search

Dintzer said Google had “weaponized” the use of default agreements to block its competitors and used its market power to prevent Apple from using alternatives better than Google as the default browser on its computers, phones and other devices.

Apple first licensed Google to use its Safari search engine in 2002, with no money or exclusivity required, Dintzer said. Three years later, Google approached Apple to propose a revenue-sharing deal, he said.

In 2007, Apple wanted to offer a selection screen that would have allowed users to choose between Google and Yahoo, according to Dintzer. But Google responded by email: “No default placement, no revenue sharing,” he said. “This is monopolistically flexible,” Dintzer said, adding that Apple had no choice but to give in to Google.

By 2020, Google paid Apple $4-7 billion for Safari, Dinner set default.

Google is paying more than $1 billion to wireless carriers to be the default on Android smartphones under agreements designed to protect Google from competitors, Dintzer said.

For example, Samsung Electronics Co. and AT&T Inc. partnered with a start-up called Branch Metrics Inc. to create a product that allows a user to look up information about apps already loaded on a phone, a government lawyer said. Google saw this as a “threat,” Dintzer said, and later changed its contracts with AT&T and Samsung to prohibit it.

Google claims it competes with several other online sites, including TikTok and Meta Platforms Inc.’s Facebook. But Dintzer said these services don’t offer a “one-stop” shopping experience on the Internet.

Advertising revenue growth

William Cavanaugh, an attorney with Patterson Belknap Webb & Tyler LLP who is representing the states in the case, told the judge that Google’s monopoly led to a rise in the company’s ad revenue, which could drive up online ad prices.

Google gets “a large portion of its revenue” from text ads that appear at the top of the search results page, Cavanaugh said. That includes advertisers known as “vertical search” competitors — companies like Yelp Inc. or Expedia Group Inc. that offer information about a single topic — that spend billions of dollars to make sure consumers find them when they search online through Google, he said.

“They put billions and billions of dollars into advertising on mainstream search engines” to get people to their website,” Cavanaugh said. If Google were really the same as other sites like Amazon, “they wouldn’t have to do that,” he said.

Expedia’s spending on Google marketing has grown over the years, creating “an incentive to go somewhere else, but there was nowhere else to go,” Cavanaugh said. Google accounted for 98% of the mobile search business, while Microsoft’s Bing accounted for just 2%, he said.

Google has faced several related investigations abroad, including three EU cases in which the company has collected more than 8 billion euros ($8.6 billion) in fines for abusing its dominant position in its mobile operating system and search business. and its display advertising activities.

Dintzer said the government’s first witness in the trial will be Hal Varian, Google’s chief economist.

Kent Walker, Google’s legal counsel, participated in the opening remarks, sitting in the front row behind the company’s lawyers. Jonathan Kanter, Deputy Minister of Justice for Competition, also participated on behalf of the Ministry of Justice.