Google Reportedly Pays Over $10 Billion Annually to Maintain Search Market Share
In an accusation made on Tuesday, the US government claimed that Google pays approximately $10 billion annually to Apple and other companies as a means to protect its dominant position in the realm of online search.
The indictment came on the opening day of the landmark trial, the largest antitrust case in the United States in more than two decades.
“This case is about the future of the Internet and whether Google will ever face meaningful competition in search,” said Justice Department attorney Kenneth Dintzer as the U.S. government began to raise its case against the tech titan.
More than 10 weeks and dozens of witnesses have been called, Google is trying to convince Judge Amit P. Mehta that the case brought by the Justice Department is without merit.
“Google has spent decades innovating and improving its search engine, the plaintiffs are running away from this inescapable truth,” Google lawyer John Schmidtlein argued in court.
The trial in a Washington courtroom is the first time U.S. prosecutors have gone head-to-head with a major technology company since Microsoft was targeted more than two decades ago over the dominance of its Windows operating system.
“Even in Washington, D.C., I think we have the most blue suits of any place today,” Mehta joked as he observed the dozens of lawyers packed into his courtroom.
Google’s case centers on the government’s claim that the tech titan unfairly gained power in online search by striking exclusive deals with device makers, cell phone carriers and other companies that left rivals unable to compete.
Dintzer told Judge Mehta that Google pays $10 billion each year to Apple and others to secure its search engine’s default status on phones and web browsers, burying upstarts before they have a chance to grow.
Over the past decade, this created what the government calls a “feedback loop” in which Google’s dominance grew further thanks to its monopolistic access to user data that competitors could never match.
“Through this feedback loop, this wheel has been turning for over 12 years. It always turns in Google’s favor,” Dintzer said.
This dominance has made Google’s parent company, Alphabet, one of the richest companies in the world. Search ads generate nearly 60 percent of the company’s revenue, dwarfing revenue from other activities such as YouTube or Android phones.
“We’re looking at what Google did to maintain its monopoly … It’s not about what it could have done or should have done, it’s about what they did,” Dintzer told the court.
– The court “cannot interfere” –
Google strongly rejected the US case, saying its search engine had succeeded because of its quality and huge investments over the years.
“This court can’t step into the market and say, ‘Google, you can’t compete.'” That’s a potato for US antitrust law, Google’s Schmidtlein said.
Schmidtlein insisted that testimony from Apple and other executives shows that Google won the coveted default for the iPhone and browsers “on the merits.”
The biggest alleged victims in the case are rival search engines that have yet to gain significant market share in search or search advertising against Google, such as Microsoft’s Bing and DuckDuckGo.
Google is still the world’s most popular search engine, capturing 90 percent of the market in the United States and around the world. Most of that comes through mobile usage on iPhones and phones running Google’s proprietary Android.
Mehta’s verdict is expected for many months after about three months of hearings.
He could reject the government’s claims or order drastic corrective measures, such as breaking up Google’s companies or reforming its operations.
Whatever the outcome, either side will almost certainly appeal the decision, which could take years.
The Washington case against Microsoft, launched in 1998, ended in a settlement in 2001 after an appeal overturned an order to break up the company.
