US Alleges Google Spends Over USD 10 Billion Annually To Sustain Its Search Market Leadership

\Google has used its dominance in the Internet search market to shut out competitors and stifle innovation, the Justice Department charged Tuesday at the opening of the largest U.S. antitrust trial in a quarter century.

“This case is about the future of the Internet and whether Google’s search engine will ever face meaningful competition,” said Kenneth Dintzer, the Justice Department’s chief legal counsel.

Over the next 10 weeks, federal lawyers and state attorneys general will try to prove that Google rigged the market in its favor by locking its search engine as the default choice in many places and devices.

U.S. District Judge Amit Mehta likely won’t issue a sentence until early next year. If he decides that Google broke the law, another trial will decide what steps should be taken to rein in the Mountain View, California-based company.

Top executives from Google and its parent company Alphabet Inc., as well as top executives from other powerful technology companies, are expected to testify.

Among them is likely to be Alphabet CEO Sundar Pichai, who succeeded Google founder Larry Page four years ago. Court documents also suggest that Eddy Cue, a high-ranking Apple executive, may be called to the stand.

The Justice Department filed an antitrust lawsuit against Google nearly three years ago during the Trump administration, alleging that the company has used its dominant position in Internet search to gain an unfair advantage over competitors. Government lawyers argue that Google is protecting its franchise through a form of payola, paying billions of dollars a year to be the default search engine on iPhones and browsers such as Apple’s Safari and Mozilla’s Firefox.

“Google pays more than $10 billion a year for these privileged positions,” Dintzer said.

“Google’s contracts ensure that competitors can’t match the monetization of search-quality ads, especially on phones,” Dintzer said.

“Through this feedback loop, this wheel has been spinning for over 12 years. It’s always in Google’s favor.” Dintzer said the more searches Google processes, the more data it collects — data that can be used to improve future searches and give it an even bigger advantage over its competitors.

“User data is the oxygen of a search engine,” he said. Because of its market position, “Google’s search and advertising products are better than the competition can hope for.” That’s why Google pays so much to be the default search engine for Apple and other products. companies.

Dintzer said Google “started setting defaults” more than 15 years ago, citing an internal Google document that called its arrangements an “Achilles heel” for rival search engines Yahoo and MSN.

He also accused Google of strong-arming Apple into giving its search engine the default position on its devices as a condition for receiving revenue sharing payments. “This is not a negotiation,” Dintzer said.

“This is what Google says: Take it or leave it.” The lawsuits allege that the company’s anti-competitive tactics prevented Apple from developing its own search engine.

And Dintzer said Google removed the documents to keep them out of court proceedings and tried to hide others with attorney-client privilege. “They destroyed documents for years,” Dintzer said. “They shut down history, your honor, so they could rewrite it in this court.” Google counters that it faces extensive competition, even though it controls about 90 percent of the Internet search market. Google claims its competitors range from search engines like Microsoft’s Bing to websites like Amazon and Yelp, where consumers can post questions about what to buy or where to go.

From Google’s point of view, the constant improvements to its search engine explain why people almost reflexively return to what long ago made “Googling” synonymous with looking things up on the Internet.

The trial comes just a couple of weeks after 25 years since the company’s first investment — a $100,000 check written by Sun Microsystems founder Andy Bechtolsheim that allowed Page and Sergey Brin to set up shop in a Silicon Valley garage.

Today, Google’s parent company, Alphabet, is worth US$1.7 trillion and employs 182,000 people. Most of the money comes from the $224 billion in annual advertising sales that flow through a network of digital services anchored by a search engine that sends billions of queries a day.

The Justice Department’s antitrust case echoes a case it brought against Microsoft in 1998. Regulators then accused Microsoft of forcing computer manufacturers that relied on its dominant Windows operating system to also use Microsoft’s Internet Explorer — just as the Internet was becoming more popular. This bundling practice crushed the competition with the once popular Netscape browser.

Several members of the Justice Department’s team on the Google case — including lead Justice Department attorney Kenneth Dintzer — also worked on the Microsoft investigation.

Google could be in trouble if the lawsuit ends in concessions that weaken its power. One possibility is that the company will have to stop paying Apple and other companies to make Google the default search engine on smartphones and computers.

Or a legal battle could force Google to focus.

This is what happened to Microsoft after its antitrust settlement with the Department of Justice. Disintegrated, the software giant struggled to adapt to the effects of Internet search and smartphones. Google capitalized on this disruption to jump from its startup roots to an impressive powerhouse. (AP) RUP RUP