U.S. vs. Google: Highlights from the Ongoing Antitrust Case

Adgully Bureau |

The legal battle between the U.S. government and Google is approaching its halfway point as allegations of antitrust violations are being scrutinized. Here are five significant takeaways from the ongoing trial:

  1. Google's Multi-Billion Dollar Payments for Search Dominance: Witnesses from companies like Verizon, Samsung, and Google itself revealed that Google pays around $10 billion annually to ensure its search engine remains the default on smartphones and web browsers. Critics argue these practices harm competition, with privacy-focused search engines like DuckDuckGo and Neeva citing adverse effects. Neeva, one such competitor, ceased operations earlier this year. Google's executive, James Kolotouros, testified that these agreements granted Google exclusive search privileges and that the company closely monitored compliance.
  2. Impact of Google's Search Dominance on Ad Prices: Google's executive, Adam Juda, explained the role of a formula in determining Long Term Value (LTV) and ad quality, affecting which advertiser wins the split-second ad auction. Advertisers are not informed of their LTV, and Google uses "tunings" to adjust ad prices. Testimony by Joshua Lowcock, global chief media officer for UM Worldwide, highlighted Google's dominance in the market for search-related ads, leading to increased ad prices over the last decade. In 2020, Google generated over $100 billion from search ads, as acknowledged by Jerry Dischler, Google's vice president and general manager of ads.
  3. Search Queries as an AI Advantage: Microsoft CEO Satya Nadella emphasized the importance of access to search queries on a massive scale, similar to Google's, for improving search engines and dominating artificial intelligence. Nadella pointed out that enhancing AI relies on sufficient computing power, including servers, and large volumes of data to train software.
  4. Google's Defense Argument 1: Quality Trumps Antitrust Allegations: Google has countered the government's claims by asserting its search engine's immense popularity is primarily due to its quality. Google argues that dissatisfied users can readily switch to alternatives. Apple's senior vice president of services, Eddie Cue, praised Google's search engine quality and confirmed discussions with Microsoft and DuckDuckGo. However, he deemed these alternatives inadequate during questioning.
  5. Google's Defense Argument 2: Default Status Doesn't Guarantee User Loyalty: Google contends that despite paying billions each year to be the default search engine on Apple and Android devices, this status does not guarantee user loyalty. Google's lead lawyer, John Schmidtlein, cited instances where Microsoft's default status on certain devices eventually led users to bypass Bing and conduct most of their searches on Google.

The trial, which commenced on September 12, is expected to continue until mid-November, with the U.S. Justice Department scrutinizing Google's tactics in online search and advertising. The central question revolves around whether Google violated antitrust laws in dominating these sectors.