The U.S. Department of Justice and a coalition of state attorneys general started an antitrust trial against Alphabet’s (GOOGL.O) Google on Tuesday, kicking off the most high-profile technology lawsuit in decades. The government, in its opening statements, argued that the $1.7 trillion company’s search engine partnerships illegally protected its monopoly, harming consumers. Google, meanwhile, touted its superior tool. History suggests such cases will be difficult for the government to win. Google, though, is fighting a losing battle.
The case boils down to whether Google’s behavior harmed consumers via a monopoly that it created illegally. It’s indisputable that Google takes and uses data, which begets a better algorithm which attracts consumers, and, by consequence, more data. DOJ Attorney Kenneth Dintzer called this a “feedback loop." The problem for the DOJ is that consumers readily dole out their data, and not just to Google. The likes of Amazon.com (AMZN.O) and Meta Platforms (META.O) glean information this way, too.
The government has a few aces. It might, for example, nail Google if the company forged partnerships that left consumers or other advertisers with no other choices. Dintzer argued to Judge Amit Mehta that Google pays more than $10 billion every year to keep its position as a default search engine and had communications about the powerful effect such partnerships would have on its share.
But it isn’t always cut-and-dried. Device manufacturers and browser creators choose Google because it’s the highest quality option, and users can easily pick another default search engine, John Schmidtlein, Google’s lead lawyer, argued. Plus the government’s antitrust fight against Microsoft (MSFT.O) in 1998 suggests wrinkles. The DOJ argued then that the tech giant illegally restricted users’ ability to uninstall its software. The District Court ordered that Microsoft split into two separate units, but the ruling was overturned after the company successfully argued the judge was biased. Such niggles are possible when companies employ the world’s best lawyers.
Even if the DOJ doesn’t succeed, though, Google’s life is getting harder. It faces another federal lawsuit against its ad technology practices. Importantly, the current case will show in more detail the search engine’s inner workings. They may not be illegal, but revelations may expose the extent to which Google goes to get data, and that may feel creepy, further souring public perception of the company and Big Tech in general. The government’s lawyers have their work cut out for them, but a DOJ loss won’t mean a Google victory.
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
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The U.S. Department of Justice and a coalition of 38 state attorneys general began an antitrust trial against Alphabet’s Google on Sept. 12. The lawsuit, first filed on Oct. 20, 2020, alleges the tech giant unlawfully maintained a monopoly for its search business by forming partnerships with device manufacturers and internet browsers to use its search engine as the product’s default option. The anticompetitive behavior harmed consumers by giving them fewer choices, stifled innovation from potential competitors, and hurt advertisers by forcing them to pay higher rates, the government alleged.
“This case is about the future of the internet and if Google’s search engine will ever face meaningful competition for online searches," Kenneth Dintzer, who led the government’s case, said to Judge Amit Mehta in opening arguments.
Google defended its business by arguing its dominance is a result of its higher-quality search results. The company’s partnerships may set Google as the default search engine on devices and browsers, but users can usually change their default option with a few clicks. The company also noted that its searches are free, and therefore provide a net benefit to consumers.
Users today have more search options "than ever before," and keeping Google from making default-search-engine agreements would bring "serious harm to competition," John Schmidtlein, Google's lead lawyer in the case, said in his opening argument.
