Google’s dominance as an Internet search engine is the result of an illegal monopoly led by the more than $20 billion the tech giant spends each year blocking competition, Justice Department lawyers argued in closing a high-profile antitrust lawsuit.
Google, on the other hand, maintains that its ubiquity is due to its excellence and ability to deliver the results customers are looking for.
“It would be an unprecedented decision to punish a company for a substantive victory,” Google lawyer John Schmiddlein said delayed Friday afternoon, summarizing the company’s closing arguments.
Justice Department lawyer Ken Dintzer told the judge that “today has to be the day” he can step in and stop Google’s monopolistic behavior, which he compared to tactics used by Microsoft two decades ago that sparked a similar antitrust fight.
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The U.S. government, a coalition of states and Google made closing arguments Friday in a 10-week lawsuit before U.S. District Judge Amit Mehta, who must now decide whether Google broke the law by maintaining monopoly status as a search engine.
Much of this case – the largest antitrust trial in more than two decades – focused on the extent to which Google derives its power from deals with companies such as Apple that make Google the default search engine pre-installed on cell phones and computers.
At trial, evidence showed that Google spends more than $20 billion a year on such contracts. Justice Department lawyers say the huge sum shows how critical it is for Google to become the default search engine and prevent competitors from gaining a foothold.
Google counters that customers could easily switch to other search engines if they wanted to, but consumers invariably prefer Google. Companies like Apple testified during the trial that they partnered with Google because they believed its search engine was better.
Google also argues that the government is defining the search market too narrowly. Although Google has a dominant position over other general search engines such as Bing and Yahoo, Google says it faces much more intense competition as consumers make targeted searches. For example, the tech giant says shoppers may be more likely to search for products on Amazon than on Google, people planning a vacation may be more likely to search for products on AirBnB, and hungry diners may be more likely to search for restaurants on Yelp.
Google said social media companies such as Facebook and TikTok also face fierce competition.
During Friday’s arguments, Mehta questioned whether some of these other companies were actually operating in the same market. He said social media companies can generate advertising revenue by trying to present ads that appear to match a consumer’s interests. But he said Google could place ads in front of consumers in direct response to the search queries they submitted.
“Only Google can we see the declared intent directly,” Mehta said.
Schmiddlein responded that social media companies “have a ton of information about your interests, which I would say is just as powerful.”
The company also argued that its market power was faint because the Internet was constantly changing. At the beginning of the trial, the Court noted that many experts once believed it was indisputable that Yahoo would always dominate search engines. Today it was found that younger tech consumers sometimes think of Google as “Grandpa Google.”
Government lawyers also argued that the technology company should be sanctioned for “systemic document destruction,” which they said was aimed at intentionally concealing evidence of monopolistic intentions and practices.
Evidence from the trial showed that Google lawyers advised employees to make sure their work calls were not recorded because of potential legal ramifications.
The government asked Mehta to impose a sanction that would allow the judge to conclude that all the deleted chats were unfavorable to Google because of their anti-competitive intent.
Mehta said he wasn’t sure whether he would grant the government’s request, but was sharply critical of its document retention practices and speculated that some type of sanctions should be imposed.
“Google’s document retention policy leaves much to be desired,” he said. “I find it shocking or surprising that a company leaves it to its employees to decide when to keep records.”
Google lawyer Colette Connor defended the company’s practice of generally not storing internal company chats. “Given the typical operate of chat rooms, this was reasonable,” she said.
Although Google’s search services are free to consumers, the company generates search revenue by selling advertising that accompanies a user’s search results.
Justice Department attorney David Dahlquist said during Friday’s arguments that Google was able to boost its advertising revenue by increasing the number of search queries entered until around 2015, when query growth slowed and the company had to make more money on each search.
The government argues that Google’s search monopoly allows it to charge advertisers artificially higher prices, which ultimately passes on to consumers.
“Price increases should be confined by competition,” Dahlquist said. “The market should decide what price increases will be.”
Dahlquist said internal Google documents show that the company, unencumbered by any real competition, began tweaking its advertising algorithms to sometimes give users worse search ad results if it would boost revenue.
Google lawyer Schmidtlein said the data shows that search ads have become more effective and useful to consumers over time, with click-through rates increasing from 10% to 30%.
Mehta has not yet said when he will rule, although it is expected that it could take several months.
If it finds that Google has violated the law, it will schedule a “remedial” phase of the process to determine what needs to be done to boost competition in the search engine market. The government has not yet said what type of remedy it will seek.
