Google will confront a threat to its dominant search engine beginning Tuesday when federal regulators launch an attempt to dismantle its internet empire in the biggest U.S. antitrust trial in a quarter century.
Over the next 10 weeks, federal lawyers and state attorneys general will try to prove Google rigged the market in its favour, in violation of the Sherman Act, by locking its search engine in as the default choice in a plethora of places and devices.
U.S. District Judge Amit Mehta likely won’t issue a ruling until early next year. If he decides Google broke the law, another trial will decide what steps should be taken to rein in the Mountain View, Calif.-based company.
Top executives at Google and its corporate parent Alphabet Inc., as well as those from other powerful technology companies, are expected to testify. Among them is likely to be Alphabet CEO Sundar Pichai, who succeeded Google co-founder Larry Page four years ago. Court documents also suggest that Eddy Cue, a high ranking Apple executive, might be called to the stand.
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The Justice Department filed its antitrust lawsuit against Google nearly three years ago during the Trump administration, charging that the company has used its internet search dominance to gain an unfair advantage against competitors. Government lawyers allege that Google protects its franchise through a form of payola, shelling out billions of dollars annually to be the default search engine on the iPhone and on web browsers such as Apple’s Safari and Mozilla’s Firefox.
Regulators also charge that Google has illegally rigged the market in its favour by requiring its search engine to be bundled with its Android software for smartphones if the device manufacturers want full access to the Android app store.
Although Google products such as the Chrome web browser, Gmail, YouTube and online maps all are hugely popular, none have become as indispensable — or as valuable — as the internet search engine invented by Page and a fellow Stanford University graduate student, Sergey Brin, during the late 1990s.
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Google counters that it faces a wide range of competition despite commanding about 90 per cent of the internet search market. Its rivals, Google argues, range from search engines such as 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 perspective, perpetual improvements to its search engine explain why people almost reflexively keep coming back to it, a habit that long ago made “Googling” synonymous with looking things up on the internet.
Today, Google’s corporate parent, Alphabet, is worth $1.7 trillion US and employs 182,000 people, with most of the money coming from $224 billion in annual ad sales flowing through a network of digital services anchored by a search engine that fields billions of queries a day.
The Justice Department’s antitrust case echoes the one it filed against Microsoft in 1998. Regulators then accused Microsoft of forcing computer makers that relied on its dominant Windows operating system to also feature Microsoft’s Internet Explorer — just as the internet was starting to go mainstream. That bundling practice crushed competition from the once-popular browser Netscape.
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Google could be hobbled if the trial ends in concessions that undercut its power. One possibility is that the company could be forced to stop paying Apple and other companies to make Google the default search engine on smartphones and computers.
Or the legal battle could cause Google to lose focus. That’s what happened to Microsoft after its antitrust showdown with the Justice Department. Distracted, the software giant struggled to adapt to the impact of internet search and smartphones. Google capitalized on that distraction to leap from its startup roots into an imposing powerhouse.
In late April, a U.S. judge in Virginia denied Google’s motion to dismiss a separate Justice Department antitrust case focused on advertising technology. The government alleges that Google monopolizes key digital advertising technologies, collectively referred to as the “ad tech stack,” which publishers depend on to sell ads and advertisers rely on to reach potential customers.
The government has argued that Google should be forced to sell its ad manager suite. Google has also denied any wrongdoing in that case.
Meanwhile, European Union regulators in June said Google may have to sell part of its lucrative adtech business to address concerns about anti-competitive practices, after a two-year nvestigation into behaviours such as favouring its own advertising services.