Google Defends its Search Business in the Largest U.S. Antitrust Case of the Century.

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Google

Today, the US Government begins its prosecution against Google, alleging the digital giant of illicitly keeping a monopoly in search.  The Internet Explorer trial from the 1990s casts a shadow over the proceedings.

Today, a significant antitrust lawsuit, comparable in scale to the Microsoft case of the early 2000s, is commencing.  The federal government, along with a coalition of state attorneys general, is initiating legal proceedings to contest Google’s monopolistic control over the search engine market.

Google has been particularly said to have established a monopoly by means of exclusive agreements with device manufacturers and software providers.  These agreements effectively designate Google as the default search engine for a certain device or platform.  According to the government’s case, the various agreements have had an overall impact of unfairly restricting access to the search engine market for competitors, establishing a de facto monopoly.

The complaint, filed in October 2020 at the federal district court in Washington, D.C., additionally contended that the exclusive contracts were employed not just to expand the utilization of Google’s products but also to deliberately prevent competitors from eroding Google’s prevailing market position in search.

According to the government, Google has devised economic models to assess the “defensive value” of preventing search competitors from gaining effective distribution and search access points and ultimately engaging in competition in order to maintain its dominant position.  In summary, Google’s actions resulted in the deprivation of competitors from the critical resources, such as quality reach and financial stability, required to effectively challenge Google’s long-standing monopoly.

What to Expect in the Google Antitrust Case?

According to David Olson, an associate professor at Boston College Law School, in order to substantiate its argument, the Department of Justice (DOJ) is expected to summon witnesses from Google’s competitors, employing a conventional and frequently utilized strategy in antitrust litigation.

According to the speaker, it is probable that they will express dissatisfaction with the initial positioning of Google and the subsequent lock-in effect, which had a significant negative impact on their situation.  Moreover, it should be noted that their negative sentiment towards Google is influenced by their status as competitors.  Therefore, it is advisable to approach their opinions with a degree of skepticism.

The government, meanwhile, possesses additional possible sources of detrimental testimonies against Google.  This includes Google itself, which might have produced internal comments affirming the kind of anticompetitive conduct addressed in the lawsuit.

According to Olson, when instructing students on the subject of antitrust, he emphasizes the significance of directing their attention toward the sales and marketing personnel as the primary source of information.  Sales and marketing professionals have significant challenges in their roles, requiring them to adopt an enthusiastic and motivational approach.  Consequently, they may express statements that could be perceived unfavorably by antitrust lawyers.

According to Olson, it is anticipated that the government will provide internal papers from Google that it will contend to have significant detrimental effects.

What Happens if the Government Wins Against Google?

According to Rebecca Haw Allensworth, an associate dean at Vanderbilt University Law School, it seems unlikely that Google itself will have any significant consequences if the government’s action is successful.

The speaker asserted that the current legal action is aimed at challenging the utilization of these contracts and posited that the appropriate course of action would be to prohibit the implementation of such contractual agreements.  It is doubtful that Google will undergo a division.

The potential consequences of a Department of Justice judgment extend beyond its immediate scope, potentially exerting significant influence on the broader technology sector, with social media businesses being particularly affected.  The focal points of the case revolve around the suitability of antitrust principles in “zero-price” markets, characterized by goods or services that are offered for a price of $0, similar to many social media networks.  A verdict against Google would establish a significant legal precedent.

According to Allensworth, if a situation arises where culpability is at stake, the court would likely determine that a market with zero prices qualifies as a market for antitrust purposes.  This decision would have significant implications for numerous companies, especially those in the social media sector.

Google’s case is expected to mostly focus on the accessibility of alternative search engines, asserting that these alternatives are readily available with just a click.  Additionally, the business is likely to argue that its product surpasses its competitors in terms of quality, hence explaining the relatively small number of consumers who choose to transfer.

Shades of the Microsoft Antitrust Trial

The present case bears a striking resemblance, as observed by numerous commentators, to the Microsoft antitrust action initiated in 1998 and resolved by a settlement with the Department of Justice in 2001.  In this particular scenario, characterized by a turbulent history spanning over a decade, the government levied accusations against Microsoft for engaging in anticompetitive practices.  These practices involved exploiting the dominant position of the Windows operating system in the marketplace to artificially bolster the popularity of its Internet Explorer browser software.  Additionally, Microsoft was accused of systematically undermining the market presence of competing browsers such as Netscape.

Allensworth humorously remarked to his colleagues that they could just employ the “control-F” function to search for “Microsoft” and replace it with “Google.” The concept revolves around the notion of a prominent technological platform that restricts its competitors from achieving economies of scale.

As Search Trial Begins, Advertising Case Looms for Google

In the previous month, Judge Amit Mehta rendered a decision to dismiss certain claims against Google.  These claims pertained to the Android Open Source Project, Internet of Things (IoT) devices, Google Assistant, and several contracts between Google and manufacturers in relation to Android.  However, the remaining claims are anticipated to proceed to trial, with an estimated duration of approximately 10 weeks.  The legal proceedings will be conducted as a bench trial, wherein a judge will preside over the case without the presence of a jury.

Nevertheless, regardless of the outcome in Google’s favor, the company is poised to confront a subsequent legal action pertaining to its advertising technology enterprise.  This particular case is perceived as more intricate and challenging to mount a robust defense against.  The lawsuit, which was filed in the Eastern District of Virginia, alleges that Google has engaged in anticompetitive behavior by leveraging its dominant position in several aspects of the online advertising industry.  This alleged conduct includes the exclusion of competing advertisers, the manipulation of advertising costs, and the subsequent reduction of revenues for news publishers and other providers of online content.  The trial is anticipated to take place in the upcoming year.

About The Author:

Yogesh Naager is a content marketer who specializes in the cybersecurity and B2B space.  Besides writing for the News4Hackers blog, he’s also written for brands including CollegeDunia, Utsav Fashion, and NASSCOM.  Naager entered the field of content in an unusual way.  He began his career as an insurance sales executive, where he developed an interest in simplifying difficult concepts.  He also combines this interest with a love of narrative, which makes him a good writer in the cybersecurity field.  In the bottom line, he frequently writes for Craw Security.

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