Google trial ends as judge weighs US antitrust claims

Google trial ends as judge weighs US antitrust claims

Google and the US Department of Justice concluded closing arguments on Friday over claims that the Alphabet unit has unlawfully dominated web search and related advertising, which the government believes could shape the “future of the internet.”

US District Judge Amit Mehta in Washington spent hours questioning both sides, investigating whether competitive platforms like ByteDance’s TikTok and Facebook and Instagram Meta are competitive substitutes for search advertising dollars.

Mehta said the main issue is the platform’s “surrogate ability” for advertisers, which must be resolved by the court. He will now begin preparing to make a big decision on whether Google’s conduct violated civil antitrust laws. He did not say when he would rule, but experts say he could potentially direct changes to Google’s business practices.

Mehta also questioned whether Google evaluates competitors’ prices before making its own adjustments. Google’s advertising business is responsible for about three-quarters of its revenue.

US government attorney David Dahlquist argued that “advertising revenue is what drives Google’s monopoly power today.”

Google has boasted that it doesn’t feel real market pressure, Dahlquist said, arguing that the company isn’t afraid to raise its prices or not improve its products.

“Only a monopolist can make a product worse and still make more money,” Dahlquist argued.

Google lawyer John Schmidtlein denied that Google’s share of US digital advertising revenue has been steadily declining. He touted the advertising power of rival platforms TikTok ByteDance, Facebook and Instagram Meta, and Amazon.

Schmidtlein argued that Google is “constrained” by rival platforms “where the eyeballs are,” because advertisers know there are overlapping audiences and can spend their money elsewhere.

He also pointed out that Google is constantly moving to innovate its search advertising product. “If Google is a monopolist, why improve anything? Why not just raise the price?” he told the court. He then argued that “Google has won with a superior product.”

The Justice Department struck down Google in a trial that began on September 12, arguing that the search engine giant was a monopoly that illegally abused its power to increase profits.

Witnesses from Verizon, Android maker Samsung Electronics and Google itself testified about the company’s annual payments – $26.3 billion in 2021 – to keep search the default on smartphones and browsers, and to maintain its dominant market share.

Mehta also accepted the government’s claim that Google intentionally destroyed internal documents related to the issues in the lawsuit.

The government asked Mehta to consider that Google deletes chats that are unfavorable to the company.

Mehta has repeatedly questioned Google’s previous policy, which he says leaves document retention decisions up to its employees.

“It should be preserved. Should there be some consequences that are at least far from best practice?” asked the judge.

A lawyer for Google, Colette Connor, defended its data retention practices, calling them reasonable and urging the court not to sanction the company.

The case, filed by former President Donald Trump’s administration, is the first of several aimed at curbing the tech leader’s market power.

Another case, against Facebook parent Meta, was also filed during the Trump administration. President Joe Biden’s antitrust enforcement has followed with a second case against Google and cases against Amazon.com and Apple Inc.