In what is being called the “largest antitrust case in history,” the final stage of the trial has begun. On Friday (May 3), the U.S. District Court heard two days of closing arguments in the year-long case regarding whether tech giant Google has violated federal antitrust laws to maintain its dominant position in online search and advertising.
During the court proceedings, both sides presented closing arguments on whether Google has violated antitrust laws in order to sustain its dominant position in online search and advertising. The government plaintiffs alleged that Google paid companies like Apple billions of dollars to sign agreements that exclude competitors. Google, on the other hand, maintained that consumers use its search engine because “it’s the best,” emphasizing that its dominance is a result of market competition.
The Department of Justice and the coalition of state attorneys general filed the lawsuit in 2020, with the trial starting in September of last year. The focus of the trial was on whether Google has maintained its monopoly position through exclusionary practices or simply because of fair competition leading to its overwhelming size.
The trial has now concluded, and in the coming weeks or months, Judge Amit P. Mehta, who oversees the trial at the U.S. District Court for the District of Columbia, will make a ruling on the case.
The first day of closing arguments focused on “online search services,” where Google holds a 90% market share in the United States. The second day concentrated on “search advertising,” which is Google’s primary source of revenue, accounting for about three-quarters of its income.
In the case where Google is set as the “default setting” for search services on iPhones, the government plaintiffs accused Google of engaging in anti-competitive practices through its contractual methods, labeling Google as a monopolist. The U.S. Department of Justice reiterated that Google eliminated competitors by paying significant sums to have its search engine set as the default on smartphones and other devices.
Previous evidence presented in court revealed that in 2021 alone, Google paid a total of $26.3 billion to American companies like Apple to set Google as the preferred and default option for search on devices like smartphones.
The lawsuit also included an email where Google officials criticized phone manufacturers attempting to adopt services from potential Google competitors, stating that “they have violated our agreement.”
In response, Google argued that paying substantial fees to companies like Apple demonstrated “fierce competition” in selecting search engines and claimed that they became dominant through fair competition without eliminating any competitors.
Google also cited examples from Europe, where despite allowing consumers to choose their own search engine, the majority still claimed they “voluntarily chose Google.”
During Friday’s arguments, the focus was mainly on Google’s advertising business. The plaintiffs argued that Google holds a monopoly in the field of “search advertising” and leverages this dominance to increase its revenue, stating that when advertisers seek customers through search services, they have “no choice” but to use Google’s search advertising.
Google countered by saying that its share of U.S. digital advertising revenue has been steadily declining. They listed threats from competitors such as social media platforms like TikTok and Instagram from ByteDance and Amazon’s digital advertising business to demonstrate that they are not in a monopolistic position.
Judge Mehta stated that a core issue is the platform’s “substitutability” from the perspective of advertisers, and the court must resolve this issue.
Mehta also acknowledged the government plaintiffs’ allegations that Google deliberately destroyed internal documents related to the litigation issues. The plaintiffs also asked the court to infer that Google had deleted chat records unfavorable to the company.
Google had previously argued that the decision to retain documents was left to employees. Mehta questioned this in court, asking whether Google’s practices were far from best practices and whether they should face consequences for it.
Google’s lawyers argued that the company’s data retention practices were reasonable and urged the court not to impose sanctions on the company.
The U.S. government has not revealed what actions it would take against Google if the judge rules in its favor. An analysis in The New York Times on Friday stated that if the judge were to make any unfavorable rulings against Google, they would ultimately need to determine how to rectify its illegal behavior, such as potentially instructing the company to terminate default search engine agreements with companies like Apple.
Regarding whether Google will face a breakup order led by regulatory agencies, former head of the Department of Justice’s antitrust division Bill Baer told The New York Times, “I don’t think the Department of Justice is likely to seek some form of breakup, Google’s future actions are likely to face some restrictions.”
In 1998, the Department of Justice, along with 19 U.S. states and the District of Columbia, filed antitrust charges against Microsoft. The antitrust case concluded in 2001, with Microsoft reaching a settlement with the Department of Justice to avoid being broken up.
To combat the monopolistic actions of U.S. tech giants, former President Donald Trump’s administration filed multiple lawsuits. This case is the first of them. Another case against Facebook’s parent company Meta was also brought during Trump’s presidency. Subsequently, the regulatory agency under current President Biden filed a second lawsuit against Google and brought suits against Amazon and Apple as well.