Google accused of paying $10 billion to ward off competitors
The US department of justice (DoJ) is alleging that that Google did not play by the rules in its efforts to keep its dominance in online search, paying US$10 billion to ensure that smaller rivals never got traction.
The DoJ accuses Google of paying billions of dollars annually to device makers like Apple, wireless companies like AT&T and browser makers like Mozilla to give Google’s search engine a market share of about 90%.
“This case is about the future of the internet,” DoJ spokesperson Kenneth Dintzer said, arguing that Google began in 2010 to illegally maintain its monopoly.
Further, Dintzer said Google manipulated auctions for ads placed on the internet in order to raise prices for advertisers.
“Defaults are powerful, scale matters and Google illegally maintained a monopoly for more than a decade,” said Dintzer. The consequences are that without serious competition, Google innovated less and paid less attention to other concerns like privacy, he said.
Dintzer also said the department found evidence that Google had taken steps to protect communications about the payments it made to companies like Apple. “They knew these agreements crossed antitrust lines,” he said.
He showed a chat where Google CEO Sundar Pichai asked for the history of a certain chat to be turned off.
Google’s defence is simple: it argues that its overwhelmingly high market share is not because it broke the law, but because it is a fast, effective search engine. It is also free.
Google alternatives
Consumers, Google’s lawyers will argue, can delete the Google app from their devices or simply type Microsoft’s Bing, Yahoo or DuckDuckGo into a browser to use an alternative search engine. They will argue that consumers stick with Google because they rely on it to answer questions and are not disappointed.
Opening arguments in the trial occurred before a packed federal court in Washington, DC. The trial is expected to last up to 10 weeks, with two phases. In the first, judge Amit Mehta will decide if Google has broken antitrust law in how it manages search and search advertising.
If Google is found to have broken the law, Mehta will then decide how best to resolve it. He may decide simply to order Google to stop practices he has found to be illegal or he may order Google to sell assets.
The government, in its complaint, asked for “structural relief as needed” but did not define it.
The legal fight has huge implications for Big Tech, which has been accused of buying or strangling small competitors but has insulated itself against many accusations of breaking antitrust law because the services the companies provide to users are free, as in the case of Google, or inexpensive, as in the case of Amazon.com.
Previous major antitrust trials include Microsoft, filed in 1998, and AT&T, filed in 1974. The AT&T breakup in 1982 is credited with paving the way for the modern cellphone industry, while the fight with Microsoft is credited with opening space for Google and others on the internet.
