Google will fight government allegations today that it stifled Internet competition by creating an online monopoly in court – in what will be one of the largest antitrust trials in recent memory.
Already underway, the proceedings began with oral arguments from both sides at 9:30 a.m. – with the Department of Justice being the other principle.
Officials will argue that the tech giant abused its dominance in online search by striking deals with cell phone carriers and smartphone makers that made their search engine the first thing people did. users see when they turn on their phone and browser.
The government claims that Google knowingly participated in this practice in an effort to crush competition, while Google counters that it faces a wide range of competition despite controlling about 90% of the Internet search market. .
The Justice Department’s case hinges on allegations that Google illegally orchestrated these business transactions, thereby rigging the market. This is the first case of major government monopoly in a quarter century and the first in the modern Internet era.
Google will fight government allegations that it stifled Internet competition by creating an online monopoly in court today – it will be one of the biggest antitrust trials in recent memory.
“This lawsuit strikes at the heart of Google’s hold on the Internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an illegal monopolist,” former Attorney General William Barr said at the case first filed in October 2020.
His deputy, Jeffrey A. Rosen, cited previous antitrust cases, such as the 1998 case against Microsoft, that centered on claims that the company illegally bundled its products in ways that stifled competition and forced people to use them.
He also discussed what was billed as the Ali-Frazier of last century’s telecommunications fights, when the U.S. Justice Department clashed with AT&T in 1974 and split the former American Telephone & Telegraph into a new, seven regional offices. operating companies (RBOC) – and the new, much smaller AT&T.
“As in its historic antitrust actions against AT&T in 1974 and Microsoft in 1998, the Department is once again applying the Sherman Act to restore the role of competition and open the door to the next wave of innovation,” he told the then vice-president AG. .
“This time, in vital digital markets.”
Aside from the historical significance of these lawsuits, they set a somewhat dubious legal precedent for the Silicon Valley research company.
In the case involving Microsoft – where officials claimed the then-high-flying company illegally maintained its monopoly on the PC market by imposing legal and technical restrictions on manufacturers and users to uninstall Internet Explorer – the judge ruled in favor of the Ministry of Justice.
It is a historic decision: Judge Colleen Kollar-Kotelly declared that Microsoft – by not allowing its users to use competing applications such as Java or Netscape – had violated antitrust laws and had “one hand oppressive on the scale of competitive fortune.”
Now, more than two decades later, the similarities to the case and to the new case against Google are strikingly similar — and lawyers hired by the government expect a similar outcome.
Google’s headquarters is pictured in Mountain View, California. The company faces allegations that it entered into relationships with mobile carriers and phone makers that unfairly made their search engine the first thing users see when they turn on their devices or open their web browser.
“This case was about a monopolistic technology platform and the government won,” Rebecca Haw Allensworth, a professor at Vanderbilt Law School, told NPR Tuesday morning, hours before Judge Amit Mehta called the Justice Department attorney Kenneth Dintzer to make his opening statement.
“And so, everyone looked at this as sort of a model for how we could enforce laws against today’s tech giants,” added the professor who specializes in antitrust law.
“This is a real test of whether this theory works or not.”
Several members of the Justice Department team in the Google case — including Dintzer, the Justice Department’s lead litigator — also worked on the Microsoft investigation.
The lawsuit comes just weeks after the 25th anniversary of the company’s first investment: a $100,000 check from Sun Microsystems’ Andy Bechtolsheim that put backers Larry Page and Sergey Brin into a garage of Silicon Valley.
Today, Google’s parent company, Alphabet, is worth $1.7 trillion and employs 182,000 people, with most of the money coming from $224 billion in annual ad sales flowing through a network of services rooted in which is by far the most popular search engine in the world.
Google says it faces broad competition from engines like Bing, although it controls about 90% of the Internet search market.
Google could be hampered if the trial ends with concessions that undermine its power. One possibility is that the company will 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. This is what happened to Microsoft after its antitrust showdown with the Justice Department.
Distracted, the software giant has struggled to adapt to the impact of Internet search and smartphones. Google took advantage of this distraction to move from its startup roots to a towering powerhouse.