What Google has argued to defend itself in a landmark antitrust case

Over the past two and a half weeks, Google has called a dozen witnesses to defend itself against claims by the Justice Department and a group of attorneys general that Google illegally maintained a search and advertising monopoly, in a landmark antitrust case that could threaten the tech sector. can reform. current.

Google’s lawyers will conclude their arguments in the case – US et al. v. Google – on Tuesday, followed by a government rebuttal. Judge Amit P. Mehta of the U.S. District Court for the District of Columbia, who is presiding over the non-jury trial, is expected to issue a ruling next year after both sides summarize their cases in writing and deliver closing arguments.

The company’s main defense focused on how its actions were justified and how it helped consumers and the competition. These are Google’s main arguments.

How Google’s actions were justified

It paid Apple an appropriate (and undisclosed) amount

The core of the US case against Google is that the company paid Apple and other technology platforms to make itself the default search engine on the iPhone and other devices, preventing rivals from competing and preventing Apple from potentially developing its own search product.

But on the witness stand, Google CEO Sundar Pichai said there was “value” in being the default search engine on a device, describing the agreements with other companies as sound business decisions.

Google paid $26.3 billion to make its search engine the default selection on mobile and desktop browsers in 2021, according to the company’s internal data presented during the trial. The largest share of that, about $18 billion, went to Apple, The New York Times reports. Kevin Murphy, a Google economics expert, testified Monday that Google shared 36 percent of search revenue from the standard deal with Apple.

Mr. Pichai testified that he repeatedly renewed the search engine agreement with Apple because it was working well, which led to an increase in search usage and revenue and benefited Apple, Google and its shareholders. He said Google paid Apple so much to protect users’ search experience on iPhones, without knowing whether Apple would worsen that experience if Google had not improved the financial terms of the deal.

“There was a lot of uncertainty about what would happen if the deal didn’t exist,” he said.

Google isn’t the only search game in town

To counter the idea that other search engines were too small to compete for default status in browsers, Google’s lawyers argued at trial that rivals could have won contracts but could not keep them because of the poor quality of their products.

They cited an example from 2014 when Mozilla, which makes the Firefox browser, left a standard search partnership with Google and selected Yahoo.

The choice was unpopular with users and disastrous for the Firefox browser, Mozilla CEO Mitchell Baker said in a statement played during the trial. Yahoo’s user experience was deteriorating and becoming overloaded with ads, she said, and it was “heartbreaking” to send users to Yahoo. Mozilla returned to Google in 2017.

Government lawyers pointed to Google’s more than 90 percent search market share as evidence that the company’s actions stifled meaningful competition. But Google’s lawyers said search market share was only part of the story as the company broadly competed with more players, including TikTok and Amazon, where consumers search for information online.

The government also accused Google of abusing its position in the online advertising market. Google again tried to widen its opening during the lawsuit, saying it was competing for ad spending that could otherwise have gone to any company from Expedia to Meta, which owns Facebook and Instagram.

How Google helped people and promoted competition

It has invested more than its search rivals in making its product great

One of Google’s arguments was that its focus and investments in searches did not harm consumers and others, as the government has tried to argue, but actually provided benefits.

More than once, Google referred to the amounts it spent on research and development. Last year the amount was about $40 billion. Prabhakar Raghavan, head of Google Search, testified that such investments have helped the company deliver the best technology to users.

“It would be foolish of us not to put our best foot forward,” he said. That was why Google employed 8,000 engineers and product managers for its search engine, including about 1,000 people focused on quality, he added.

Google argued that its rivals had not invested in the same way. When he questioned Microsoft CEO Satya Nadella earlier in the trial, a Google lawyer asked him whether Microsoft was still spending fewer employees on its search engine, Bing, than Google did on its search product. Mr. Nadella avoided specifics of Microsoft’s workforce, saying the company was investing mainly in core areas of its search business.

The innovations have helped consumers around the world

Google said it had set the pace for technological progress. It said it had updated its Chrome browser every six weeks, more often than Microsoft has traditionally updated its browser, Internet Explorer. It introduced Android features that forced Apple to respond, resulting in more apps and other smartphone features, Mr. Pichai testified at the trial.

During cross-examination, Justice Department lawyers tried to make the case that Google could have offered users more innovation but did not do so to safeguard its monopoly. They pointed to a 2019 proposal from Google to create an incognito search engine, which would not have stored any data about users but could have lost the company billions in revenue. Google has decided not to build the browser.

Justice Department attorneys sought to highlight Google’s delay in offering generative artificial intelligence to users, sitting on the technology until OpenAI released ChatGPT last November. It was part of a broader argument by the government that Google had not sufficiently improved its products for consumers until it felt competitive pressure.

The government has also accused Google of using its power in search and advertising to raise ad prices when the company faces a revenue crisis. The company’s employees stated that it balanced its commitment to revenue from each ad with ensuring that users generally saw high-quality ads in search results.

Its actions were, on balance, competitive and not anti-competitive

The Justice Department argued in the lawsuit that Google’s actions harmed competition and denied benefits to consumers. If the government proves that harm exists, the onus is on Google to prove that that harm does not outweigh the competitive benefits created by its actions.

To that end, Google focused the trial on when it introduced its search engine and other products and how entering those markets increased competition.

When Google rolled out its search engine in 1998, it was in a search market ruled by Yahoo, AltaVista and Ask Jeeves, the company argued. The Chrome browser, which debuted in 2008, disrupted a browser market where Microsoft’s Internet Explorer dominated, Google said. And it increased competition against Apple’s iPhone with its Android operating system, which it introduced in 2008, the company said.

Cecilia Kang reporting contributed.