Microsoft has invested more than $100 billion developing its Bing search engine over the past two decades, but has little market share to show for it. About nine in 10 web searches in the United States are conducted through Google, and Bing splits the remaining queries with a long list of smaller competitors.
On Thursday, the US government asked a federal judge in Washington, DC, to rule that Google maintains that lead illegally by unfairly manipulating users to keep Microsoft and other competitors down.
Google’s dominance led the U.S. Department of Justice to sue the company in 2020, alleging that it had violated antitrust law by using exclusionary contracts to maintain a monopoly. The two sides began a secret trial late last year before a nearly five-month pause for US Judge Amit Mehta to digest the evidence.
Mehta heard closing arguments Thursday, with government lawyers arguing that without his intervention Google’s dominance would endure for years to come, despite nascent threats from artificial intelligence chatbots like ChatGPT. “The search engine industry has been immune to the entry of any competitor,” said attorney Kenneth Dintzer.
The case is the first to go to trial in a handful of lawsuits the government has filed against the largest technology companies since it stepped up antitrust scrutiny of the industry in 2019 under then-President Donald Trump. The Biden administration has not slowed down.
A central element of the government’s case against Google is the more than $20 billion It says Google pays Apple annually to be the default search engine on iPhones and the Safari browser in much of the world. Google pays more than an additional $1.5 billion a year to wireless service providers and device makers, and more than $150 million to browsers, for similar breaches in the United States, according to the government. Google can afford to pay those sums and still enjoy huge profits because it has cornered the U.S. search and search advertising market, the government alleges.
Google’s lawyers counter that companies like Apple default to Google because it offers a better user experience, not just because they get paid. When browsers like Mozilla have opted for alternatives to Google, they have lost users because of the change, the search company argues. “Google legally acquired monopoly power and scale,” attorney John Schmidtlein told Mehta. “Microsoft missed the boat.”
Before Mehta now is the question of whether Google unfairly earned its popularity.
Profit increase
Google’s agreements with Apple date back to 2002, when the Safari developer first gained the option to integrate Google search into the browser, according to court documents. The payments began after Google co-founder Sergey Brin in 2005 floated the idea of sharing a portion of the company’s booming search revenue or “helping Apple in other ways,” Brin wrote, according to court documents.
But in a deal reached that year, Google got something in exchange for paying Apple half of its sales: Google search would have to be the default option in Safari. The requirement has spread to more Apple services in subsequent years, while revenue sharing and related incentive fees have fluctuated.
