Verdict remains uncertain as Google rests defense in landmark monopoly trial.
On Tuesday, Google ended two and a half weeks of defending its search business against the Department of Justice’s monopoly claims, reportedly with a whimper.
During the DOJ’s cross-examination of Google’s final witness, Kevin Murphy, the economist got “upset” when the DOJ introduced a 2011 email from an ex-Google executive, Chris Barton, which suggested that Google’s default search agreements with wireless carriers, mobile device manufacturers, and browser partners had to be “exclusive,” Big Tech on Trial reported, or else they were worthless.
“Without the exclusivity, we are not getting anything,” Barton’s email said. “Without an exclusive search deal, a large carrier can and will ship alternatives to Google.”
Google had argued that these deals are not exclusive but are reasonable contracts that Google has competed fairly for and repeatedly won by making the best search engine available, Big Tech on Trial reported.
Murphy’s testimony was supposed to shore up this part of Google’s defense, but as Google’s defense wound down, the DOJ appeared intent to remind Judge Amit Mehta that evidence allegedly showed that these default deals were the key to maintaining Google’s alleged illegal monopolies in search and advertising. By the time the DOJ began their line of questioning, Murphy was likely already eager to get out of the hot seat.
Big Tech on Trial reporter Lee Hepner—who also serves as antitrust legal counsel for the nonprofit the American Economic Liberties Project—posted on X (formerly Twitter) to summarize Murphy’s testimony as arguing, “Google’s Search monopoly is good for you, consumer choice is ‘irrational,’ and privacy is bad quality.”
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On the day prior, Murphy potentially bolstered the DOJ’s case by accidentally leaking a key figure that both Google and Apple had specifically requested remain confidential—confirming that Apple gets a 36 percent cut of search ad revenue from its Safari deal with Google.
Google seemingly sought to redact this information from Murphy’s trial transcript, but Mehta “ruled against redacting transcripts of inadvertently disclosed information (presumably the 36 percent Google-Apple revenue share figure) finding a lack of competitive harm,” Big Tech on Trial reported. Meanwhile, Google CEO Sundar Pichai, during Google’s other monopoly trial, confirmed on Tuesday that the 36 percent figure that Murphy shared was accurate, Bloomberg reported.Advertisement
Although it’s still unclear exactly how much money Apple gets from its default deal with Google, it’s obvious that the default placements in Safari are extremely valuable to Google. Experts estimated that with such significant revenue-sharing, the Safari deal is potentially worth tens of billions of dollars to Apple, on top of the $18 billion that Google pays annually just to keep the deal in place.
In the coming days, the DOJ will present its rebuttal to Google’s arguments.
Mehta is expected to rule next year “after both sides summarize their cases in writing and deliver closing arguments,” The New York Times reported. It’s currently hard to tell which way the judge is leaning. Big Tech on Trial reporter Yosef Weitzman wrote that the judge has kept his “cards close to his chest” throughout the trial.
Mehta will have to resolve complex legal questions in the case and parse conflicting expert analyses, Weitzman said, to confidently decide if Google’s business model is helping or harming consumers. While many have reported that the risk of Mehta ruling against Google could be a breakup of Google’s search business that could shake up the way the Internet works for nearly everyone around the world, Weitzman also pointed out that Google would likely appeal an unfavorable verdict, possibly sending the case to the Supreme Court.
The DOJ hopes that Mehta will conclude that Google is paying tens of billions not just to drive traffic to its search engine and boost search ad revenue but also to lock out rivals who can’t possibly compete without winning those default placements.
And Google is hoping that Mehta will land on its side, perhaps most crucially agreeing that Google pays Apple so much for the Safari deal because, as Pichai testified earlier in this monopoly trial, Google users depend on its search engine to get the best results, and Google feared that Apple may have degraded their experience in Safari without the deal, The Times reported. Rather than strong-arming Apple into an allegedly exclusive deal just to stop rivals from competing, Pichai testified that for Google, “there was a lot of uncertainty about what would happen if the deal didn’t exist.”
Google’s top rivals cannot compete for default deals
During its defense, Google called a dozen witnesses in its efforts to disprove a mountain of DOJ evidence allegedly showing that Google abuses its dominance in search and instead convince Mehta that its search business—including payments of $26 billion total annually for default deals—is entirely legitimate.
To win over Mehta, Google argued that general search rivals had failed to compete for default placements because the search engines were inferior, pointing to Mozilla’s failed experiment setting Yahoo as a default search engine in Firefox as proof. The search giant also argued that general search rivals like Microsoft failed to invest in search the way that Google had and failed to have Google’s foresight to recognize how important mobile search would become. In 2022, Google invested $40 billion in research and development, dedicating 8,000 engineers and product managers to improving its search engine, the Times reported.
Further, Google’s lawyers insisted that the DOJ’s attempt to limit Google’s rivals to other general search engines was too constricting because Google competes query by query with various platforms, including Amazon and Expedia. Those platforms have a competitive edge over Google, the tech company argued, because users can complete transactions within their platforms after searching.
But Amazon and Expedia will never compete directly with Google for default placements in browsers and on mobile devices, and Mehta has said that the “heart” of the DOJ’s case is showing that Google’s default agreement with Apple ensured that Google could illegally maintain a monopoly on general search as a defined market. According to Big Tech on Trial, while Google has argued that it doesn’t have monopoly power in any defined markets, the DOJ has argued that the fact that platforms considered Google’s chief competition can never compete for default deals is “proof that general search is a properly defined antitrust market.”
Google has argued that, of course, default deals have value, but they’re not everything. If default deals gave search engines so much power, Google argued, Google searches would rarely happen on Windows devices where Bing is the default search engine. But even on its own devices, Microsoft struggles to stop users from switching to Google as their preferred search engine. Why? Because Google is simply the best, Google argued.Advertisement
Google defends search business as fueling innovation
Google has portrayed its search business as a critical disruptor since its inception. The tech company rolled out its search engine in 1998 and competed on its merits with early search leaders like Yahoo or AskJeeves to become the world’s favorite search engine. A decade later, Google introduced its browser Chrome, pulling users away from Microsoft’s Internet Explorer by rapidly updating its services to keep up with users’ preferences. That same year, Google introduced the Android operating system, giving Apple’s iPhone a run for its money where it previously faced little competition.
These innovations, Google argued, established Google as a leader recognized for continually investing in tech that pushed the entire tech industry forward in efforts to keep up, the Times reported. Without Google in the market, browsers and smartphones wouldn’t be updated as frequently, Google argued.
Beyond Google serving as a competitive force fueling innovation, Google also argued that its default deals spurred innovation. Wireless carriers, mobile device makers, and browser operators partnering with Google suddenly had an influx of funding from revenue-sharing to fuel their own innovations. Consumers benefited from these allegedly pro-competitive effects of Google’s search business model, Google argued.
The DOJ does not see eye to eye with Google regarding these alleged consumer benefits, though. To the contrary, the DOJ argued that Google has consistently chosen profits over product improvements that would seemingly benefit consumers. One powerful example came from 2019 when Google considered creating an incognito search engine that would’ve safeguarded user privacy by storing no user data whatsoever. The DOJ said that Google ultimately rejected the plan because it would’ve lost “billions in revenue,” the Times reported, depriving users of more privacy when searching the web.
More recently, Google seemingly delayed updating its search tool with generative AI features until OpenAI released ChatGPT last year. The DOJ has argued that this shows that Google only innovates when it faces competition, something that rarely happens because of Google’s alleged search dominance. If there were healthier competition, the DOJ has claimed, Google would face pressure to put out more consumer-friendly products, perhaps offering even better search results at a time when users frequently complain that Google search quality is deteriorating.
