US says Google pays $10bn a year to maintain search dominance

US prosecutors alleged that Google pays more than $10 billion (€9 billion) annually for agreements that ensure it is the default search engine on mobile phones and computers, as the most significant antitrust monopoly trial in 25 years got under way in Washington.

“This case is about the future of the internet and whether Google’s search engine will ever face meaningful competition,” Kenneth Dintzer said during the Department of Justice’s (DoJ) opening statements in a case accusing Google of dominating internet search via anticompetitive agreements.

Mr Dintzer said the tech group in 2010 began to “illegally maintain” the monopoly it had established. It represented about 89 per cent of the internet search market, he said.

Google’s opening argument was expected later on Tuesday.

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It is the most high-profile monopoly trial since the DoJ accused Microsoft in the 1990s of seeking to quash then-pioneering web browser Netscape with its Windows dominance.

Almost three decades later, a new generation of progressive officials appointed by the US president Joe Biden – including Jonathan Kanter, the head of the DoJ’s antitrust unit – have vowed to rein in Big Tech. They argue that insufficient legal challenges in recent decades have allowed anticompetitive conduct to proliferate across the US economy.

Mr Kanter, who was in the Washington courtroom on Tuesday as an observer, inherited the Google case from the Trump administration, which first filed it in 2020.

“The case against Google is the largest monopolisation case since Microsoft,” said Sean Sullivan, professor at the University of Iowa College of Law. It could be the kind of landmark trial that produces “judicial opinions that provide new or better ways of understanding and applying antitrust law”, he said.

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The DoJ’s complaint alleged Google sidelined competitors by paying wireless carriers, browser developers and device manufacturers billions of dollars via deals that ensure its search engine features prominently on mobile phones and computers.

Google has argued that it offers a good product that the public chooses to use. It has also said the agreements in question are mainly set by its counterparts, companies such as Apple or Samsung, and that other players can join the bidding process.

“It is not enough for the DoJ to show that Google is very large or that its competitors have struggled to make inroads against it,” Mr Sullivan said. “The government bears the burden of showing that Google has maintained a monopoly position through anticompetitive conduct.”

Witness lists have not yet been set for the bench trial, which is expected to last about 10 weeks, but the DoJ is expected to call on companies involved in Google’s deals. Apple failed to stop three of its top executives from being called to testify, including Eddy Cue, head of its services business. Other tech executives including Google’s chief executive Sundar Pichai are also expected to appear.

The DoJ in January filed a separate antitrust lawsuit against Google for dominance in the digital advertising market, one of multiple cases that antitrust enforcers in the Biden administration have brought in an effort to counter Big Tech. – Copyright The Financial Times Limited 2023