The U.S. Department of Justice told a federal judge today that Google illegally maintains its search monopoly by paying partners billions of dollars each year to Apple, Samsung, and a long list of wireless carriers— AT&T, T-Mobile, and Verizon in the U.S.—to ensure that it is always the default option on devices. News of this accusation was first reported by Bloomberg.
“Google invests billions in defaults, knowing people won’t change them,” DOJ attorney Kenneth Dintzer told Judge Amit Mehta during a hearing in Washington D.C. “They are buying default exclusivity because defaults matter a lot.”
Today’s hearing is the first in the DOJ’s landmark antitrust lawsuit against Google, which dominates the online search market and, thus, the online advertising market as well. And the DOJ isn’t alone: several U.S. state attorneys generals are pursuing similar cases against Google for illegal monopoly maintenance, and Nebraska’s attorney general was among the spectators in court today.
A trial is expected to start sometime in 2023. Today’s hearing allowed both sides to lay out their respective opinions on Google’s dominance in search.
“Default exclusivity allows Google to systemically deny rivals’ data,” Mr. Dintzer added, noting that Google acted as a “gateway” for much of the activity that users engage in online.
Perhaps not surprisingly, Google’s retort in this case is similar to Microsoft’s opinion 20 years ago in its own U.S. antitrust case: sure, it dominates the market today, it admits, but it is also under fire from a growing list of aggressive rivals, in this case, Amazon, Bing, DuckDuckGo, Meta, TikTok, and others.
“You don’t have to go to Google to shop on Amazon,” Google attorney John Schmidtlein told the judge. “You don’t have to go to Google to buy plane tickets on Expedia. The fact that Google doesn’t face the same competition on every query doesn’t mean the company doesn’t face tough competition.”
As for Google’s billion in payments, the online giant would like to know why these deals are problematic now when they were acceptable in the past. (I can answer that: because you are a monopoly.)
“The reason [these companies] partner with Google isn’t because they had to, it’s because they want to,” Mr. Schmidtlein claims. “Google had extraordinary success and was doing something incredibly valuable. Competition on the merits is not unlawful.”