US prosecutors begin landmark antitrust trial against Google

Google is under fire from Attorneys-general in 38 states for allegedly using unfair business practices to maintain a search-traffic monopoly.

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On Tuesday, US prosecutors initiated a landmark antitrust trial against Google, making allegations that the company deliberately suppressed competition challenging its extensive search engine dominance. The tech giant was accused of operating an illegal monopoly through billions of dollars in expenditures, causing harm to all computer and mobile device users in the United States.

During the trial’s opening statements before a federal judge in Washington, Justice Department attorneys claimed that Google’s exclusive contracts with wireless carriers and phone manufacturers played a crucial role in solidifying its dominant position, thereby violating US antitrust laws.

This Google case has been described as one of the most significant antitrust trials in the US since the government’s action against Microsoft in the 1990s, with similar arguments centred around the bundling of multiple proprietary products. Google CEO, Sundar Pichai, is expected to testify during the multi-week trial, as well as senior executives or former employees from Apple, Microsoft, Samsung and Google.

According to DOJ lawyer Kenneth Dintzer, the repercussions of Google’s alleged misconduct are substantial. He stated, “This case pertains to the future of the internet and whether Google’s search engine will ever face legitimate competition.” Dintzer added that Google pays over $10 billion annually to companies like Apple to ensure that its search engine remains the default or sole option on mobile devices and browsers for millions of people.

In 2022, Google’s search division contributed to over 50% of the $283 billion in revenue and $76 billion in net income reported by its parent company, Alphabet. This substantial revenue stream has been instrumental in driving Alphabet’s market capitalization to surpass $1.7 trillion.

Dintzer emphasized, “This cycle has been ongoing for 12 years, always favouring Google. It ultimately impacts what consumers see in search results and hinders new competitors from gaining a foothold.”

In Google’s opening statement, attorney John Schmidtlein argued that Apple’s decision to select Google as the default search engine in its Safari browser demonstrates that consumers prefer Google’s search engine as the superior product.

Google has previously maintained that consumers choose its search engine because of its superiority, rather than due to anticompetitive practices. However, DOJ prosecutors asserted that they would present evidence showing that Google knew its actions were illegal and engaged in hiding and destroying documents to conceal antitrust violations.

This trial could serve as an indicator of the Biden administration’s more assertive antitrust agenda. While the lawsuit was initially filed, US antitrust officials did not rule out the possibility of breaking up Google, expressing concerns about the company’s behaviour potentially hindering future innovation or the emergence of a Google competitor.

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