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Business News/ News / World/  Google Antitrust Trial: Google pays $10 billion every year to maintain monopoly, says US

Google Antitrust Trial: Google pays $10 billion every year to maintain monopoly, says US

Google pays over $10 billion a year to be the default search engine on web browsers and mobile devices, stifling competition, the US Justice Department has alleged

US Justice Department alleged US of paying $10 billion a year to maintain dominance over competitorsPremium
US Justice Department alleged US of paying $10 billion a year to maintain dominance over competitors

Alphabet Inc.'s Google spends around more than $10 billion a year to maintain its position as the default search engine on web browsers and mobile devices, said US Justice department during the antitrust trial, that began in Washington on Tuesday.

“This case is about the future of the internet and whether Google’s search engine will ever face meaningful competition," Kenneth Dintzer, a government lawyer, said in his opening statement. “The evidence will show they demanded default exclusivity to block rivals."

Also Read: Google Pixel 8 and Pixel 8 Pro could arrive in India on THIS date. What to expect

The government lawer accused Google of abusing its monopoly in general search. Dintzer said that Google became a monopoly by at least 2010. Now it controls around more than 89% of the online search market. “The company pays billions for defaults because they are uniquely powerful," he said.

The monopolisation trial of the Google is one of the biggest trial of the federal government against a US firm. The justice department and 52 attorneys general from states and US territories alleged Google of illegally maintaining its dominance by paying billions to tech rivals, smartphones makers and wireless providers. In exchange to the payment, Google was set as the preselected option or default search engine on mobile phones and web browsers.

Also Read: Google pilots India version of search powered by generative AI

In response, Google's attorney, John Schmidtlein, said that the US was wrong to mention that the company broke antitrust law to maintain its dominance. He countered US Federal government's claim by saying that the search engine was wildly popular because of its quality and that dissatisfied consumers can switch with “a few easy clicks."

Also Read: Google Chrome celebrates 15th anniversary with stunning visual overhaul and new features

"Users today have more search options and more ways to access information online than ever before," said Schmidtlein, saying that Google won competitions that Apple and Mozilla held to pick best search engines.

He also mentioned that unhappy customers are just “a few clicks away" to replace Google app from their devices or opt for Microsoft's Bing, Yahoo or DuckDuckGo.

Also read: Government has a warning for Google Chrome users: Details inside

All about the US vs Google trial

The first phase of the trial will asses whether Google has illegally dominated the online search market or not. The case is being heard by a US District Judge Amit Mehta. The decision on the case is expected to be announced next year on whether Google broke the law or not.

-In case of the victory of the Justice department, it may seek remedies at the second phase of the trial to break off Alphabet’s search business from other products, like Android and Google Maps, which would mark the biggest forced breakup of a US company since AT&T was dismantled in 1984.

-US Federal government lawyer, Dintzer, accused Google of ‘weaponising’ the use of default agreements to discourage rivals and also exercised its market power by blocking Apple Inc. from pursuing options that were better than Google as default browser on its computers, phones and other devices.

-Google and Apple have tied up since 2002. At that time, Apple licensed Google for use in its Safari search engine for the first time. At that time the contract didn't require any financial transaction, nor there was any exclusivity, said Dintzer.

- In 2007, Apple wanted to offer a choice screen that would have allowed users to pick between Google and Yahoo, according to Dintzer. But Google responded via email, “No default placement, no revenue share," he said. “This is a monopolist flexing," Dintzer said, adding that Apple had no choice but to cave to Google.

-By 2020, Google was paying between $4 billion and $7 billion to Apple for the default on Safari. In addition to this, Google pays more than $1 billion to wireless carriers to remain a default search engine on Android smartphones. For this companies used to sign agreements that protect Google from rivals, Dintzer said.

-Monopoly of Google in the search engine market, led to a significant rise in its ad revenue, claimed William Cavanaugh, a lawyer with Patterson Belknap Webb & Tyler LLP who is representing the states in the case. This led to a rise in prices for online ads.

-Till now, Google has faced a number of probes related to the same matter overseas. This included three EU cases as well. Under those cases, Google faced more than €8 billion ($8.6 billion) in fines, for abuses of dominance on its mobile operating system, its search business and its display advertising operations.

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Published: 12 Sep 2023, 10:48 PM IST
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