Google parent Alphabet Inc will be taking on the US Justice Department and a coalition of state attorneys general in what is being seen as the biggest antitrust trial in America. Starting Tuesday (September 9), the tech giant will battle the US governmental agencies in a blockbuster trial that alleges that Alphabet’s Google unlawfully abused its dominance in the search-engine market to maintain its monopoly.
Here’s all you need to know about the marathon battle.
What the trial is all about
The US and its state allies contend that Google has unfairly forged its position as the world’s pre-eminent search engine.
They allege that Google’s domination of online search is a result of exclusivity contracts the tech titan signed with device makers, mobile operators and other companies. These contracts allegedly involved making Google the default search engine on most phones and web browsers.
Filed in 2020, the lawsuit alleges that such contracts were intended to be “exclusionary” by Google and that they left rivals no chance to compete with the search engine, enabling its position as the search market king.
It also alleges that such contracts have resulted in less choice for consumers and also less innovation.
This, in turn, helped Google parent firm Alphabet to be one of the richest companies on the planet. As per government estimates, Google has grabbed a 90 per cent of the market share in search in recent years.
Ad revenue from Google accounts for nearly 60 per cent of the income generated by Google parent Alphabet.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy start-up with an innovative way to search the emerging internet,” said the Justice Department in its lawsuit. “That Google is long gone.”
The lawsuit also argues that Google illegally down-ranked sites such as Yelp and Expedia. These allegations were tossed out pre-trial by the presiding judge.
What Google has to say in its defence
Google denies these allegations and maintains that it did not violate the US antitrust law. In a court filing in January, Google said its browser agreements were “legitimate competition” and not “illicit exclusion.”
It said these arguments did not prevent Google rival firms from developing their own rival search engines.
Google also said that the contracts did not stop rival companies like Mozilla and Apple from promoting their search engines.
The tech giant further claimed in its court filing that the phone and web browsers make Google search the default search engine to provide their customers the “highest quality” experience.
It also said that users can easily switch search engines if they don’t want to use Google.
In a blog post, as reported by AFP, Kent Walker, Google president of global affairs, said: “In sum, people don’t use Google because they have to — they use it because they want to.”
As per Reuters, it is not illegal for a business to enter into exclusive arrangements with specific customers. In fact, such deals are a common business practice, and they rarely raise concerns or regulatory scrutiny, especially when a company lacks significant market power that could substantially affect competition.
However, exclusive deals can become illegal under antitrust laws if a company is considered having significant market power and uses these exclusive arrangements to prevent competitors from entering the market.
In such cases, the company must demonstrate that any restrictions on competition result are beneficial to its consumers.
The US antitrust law places the burden of proof in the upcoming trial on the Justice Department. It will have to prove that Google’s business deals have harmed competition.
After that, Google will have the opportunity to argue at the non-jury trial that these deals actually benefit consumers. In other words, they may argue that the positive impact on consumers outweighs any negative effects on competition.
How long will the trial last?
Over a period of roughly 10 weeks, Judge Amit P Mehta will hear more than 100 witness testimonies and decide whether the case brought by the US Department of Justice has any merit or not.
His ruling, as per AFP, is expected “many months” after the roughly three months of expected hearings.
As per the news agency, whether Judge Mehta rules on Google’s favour or the DoJ’s, the ruling will certainly be appealed, so the case may drag on for years.
What happens to Google if it loses?
Google will not face a mere monetary penalty. Instead, the US DoJ and its state allies are seeking an injunction barring Google for continuing the alleged “exclusionary” anticompetitive practices.
If it loses, the tech giant faces serious business implications. The government’s lawsuit suggests that the court could consider breaking up the company as a solution to this alleged non-competitive practices.
Furthermore, the Justice Department may argue that its objective is to stop Google from using its alleged search monopoly to enter into additional exclusive agreements in emerging sectors, such as artificial intelligence.
(With inputs from agencies)
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