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Every antitrust trial needs a supply of incriminating internal emails or direct witness testimony to bring the claims of illicit business behaviour to life. Without those headline-grabbing details, regulators usually find themselves falling back on abstract economic theories to prove their case.
So it must have been a relief for US Department of Justice lawyers when the judge overseeing their landmark complaint against Google rebuffed the search company’s attempt to suppress one particular piece of evidence.
In the internal note, a Google executive called search advertising “one of the world’s greatest business models ever created”, before adding that only “illicit businesses (cigarettes or drugs) . . . could rival these economics”.
For a trial that is meant to lay the ground for a wider wave of antitrust actions against Big Tech, there have been few dramatic moments like this to punctuate the proceedings. One reason, according to the justice department, is that Google deliberately took steps to make sure potentially damaging communications were deleted or kept confidential, while also teaching executives early on to avoid using terms such as “dominant” and “market share” when discussing their business. Judge Amit Mehta, who is overseeing the case in a Washington DC courtroom, also agreed to let some potentially damaging testimony be heard behind closed doors.
That has left the focus of the trial on business agreements that Google struck with Apple, mobile phone companies and others to make sure its search service appeared as the default when users turned on their devices. The government argues these deals blocked start-up competitors that might have threatened its dominance in search.
During the trial’s first four weeks, the prosecution has been able to produce little evidence of overt bullying by Google to enforce its allegedly exclusionary plan. When Apple considered giving users of its Safari browser a choice of search defaults, an email from Google warned: “No default — no revenue share.”
Sridhar Ramaswamy, a former top Google executive, claimed to see Google’s influence at work when a telecom company shied away from backing his rival search engine.
This is a far cry from the far more overt strong-arming that Microsoft used to force PC makers to carry its internet browser in the 1990s — the basis of the antitrust case it faced a quarter of a century ago.
When it comes to the distribution deals that Google struck, the DoJ has at least had some compelling financial details to back its case. On the face of it, the company’s willingness to pay more than $10bn to buy pole position provides strong economic incentives to suppress rivals. To get Apple to carry its Bing search engine, Microsoft at one point offered to pay the iPhone maker more than the entire advertising revenue the deal would produce.
Apple executive Eddy Cue claimed in court it was the superiority of Google’s service that had won the day, but one Microsoft witness claimed to have been told the iPhone maker thought Bing was better.
Yet the DoJ has at times struggled to demonstrate obvious harm. The most prominent “victim” of Google’s behaviour to have appeared as a prosecution witness was Microsoft chief executive Satya Nadella, the head of one of the richest companies on the planet. Google’s lawyers argued it was Microsoft’s own failure to make inroads into the smartphone business with its Windows operating system that robbed it of a mobile platform for its own search engine.
Despite these issues, Google has been put squarely on the defensive in trying to argue in court against the significance of deals that it has been willing to pay billions of dollars for.
It has denied, for instance, that the vast amount of user data it gets as a result of the defaults has given it an insurmountable advantage. According to the search company, there are diminishing returns from getting ever-larger amounts of data about what users are clicking on.
But emails showed some of its executives disagreed with that view. Another Google claim has been it is simple for users to change the default settings on their devices. But in reality, according to one government witness, hardly any users ever make this switch.
As the DoJ moves closer to wrapping up its case, it has succeeded in showing how Google used its huge wealth to cement its dominance in search. But it is not yet obvious it has cleared the bar in proving this counts as anti-competitive behaviour.
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