Google pays ‘billions’ to maintain search engine dominance

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Alphabet Inc. Google pays billions of dollars each year for Apple Inc., Samsung Electronics Co. and other telecommunications giants to illegally maintain its No. 1 search engine spot, the US Department of Justice told a federal judge on Thursday.

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According Bloomberg’s Lea NylenDOJ attorney Kenneth Dintzer did not disclose how much Google is spending to be the default search engine on most browsers and all US mobile phones, but described the payments as “huge numbers”.

“Google invests billions in defaults, knowing that people won’t change them,” Dintzer told Judge Amit Mehta during a hearing in Washington that marked the first major showdown in the case and drew top DOJ antitrust officials and Nebraska’s attorney general among the onlookers.

“They buy exclusivity by default because flaws matter a lot.”

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Google’s contracts form the basis of the DOJ’s landmark antitrust lawsuit, which alleges the company sought to maintain its online search monopoly in violation of antitrust laws. State attorneys general are concurrently pursuing an antitrust suit against the search giant, also pending before Mehta.

Google’s trial won’t start until 2023

A trial is not expected to officially begin until next year, but Thursday’s hearing was the first substantive in the case – a day-long tutorial where each side presented their views on Google’s business.

Google’s antitrust lawsuit, filed at the end of the Trump administration, was the first major effort by the federal government to rein in the power of the tech giants, which continues under President Joe Biden. The White House on Thursday hosted a roundtable with experts to explore the damage major tech platforms can do to the economy and children’s health.

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Google attorney John Schmidtlein said the DOJ and states misunderstand the market and focus too narrowly on smaller search engines like Bing and Microsoft Corp’s DuckDuckGo.

Instead, Google faces competition from dozens of other companies, he said, including ByteDance Ltd’s TikTok, Meta Platforms Inc, Amazon.com Inc, Grubhub Inc and other sites where consumers go to seek information.

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“You don’t have to go to Google to shop on Amazon. You don’t have to go to Google to buy plane tickets on Expedia”, he said.

“Just because Google doesn’t face the same competition for every query doesn’t mean the company doesn’t face fierce competition.”

Having fresh data about users’ search queries is key to a search engine‘s success, attorneys for the DOJ, states and Google all agreed. Google controls the most popular browser, Chrome, and the second most popular mobile operating system, Android.

Surrounded by potential rivals

In his presentation, DOJ’s Dintzer focused on the mechanics of Google’s search engine and how its default contracts have hampered potential rivals.

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On mobile, Google contracts with Apple, smartphone makers like Samsung and Motorola Solutions Inc, most browsers, and the three U.S. telecom carriers — AT&T Inc., Verizon Communications Inc, and T-Mobile US Inc — to ensure that its search engine is set to default. and comes preinstalled on new phones, Dintzer said. Microsoft’s search engine, Bing, is the default for the company’s Edge browser and Amazon’s Fire tablets, he said.

Google’s contracts make it the “gateway” through which most people find websites on the Internet, which has allowed it to prevent rivals from gaining the scale needed to challenge its search engine, Dintzer said. .

“Exclusivity by default allows Google to systematically refuse data from its rivals”, he said.

Google’s Schmidtlein said the company had contracted with Apple and browsers like Mozilla since the early 2000s. The DOJ and states have not explained why those agreements are now problematic, he said. . The revenue-sharing deals Google offers to browsers are essential for companies like Mozilla Corp., he said, because they offer their products to users for free.

“The reason they’re partnering with Google isn’t because they had to; it’s because they want to,” said Schmidtlein.

The company “had extraordinary success and was doing something incredibly valuable. Competition on the merits is not illegal.

The case is US v. Google, 20-cv-3010, US District Court, District of Columbia (Washington).


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