Microsoft has spent more than $100 billion developing its Bing search engine over the past two decades, but has little market share to show for it. About nine out of 10 internet searches in the US are made through Google, with Bing splitting the remaining queries with a long list of smaller competitors.
On Thursday, the US government asked a federal judge in Washington to rule that Google is illegally maintaining that lead by unfairly manipulating users to keep Microsoft and other competitors down.
Google’s dominance prompted the US Department of Justice to sue the company in 2020, alleging that it violated antitrust law by using exclusion agreements to maintain its monopoly. The two sides entered a secret trial late last year before taking a break for nearly five months to allow US Judge Amit Mehta to digest the evidence.
Mehta heard closing arguments on Thursday, with government lawyers arguing that without his intervention, Google’s dominance would remain for years to come despite emerging threats from AI chatbots like ChatGPT. “The search engine industry was ineffective against any incoming competitor,” said attorney Kenneth Dintzer.
The case is the first to go to trial in several lawsuits the government has brought against the biggest tech companies since tightening antitrust scrutiny of the industry under then-President Donald Trump in 2019. The Biden administration did not let off the gas.
It is central to the government’s lawsuit against Google More than $20 billion says Google pays Apple every year to be the default search engine on iPhones and the Safari browser in most parts of the world. According to the government, Google pays more than $1.5 billion a year to wireless carriers and device manufacturers and more than $150 million to browsers for similar defaults in the United States. The government argues that Google can pay these amounts and still make huge profits because the market for search and search advertising in the US is cornered.
Google’s lawyers counter that companies like Apple default to Google because it provides a better experience for users, not just because they get paid. The search company claims that when browsers like Mozilla chose an alternative to Google, they lost users due to the change. “Google has legally acquired monopoly power and scale,” attorney John Schmidtlein told Mehta. “Microsoft missed the boat.”
Before Mehta is now the question of whether Google has unfairly gained popularity.
Profit growth
According to court documents, Google’s dealings with Apple date back to 2002, when the developer of Safari was first able to integrate Google search into the browser. The payments began in 2005 after Google co-founder Sergey Brin floated the idea of sharing some of the company’s booming search revenue or “helping Apple in other ways,” according to court documents.
But in a deal struck that year, Google got something in return for agreeing to pay Apple half of its sales: Google search would be required to be the default in Safari. Demand has since spread to more Apple services, while the revenue share and associated incentive fees have changed.