In Google antitrust trial, default is everything and nobody likes Bing

Google is one of the biggest tech companies in existence, but its empire is built on a tiny white search bar, and the US Department of Justice recently launched what may be one of its biggest challenges yet. , In one of the largest antitrust trials in recent memory, the government argues that Google's dominance is not only due to good design, but due to a series of forced deals that have stagnated the search engine market — while Google complains that he is being punished for success.

Despite all this, the trial began quietly. I arrived at the courthouse around sunrise for the start of US vs. Google, worried I'd find a line around the corner. Instead, the sidewalk was nearly empty, filled with a handful of cautious early arrivals. “I thought there would be more people there,” one said as we waited in the humid D.C. air. In the hours that followed, a smaller crowd emerged – filling the courtroom and spreading into an overflow room and two dedicated media rooms for reporters. A man wearing an Uncle Pennybags-style top hat, fake mustache and monocle was walking down the hall of the courtroom; “I'm here to expose Google's monopoly and provide moral support as a fellow billionaire,” he told me, twirling his mustache. He admitted that he couldn't be there every day to keep the joke going – it's a 10-week trial, he admitted, and "I have a job."

The case against Google is relatively straightforward and potentially explosive. The Justice Department argues that around 2010, Google began using anti-competitive tactics to maintain a large-scale search engine monopoly. Already dominating alternatives like Bing and Yahoo, it strengthened its position with the "power of default", leading to deals that put Google's product front and center. This included paying Apple and Mozilla to make Google the default engine in Safari and Firefox, and paying Android manufacturers to prominently display the Google Search widget on phones. (That agreement is called a Mobile Application Distribution Agreement, or MADA, and it has been legally controversial for years in Europe.) As it grew, it used large amounts of search data to improve its engine. Did. did, creating a feedback loop that – the Justice Department alleges – made it almost impossible to defeat. "This case is about the future of the Internet and whether Google Search will ever face meaningful competition," attorney Kenneth Dintzer said in an initial statement.

US v. Google follows a series of unsuccessful legal attempts to limit the power and growth of America's biggest tech companies. It is the Justice Department's most aggressive action against Microsoft since a 1990s antitrust lawsuit that established it closed out competition for Web browsers on its flagship Windows system. But that trial began two years later when a district judge found that Apple could maintain its locked-down iOS ecosystem and two months later Microsoft decided to buy Activision Blizzard, continuing the rapid consolidation of the games industry. Narrated. Wait. In both battles, the companies convinced a judge that they weren't just trying to shut down the market — they were making decisions that also helped consumers. They also characterized the allegations as complaints of fraud from fellow tech companies that could not compete fairly: in Apple's case, Fortnite publisher Epic, and in Microsoft's case, rival console maker Sony.

Google has also adopted a similar approach. "If Google is prevented from competing, it won't stop Yahoo or DuckDuckGo from moving faster," lawyer John Schmidlein said in the company's initial statement. While the Justice Department has drawn parallels between '90s Microsoft and modern-day Google, Schmidtlein said the facts of the antitrust battle between America vs. Google and Microsoft's disliked Internet Explorer browser "could not be more opposite and different," the people argue. Is. Have overwhelmingly and actively chosen Google even when given the choice. Separately, he argued that Google's default search deals bring much-needed revenue to the web browser and its Android deals help create a viable mobile competitor to iOS.

Until now, the Justice Department has countered this argument by focusing on areas of internal communications obtained during its investigation. It focuses on memos and emails where Google explicitly states the value it derives from being the default search option, as well as messages that allegedly set out the exact terms that Apple and any other non-Google search engine would use. Will use for. -How to use the adjacent service. ("Your Honor, this has an authoritarian bent," Dintzer said.) Schmidtlein has derided the excerpts as cherry-picked and "out of context." But whatever they ultimately reveal, the Justice Department's goal so far is clear: Keep the focus on the executives who are talking about how Google's actions benefit Google, not those consumers. But. But he says who is he trying to serve.

The Justice Department is also drawing direct comparisons to the Microsoft antitrust case, but in a complicated way. Some of the most serious allegations include Microsoft making obscene and rhetorically violent statements about "cutting off Netscape's air supply" in the browser wars. This time, government lawyers are pointing to communications in which Google employees carefully avoided words that could have drawn the ire of the antitrust watchdog.

(don't) turn off their air supply

Before the lawsuit, the Justice Department sought to sanction Google for knowingly (and allegedly) deleting conversations that could reveal how it approaches competition. In the first week, it focuses on the judicious use of language by the tech giant. The first witness was Google's chief economist Hal Varian, whom Dintzer led through a series of email conversations about Google's search business. In one, Varian took issue with Marissa Mayer (who oversaw Google's homepage at the time) referring to the company's "market share" – a term that can indicate overall market dominance. "Let's make sure we're consistent in calling it 'query share' instead of 'market share,'" Varian told Penny Chu, another Google employee. "Of course, I know I'm not using the word 'market,'" Chu replied. "There's one big thing I miss from that legal training."

Varian responded that "query share" was a more accurate term. And he claimed unfamiliarity with the 2011 presentation in which more rules were created to avoid touchy language, including terms such as "network effect," "scale," "bundle," or "tie." Concerns date back to at least 2003, when Varian in a memo urged Googlers to be "sensitive" about perceptions of monopolistic behavior, citing the "air supply" comment as an example. What should not be avoided?

The Justice Department also analyzed Varian's 2009 claims that data obtained from user searches was less than critical to search engine quality – a very difficult process, to which Google's lawyers raised several objections. In an email series later that year, then-Google engineer Udi Manber argued that Varian was "factually wrong" to dismiss the importance of data-sharing in the Microsoft-Yahoo agreement. “It is simply not true that scale is not important. “We make very good use of what we get,” Manber said. “If Microsoft had the same traffic as us, their quality would be vastly improved, and if we had the same traffic as them, Our quality will decline significantly. it's a fact."

Varian then argued that the Justice Department was exaggerating the importance of the dissent; He said he accepted that scale matters, it just reduces returns. And lawyers for Varian and Google were equally irritated by the approach — which included reading paragraphs of emails in front of Judge Amit Mehta without giving Varian much room to refute them. It's a strategy that exposes Google's internal rhetoric, not its public-facing explanations of why it makes deals like MADA or the Safari agreement, to the company's obvious disappointment. (Former White House official Tim Wu, who visited the trial on Wednesday, compared Varian's prickly conduct to "Bill Gates circa 1998.")

power of default

With Varian and other witnesses, the Justice Department returned repeatedly to how much Google values default settings. It called in former Google employee and Shazam founder Chris Barton to discuss the importance of the agreement with mobile phone manufacturers and carriers. "We need to encourage carriers to ship to Google," Barton said in a 2011 email. "Without a special search deal, a big carrier can and will send an alternative to Google... You can bet that if we don't do that Microsoft and Yahoo will enter into contracts for search on Android through carrier deals. do."

Google's frequent counterargument is that it signals the kind of perfectly legal competition that other companies like Microsoft routinely engage in. Among other things, its lawyers have pointed out that Microsoft sets Bing as the default search option on Windows computers, which has more than a billion users – and this has not stopped Google Search from dominating the market. In the opening debate, Schmidlin showed instructions for switching from Google to another search engine, comparing it to the days of slotting in a software floppy disk or downloading programs over dial-up Internet.

So far, the Justice Department has fought this argument with one initial expert witness: Caltech behavioral economics professor Antonio Rangel. Rangel was one of the few non-Google employees who appeared on the witness stand earlier in the week, arguing in a presentation that search engines generate a "large and strong bias" toward the default pre-selected option. Rangel cited other cases where a default option has dramatically changed the way people make choices, such as opt-in organ donor programs and examples where Google has acknowledged the importance of having a default option – including Apple is also involved. This also includes cases like podcasts where it doesn't take up as much space.

In cross-examination, Google questioned Rangel's findings, pointing out that Bing's default placement, for example, did not help Microsoft that much. Google obviously can't argue that the defaults don't matter at all – given how much money has been spent on them – but it does argue that they're meant to tilt the scales in favor of an inferior product. Are. It is not enough. Google getting more antitrust scrutiny is a good thing for Microsoft, but it's almost impressive that Bing has become a punching bag in this testing.

What about consumers?

As reporter Yosef Weitzman, who appears in court daily, points out, Judge Mehta is actually examining how this all fits with the US consumer harm standard for antitrust decisions. There is nothing more expensive than this for the average person. After all, Google Search is free – so does the average user mind doing a little more work to access an option?

The Justice Department argues that unfair, pay-for-play competition strategies have prevented Google from improving search in ways that cause real harm. It hasn't been fully explored yet in the first week of testimony, but it's a prime example of lax privacy standards — if Google has to seriously compete rather than buy its way into your search bar, Dintzer said. . , it has to do a better job of keeping your data secure.

There is also another group of consumers: advertisers who pay for placements through Google's highly lucrative advertising system. Advertising is not the main focus of this case; Later suits would have it front and center. But the whole reason Google Search makes money is through ads, and one argument against Google is that it has achieved a level of power that allows it to unfairly set prices for advertisers who use its tools. allows for. We'll likely hear more about it from the coalition of states who have supported the Justice Department in adding their own charges to the case — and who will make their case later in the trial.

What will happen next?

The Justice Department is expected to present its case during the rest of September and early October, and we'll likely hear from current and former Google employees, including CEO Sundar Pichai. We're also expecting testimony from Eddy Cue and other Apple executives, as well as Neeva co-founder Sridhar Ramaswamy, whose doomed search engine was mentioned in the opening arguments. Google will get a chance to cross-examine witnesses and poke holes in the department's arguments, but following the state attorney general's arguments, we likely won't be able to fully present our side of the story until the end of October. All the companies involved here have done their best to prevent sensitive information from leaking, so it's hard to say whether we'll see revelations about how much Google is paying Apple — but it's always possible.

The question that matters most, however, is whether Judge Mehta can be convinced that consumer harm applies to free products like search engines. In recent years, it has seemed almost impossible to accuse a tech company of antitrust charges, and Google has plenty of defenses. While Microsoft recently won the Activision Blizzard case arguing that rival Sony had left it in the dust, Google is saying it is the best option in the market. Does that mean it's good or – as the Justice Department has argued – barely good enough? We will see this fight continue for months to come.