Is Google maintaining illegal monopoly? Bay Area attorneys discuss DOJ antitrust case

OAKLAND - Google and the U.S. Department of Justice delivered closing arguments Friday in Washington D.C. in the government's antitrust case against the Silicon Valley tech giant.

"What happens in this case is really going to determine the future of really the next 20 years of the internet," said Mitch Stoltz, IP litigation director for the Electronic Frontier Foundation non-profit.

Justice Department lawyer Ken Dintzer told the judge that "today must be the day" for him to step in and stop Google's monopolistic behavior, which he likened to the tactics used by Microsoft two decades ago that prompted a similar antitrust battle.

The Justice Department attorneys argued in their complaint and in court that Google illegally maintained a monopoly over the search engine business and shut out competitors by spending more than $20 billion per year on companies such as Apple, to be the default search engine on their devices.

"It's telling that Google was spending upwards of $20 billion a year on deals to keep Google search the default search engine and various mobile operating systems and web browsers, and that was more money than they spent on research and development," Stoltz said.

Google attorneys argue that Apple chose them because Google has the best product. The company did not issue a statement Friday but directed KTVU to a previous Google blog post from November 2023.

"It would be an unprecedented decision to punish a company for winning on the merits," Google's lawyer, John Schmidtlein, said late Friday afternoon in summation of the company's closing arguments.

Google attorneys also said that it is easy enough for consumers to download a different search engine if they prefer a competing product.

The U.S. government, a coalition of states and Google all made their closing arguments Friday in the 10-week lawsuit.

U.S. District Judge Amit Mehta, must now decide whether Google broke the law in maintaining a monopoly status as a search engine.

Santa Clara University law professor Eric Goldman says exclusive distribution agreements are not new.

"These agreements are as old as the internet," Goldman said, noting that exclusive contracts can make competition difficult, even for other big tech companies.

"Microsoft's Bing has competed with Google for Apple's deal, and has not been successful. So what are the chances for a company that's even smaller than Microsoft, who might be a new player?" Goldman said.

Goldman says if the judge rules Google is an illegal monopoly, there is a wide range of punishments.

"You could imagine mandating some kind of choice. You could prevent the distribution agreements altogether. You can impose significant financial consequences on this. You could require Apple to do some other kind of competition or beauty show in order to pick its winner," Goldman said.

The most extreme measure would be an order to break up Google, Goldman added, but one concern is whether any remedies will hinder future growth in the industry.

"Technology will keep moving, but the revenue doesn't evolve, and it gets out of sync."

Google says it faces much more intense competition when consumers make targeted searches. For instance, the tech giant says shoppers may be more likely to search for products on Amazon than Google, vacation planners may run their searches on AirBnB, and hungry diners may be more likely to search for a restaurant on Yelp.

And Google has said that social media companies such as Facebook and TikTok also present fierce competition.

During Friday's arguments, Mehta questioned whether some of those other companies are really in the same market. He said social media companies can generate ad revenue by trying to present ads that seem to match a consumer's interest. But he said Google can place ads in front of consumers in direct response to queries they submit.

"It's only Google where we can see that directly declared intent," Mehta said.

Schmidtlein responded that social media companies "have lots and lots of information about your interests that I would say is just as powerful."

The company has also argued that its market strength is tenuous as the internet continually remakes itself.  Earlier in the trial , it was noted that many experts once considered it irrefutable that Yahoo would always be dominant in search. Today, it said that younger tech consumers sometimes think of Google as "Grandpa Google."

Government lawyers also argued the tech company should be sanctioned for the "systemic destruction of documents" that they argue was done to purposefully hide evidence of monopolistic intent and practices.

Trial evidence showed that Google lawyers recommended employees ensure that their work chats were not saved because of their potential legal implications.

The government asked Mehta to impose a sanction that allows the judge to infer that all the deleted chats were unfavorable to Google regarding their anticompetitive intent.

Mehta said he was unsure whether he would grant the government's request, but he was sharply critical of their document-retention practices and speculated that there ought to be some kind of sanction.

"Google's document retention policy leaves a lot to be desired," he said. "It's shocking to me, or surprising to me, that a company would leave it to its employees to decide when to preserve documents."

Google lawyer Colette Connor defended the company's practice of generally failing to preserve internal company chats. "Given the typical use of chats, it was reasonable," she said.

While Google's search services are free to consumers, the company generates revenue from searches by selling ads that accompany a user's search results.

Justice Department attorney David Dahlquist said during Friday's arguments that Google was able to increase its ad revenue through growth in the number of queries submitted until about 2015, when query growth slowed, and they needed to make more money on each search.

The government argues that Google's search engine monopoly allows it to charge artificially higher prices to advertisers, which eventually carry over to consumers.

"Price increases should be bound by competition," Dahlquist said. "It should be the market deciding what the price increases are."
Dahlquist said internal Google documents show that the company, unencumbered by any real competition, began tweaking its ad algorithms to sometimes provide worse search ad results to users if it would increase revenue.

Google's lawyer, Schmidtlein, said the record shows that its search ads have become more effective and more helpful to consumers over time, increasing from a 10% click rate to 30%.

Mehta has not yet said when he will rule, though there is an expectation that it may take several months.

If Judge Mehta finds that Google violated the law, he would then schedule a "remedies" phase of the trial to determine what should be done to bolster competition in the search-engine market. The government has not yet said what kind of remedy it would seek.

Jana Katsuyama is a reporter for KTVU. Email Jana at jana.katsuyama@fox.com or call her at 510-326-5529. Or follow her on Twitter @JanaKTVU. 

AP Business Writer MATTHEW BARAKAT contributed to this report.