Tuesday, March 5

What Google argued to defend itself in a historic antitrust trial

Over the past two and a half weeks, Google has called a dozen witnesses to defend itself against claims by the Justice Department and a group of attorneys general that it illegally maintained a search and advertising monopoly, in a landmark antitrust case that could reshape technology. power.

Google’s lawyers are about to conclude their arguments in this case — US et al. v. Google — Tuesday, which will be followed by a government rebuttal. Judge Amit P. Mehta of the U.S. District Court for the District of Columbia, who is presiding over the nonjury trial, is expected to issue his verdict next year after both sides summarize their arguments in writing and present closing arguments.

The company’s main defense focused on how its actions were justified and how they helped consumers and competition. Here are Google’s main arguments.

The heart of the U.S. complaint against Google is that the company paid Apple and other technology platforms to become the default search engine on the iPhone and other devices, thereby preventing competitors from competing and preventing Apple from expanding potentially its own research product.

But on the witness stand, Sundar Pichai, Google’s chief executive, said it was “beneficial” to be the default search engine on a device and framed deals with other companies as business decisions judicious.

Google paid $26.3 billion to make its search engine the default selection on mobile and desktop browsers in 2021, according to internal company data presented during the trial. Most of that, about $18 billion, went to Apple, the New York Times reported. Kevin Murphy, a Google economic expert, said Monday that Google shares 36% of search revenue from the default deal with Apple.

Mr. Pichai testified that he repeatedly renewed the search engine agreement with Apple because it was working well, leading to increased search usage and revenue and benefiting Apple, Google and its shareholders. He said Google paid Apple a lot of money to protect users’ search experience on iPhones, without knowing whether Apple would degrade that experience if Google didn’t improve the financial terms of the deal.

“There was a lot of uncertainty about what would happen if the deal didn’t exist,” he said.

To refute the notion that other search engines were too small to compete for default browser status, Google’s lawyers argued at trial that competitors had been successful in winning contracts but could not keep them due to the poor quality of their products.

They cited a 2014 case where Mozilla, which makes the Firefox browser, ended a default search partnership with Google and selected Yahoo.

That choice proved unpopular with users and disastrous for the Firefox browser, Mitchell Baker, Mozilla’s chief executive, said in testimony at the trial. Yahoo’s user experience deteriorated and became overloaded with ads, she said, and it was “heartbreaking” to send users to Yahoo. Mozilla returned to Google in 2017.

Government lawyers have pointed to Google’s more than 90 percent market share in search as evidence that the company’s actions are stifling meaningful competition. But Google’s lawyers said its search market share was only part of the problem, because the company largely competed with other players, including TikTok and Amazon, where consumers search for online information.

The government also accused Google of abusing its position in the online advertising market. Google again sought to widen the opening in the trial, saying it was seeking ad spending that otherwise could have gone to any company, from Expedia to Meta, which owns Facebook and Instagram.

One of the main arguments in Google’s defense was that its focus and investments in search did not harm consumers or others, as the government tried to argue, but rather brought benefits.

On several occasions, Google has mentioned the amount of money spent on research and development. Last year, that figure was around $40 billion. Prabhakar Raghavan, head of search at Google, said such investments have helped the company offer the best technology to users.

“It would be stupid of us not to do our best,” he said. That’s why Google employs 8,000 engineers and product managers for its search engine, including about 1,000 people focused on quality, he added.

Google argued that its competitors had not invested in the same way. In questioning Satya Nadella, Microsoft’s chief executive, earlier in the trial, a Google lawyer asked him whether Microsoft still devotes fewer employees to its search engine, Bing, than Google does to its search product. Mr. Nadella avoided details of Microsoft’s personnel and said the company was investing primarily in key areas of the search sector.

Google said it set the tone for technological advancement. It said it updates its Chrome browser every six weeks, more frequently than Microsoft traditionally updates its Internet Explorer browser. It introduced Android features that forced Apple to respond, resulting in more apps and other smartphone features, Mr. Pichai tested in the trial.

During cross-examination, Justice Department lawyers sought to point out that Google could have brought more innovation to users, but did not do so to preserve its monopoly. They pointed to a 2019 Google proposal to create an incognito search engine, which would not have stored any user data but could have cost the company billions in revenue. Google decided not to create the browser.

Justice Department lawyers have sought to highlight Google’s delay in making generative artificial intelligence available to users, sitting on the technology until OpenAI released ChatGPT last November. It was part of a broader government argument that Google failed to adequately improve its consumer products until it felt competitive pressure.

The government has also accused Google of using its search and advertising power to raise ad prices as it faces a revenue crisis. The company’s employees testified that it balances its pursuit of revenue from each ad while ensuring that users generally see high-quality ads in its search results.

The Justice Department argued at trial that Google’s actions harmed competition and denied benefits to consumers. If the government proves that harm exists, then the burden is on Google to prove that those harms were outweighed by the competitive benefits created by its actions.

To that end, Google focused in the essay on when it introduced its search engine and other products and how its entry into those markets increased competition.

When Google launched its search engine in 1998, the search market was dominated by Yahoo, AltaVista and Ask Jeeves, the company said. Its Chrome browser, launched in 2008, disrupted a browser market where Microsoft’s Internet Explorer reigned supreme, Google said. And that has fostered more competition against Apple’s iPhone with the Android operating system, introduced in 2008, the company said.

Cecilia Kang reports contributed.