US government says Google pays $10bn per year to maintain market dominance

Tuesday’s opening remarks kick off the most consequential antitrust case in years, testing the limits of the tech giant’s power.

The Google logo appears on a phone and laptop screen
Google accounts for a whopping 90 percent of the search engine market [Richard Drew/AP Photo]

Lawyers have presented opening arguments in a landmark antitrust case against the search engine Google, which could test the limits of corporate power in the United States.

On Tuesday, in a crowded federal courthouse in Washington, DC, the US Justice Department argued that Google uses its wealth and influence to stifle competition and maintain its dominance as the most popular search engine. Google countered that internet users rely on the search engine because of its quality.

“Google pays more than $10bn per year for these privileged positions,’’ said Kenneth Dintzer, the Justice Department’s lead litigator.

“Google’s contracts ensure that rivals cannot match the search quality ad monetisation, especially on phones,” he added. “Through this feedback loop, this wheel has been turning for more than 12 years. It always turns to Google’s advantage.”

The opening statements mark the beginning of one of the most consequential antitrust cases in decades.

Critics have long expressed concerns over monopolies in the tech industry, where a handful of giant companies — including Google’s parent company Alphabet — control much of the market, their influence stretching from popular platforms to data acquisition and devices.

Google alone, for example, commands about 90 percent of the search engine market.

The administration of President Joe Biden, however, has taken a more adversarial stance on antitrust issues, announcing stringent rules for mergers between tech companies in July.

The current case, initiated under the administration of former President Donald Trump nearly three years ago, represents the most ambitious government effort yet to address the alleged modern-day tech monopolies.

Arguments will take place for 10 weeks, with top executives from companies such as Google and Apple expected to testify. Judge Amit Mehta is unlikely to issue a decision until next year, and a ruling against Google would mean another trial to assess options for reining in the company.

On Tuesday, Google’s lawyer, John Schmidtlein said that customers who want to switch to a different search engine can do so with just “a few easy clicks”. But, he argued, users continue to use Google because of its convenience and calibre.

“Users today have more search options and more ways to access information online than ever before,” Schmidtlein told the court in his opening argument.

The Justice Department’s legal team, meanwhile, alleged that the company has used that considerable stature to bend other companies to its will.

Google’s parent company Alphabet has 182,000 employees and is worth about $1.7 trillion.

Dintzer, arguing for the Justice Department, said that Alphabet entered into revenue-sharing agreements with Apple on the condition that Google become the default search engine on every Apple device.

“This is not a negotiation,” Dintzer said. “This is Google saying: Take it or leave it.”

Source: Al Jazeera and news agencies