Google Faces Antitrust Verdict, Could See Breakup or Data Share

Key Takeaway

• The US Justice Department concludes its antitrust trial against Google, challenging the tech giant's default search engine agreements.
• Google defends its market dominance as a result of product superiority and consumer preference, amidst claims of stifling competition.
• Outcome could lead to significant remedies, including possible company breakup or mandated data sharing with competitors.

Antitrust Trial Concludes

The United States Justice Department, alongside state attorneys general, has concluded its antitrust trial against Alphabet Inc.’s Google, marking a significant legal challenge for the tech giant. The trial, which is the first major antitrust confrontation between the federal government and a U.S. technology company in over two decades, concluded with closing arguments on May 3, approximately six months after testimony ended in November. The case, presided over by Judge Amit Mehta of the US District Court for the District of Columbia, scrutinizes Google’s agreements with other companies that set its search engine as the default option on browsers and mobile devices.

Google's Market Dominance Questioned

The Justice Department and states argue that Google, controlling nearly 90% of online search queries, has engaged in practices to maintain its search market monopoly. These practices include paying billions to tech rivals, smartphone manufacturers, and wireless providers like Apple Inc. and Samsung Electronics Co., to make Google the default search engine. This, the plaintiffs claim, hinders competitors such as DuckDuckGo or Microsoft Corp.’s Bing from accumulating the necessary data to enhance their products and challenge Google. Justice Department lawyer David Dahlquist highlighted the lack of choice for advertisers to reach consumers outside of Google’s search ads product.

Google's Defense

In response to the lawsuits, Google defended its market position by attributing its dominance to the superiority of its product and consumer preference. The company likened its agreements for preinstallation on devices to benign deals similar to those between cereal companies and grocery stores for prime shelf space. Google maintains that competition is readily available, asserting that consumers can easily switch to other search engines if they choose.

Potential Implications and Other Legal Challenges

The trial’s outcome could have significant implications for Google. If the government succeeds in proving that Google’s agreements violate antitrust laws, the case will move to a remedies phase, which could involve measures such as breaking up the company or requiring Google to share search data with rivals. Beyond this trial, Google faces other antitrust challenges, including a lawsuit led by Texas and 16 other states over online advertising monopolization and a case against its advertising technology business filed by the Justice Department in January 2023.