“This wheel has been turning for more than 12 years and it always turns to Google’s advantage,” Justice Department attorney Kenneth Dintzer said in his opening statement.
“The evidence will show they hid and destroyed documents because they knew they were violating the antitrust laws,” he said. “That’s what Google did.”
In Google’s opening statement, John Schmidtlein, the company’s lead litigator, said the firm’s success has been due to the quality of its products, not anti-competitive conduct. He argued that Google faces a wide array of search rivals, including sector-specific platforms like Tripadvisor and Grubhub.
“This court cannot intervene in the market and say, ‘Google, you’re not allowed to compete,’” he said. “That is anathema to U.S. antitrust law.”
The trial is the culmination of years of investigation into Google’s practices by the government, and a major milestone in the ongoing saga of how the United States regulates competition. For the last several years, a once-niche group of scholars who argue that the government should more aggressively enforce its antitrust laws against Big Tech have been gaining power in Washington, and the trial will be one of the biggest tests of whether that movement can move past theoretical arguments and begin cutting into the power of the tech giants.
If the government’s case is successful, it could upend the way people access the internet, by blocking Google from using its massive cash hoards to secure special rights to have its search engine be the default on mobile phones. Even if Google wins over the judge and the government loses, the exposure from a months-long trial in which top executives are expected to testify under oath could slow the company down, experts have said.
The trial also comes as the emergence of advanced AI technologies may reshuffle fortunes in the high-tech industry. This case may play a role in whether Google can transfer its search market dominance to the AI era, or if it will end up surpassed by rivals, such as Microsoft.
Schmidtlein, the Google lawyer, argued that the government’s case was “all about Microsoft” and relied too much on evidence about Google’s alleged impact on the rival tech giant, which he called the “plaintiffs’ supposed victim.” Schmidtlein said Google’s prominence in search surpassed Microsoft because the rival failed to adequately invest and innovate in the space, not because it was blocked from keeping up in terms of scale.
The Google lawyer also pointed to Microsoft’s recent investments integrating generative AI tools into its search products as a sign of ongoing competition and innovation in the space, citing a February blog post in which Microsoft said that infusing AI into its search ranking engine “led to the largest jump in relevance in two decades.”
While the federal government described Google as a sprawling monopoly that leverages its power in search to fuel other parts of its business, including in digital advertising, Schmidtlein argued that officials lacked proper evidence to show that Google’s conduct broke U.S. antitrust law, and said officials “cannot aggregate” complaints against different parts of the company.
Bill Cavanaugh, who is representing a group of state attorneys general that has also sued Google, said in his opening statement that Google has only gotten more dominant since the Federal Trade Commission looked into charges of anticompetitive conduct in the company’s search business a decade ago. The FTC declined to pursue an investigation at the time, in a controversial decision.
“Google assured the FTC all was well,” he said. “Google asked this court for another pass with the same assurance that all is well. The evidence will show not all is well.”
In a sign of public interest in the case, the court set up an overflow room for members of the public to watch the trial, as well as two media rooms with at least 100 seats for reporters.
The case is being tried before U.S. District Judge Amit Mehta, who was appointed by President Barack Obama in 2014. Mehta narrowed the scope of the case last month, throwing out several of the government’s claims as insufficiently evidenced, while allowing others to proceed to trial.
Early into the opening statements Tuesday, Mehta asked Dintzer when Google became a monopoly. Dintzer said it was before 2010.
“2010, we find them as a monopolist illegally maintaining their monopoly,” Dintzer said.
One central issue that will be debated in the coming weeks is whether Google’s payments to device-makers like Apple to have its search engine built into their computers and phones as a default service — beginning in the early 2000s — constituted an abuse of monopoly power. Mehta will also evaluate if Google’s delays in allowing Microsoft access to its search advertising tool Search Ads 360 amounted to illegal anticompetitive behavior.
Dintzer said Google pays more than $10 billion a year for agreements to ensure it is the default search engine on web browsers and mobile devices.
Many of the case’s most sensitive and contentious early details, however, including information about whether competitors’ foothold in the search market has decreased over the past decade, were obscured from the public during the proceedings on Tuesday. Federal and state officials’ opening public presentations featured dozens of redactions, which Google has pushed for to maintain confidentiality over potential trade secrets.
Google’s search engine has maintained 90 percent market share for years, and there is little dispute that the company overwhelmingly dominates this sector. Whether Google abused this position against its rivals is a trickier question, involving arcane ins and outs of antitrust law. The FTC, for one, has had trouble meeting thresholds of proof in some of its recent efforts to rein in Silicon Valley giants.
But antitrust lawyers say that even when judges don’t hand down explicit penalties, such cases historically have curbed aggressive behavior of industry giants. They point to the rise of Google and other internet competitors in the wake of the Justice Department’s 2000 case against Microsoft, which ended in a settlement.
“Microsoft could have easily killed Google in the cradle — and Amazon and Facebook,” said Gary Reback, a Silicon Valley antitrust lawyer who spearheaded efforts that led to the case against Microsoft. “But they didn’t do that because of antitrust enforcement.”
Roughly a hundred audience members packed the federal courtroom on Tuesday. Jonathan Kanter, the architect of the Justice Department’s case against Google, looked on from the front row as both sides delivered their opening remarks, flanked by his deputies. Kent Walker, Google’s chief legal office, sat opposite Kanter as the proceedings began.
In the afternoon, the Justice Department began its case by putting Google’s chief economist, Hal Varian, on the stand.
Dintzer drilled down on an internal memo that Varian wrote in 2003 titled “Thoughts on Google v Microsoft.”
“We should be careful about what we say in both public and private,” Varian wrote. “‘Cutting off their air supply’, and similar phrases should avoided. It would be ironic, indeed, if Microsoft played the antitrust card against Google but that is not as unlikely as it may now appear.”
“You warned people at Google to communicate carefully?” Dintzer asked Varian.
“Yes,” Varian replied.
Dintzer also showed the court an internal email Varian wrote in October 2009 in which he reminded colleagues to use the term “query share” instead of “market share.” Under questioning, Varian said one of the reasons he asked people not to use the term “market share” was antitrust concerns. Exactly how a company’s “market” is defined and what share of that market it dominates is a core issue in anti-monopoly cases.
The judgment in the Google case likely will not come until next year. It may be years more before it is clearer how the case has affected Google’s trajectory, including its prospects in the emerging artificial intelligence sector.
Expected highlights in the coming weeks include testimony by Google chief executive Sundar Pichai and by senior Apple executives.
The Justice Department will have the floor for the next three and a half weeks to question witnesses and present its evidence, after which the state attorneys general will have two weeks to make a supplementary case. Starting Oct. 25, Google will have three weeks for its defense.
Rebuttals, post-trial briefs and closing arguments are expected to continue for weeks afterward.
De Vynck reported from San Francisco.