Google will be going to court this week in the biggest anti-trust lawsuit in more than twenty years, according to the Wall Street Journal.
The United States Department of Justice sued the company three years ago for using “illegal agreements to sideline its rivals” in such a way that consumers and advertisers were harmed in the process.
One example of this behavior cited by the Wall Street Journal was Google’s billion-dollar agreement to serve as the default search engine on the Safari web browser, the browser that comes pre-installed in Apple iPhones.
Given that Congress has stopped short of passing laws to regulate these kinds of practices from Google and other sprawling tech giants, the government has turned to anti-trust law as a means by which to constrain these companies.
In the lawsuit, the Justice Department alleges that Google “illegally maintains a monopoly in online search and related advertising markets.”
The Justice Department argues that Google largely maintains its 90 percent market share through “restrictive” agreements with web browsers and phone companies — such as Apple, but also Mozilla, Samsung, and Verizon — that result in Google being set as the default search engine on the majority of cell phones in the United States.
Google also has agreements with Android-based devices that “forbid pre-installing or promoting rival search engines if they opt to take a cut of Google’s search revenue.”
According to the Justice Department, these practices create an anti-competitive environment in which alternative search engines are artificially prevented from “improv[ing] their products,” and Google is given “an anticompetitive scale advantage.”
It is also argued that the situation “stifles innovation” because there is no incentive for Google to improve its search engine in order to maintain its position in the market.
It was also noted by the Justice Department that they believe Google has used its dominance to raise the price of advertising in its search results.
Google, on the other hand, has defended its conduct. According to the company, its deals actually promote competition by “supplying browser providers with what they want: a single default search option for customers.”
The company also pointed out that its agreements don’t prevent browsers from offering alternative search engine options, as users are able to go into their settings and adjust the default search engine on their devices.
In terms of Android devices, where Google products come pre-installed, the company argues that users have every ability to “switch away” from the pre-loaded Google search engine if they so desired. The fact that many users don’t do this “isn’t evidence of exclusionary practice” according to Google, “but of consumers sticking with a superior product.”
Paul Gallant, a tech-policy analyst at Cowen Washington Research Group, told the Wall Street Journal that should Google lose the lawsuit, it is likely that the company will be forced to operate under new constraints — such as limitations on its ability to pay companies like Apple and Samsung to make their search engine the default.
“That seems like the most natural remedy,” Gallant said.
The last time the government pursued a major anti-trust lawsuit like this was in 1998, when the Justice Department sued Microsoft for attempting to control the internet browser market on devices using the Windows operating system.
Microsoft lost the suit and was forced by the court to divide the company in half, creating two separate entities — one for operating systems and one for software — but the decision was overturned on appeal.
The Department of Justice eventually settled with Microsoft, requiring them to make it easier for third-party browsers to be installed on Windows devices and barring them from punishing manufacturers for installing third-party software on its machines.
In the current lawsuit against Google, the Justice Department is arguing that that Google has taken a page out of “Microsoft’s 1990s playbook to build and maintain its own monopoly in internet search and advertising.”
Google, on the other hand, has suggested that the comparison is “inapt.”
The Justice Department has a month to present its case, and Google will be able to begin questioning witness sometime in October.
According to the Wall Street Journal, it is predicted the witness testimony will conclude in November, at which time both sides will write and present summary briefs to the judge, each making their case for why the judge should their preferred way.
It is expected that a ruling will be issued at some point next year.
If it is found that Google did, in fact, violate anti-trust laws, the judge will likely schedule a separate trial to “decide penalties.”
Regardless of the outcome, the decision is likely to be appealed, meaning that a final verdict may very well be several years away.
