Monday, July 15, 2024

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 state attorneys general that it illegally maintained a search and advertising monopoly, in a landmark antitrust case that could reshape tech power.Google’s lawyers are set to wrap up their arguments in the case — U.S. et al. v. Google — on Tuesday, which will be followed by a government rebuttal. Judge Amit P. Mehta of U.S. District Court for the District of Columbia, who is presiding over the nonjury trial, is expected to deliver a verdict next year after both sides summarize their cases in writing and deliver closing arguments.

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

How Google’s actions were justified

It paid Apple an appropriate (and undisclosed) amount of money

The heart of the U.S. case against Google is that the company paid Apple and other tech platforms to make itself the default search engine on the iPhone and other devices, thereby keeping rivals from competing and stopping Apple from potentially developing its own search product.

But on the witness stand, Sundar Pichai, Google’s chief executive, said there was “value” in being the default search engine on a device and framed the agreements with other companies as sound business decisions.

Google paid $26.3 billion for its search engine to be the default selection on mobile and desktop browsers in 2021, according to the company’s internal data presented during the trial. Most of that, around $18 billion, went to Apple, The New York Times has reported. Kevin Murphy, a Google economic expert, testified on Monday that Google shared 36 percent of search revenue from the default deal with Apple.

Mr. Pichai testified that he repeatedly renewed the search engine deal with Apple because it worked well, leading to an increase in search usage and revenue and benefiting Apple, Google and its shareholders. He said Google paid Apple so much to protect users’ search experience on iPhones, not knowing if Apple would degrade that experience if Google hadn’t improved the financial terms of the deal.

Google is not the only search game in town

To rebuff the idea that other search engines were too small to compete for default status on browsers, Google’s lawyers argued at the trial that rivals had been able to win contracts but could not hold on to them because of the poor quality of their products.

They cited an instance in 2014 when Mozilla, which makes the Firefox browser, exited a default-search partnership with Google and selected Yahoo.

The choice was unpopular with users and disastrous for the Firefox browser, Mitchell Baker, Mozilla’s chief executive, said in a deposition that was played 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 pointed to Google’s more than 90 percent market share in search as evidence that the company’s actions stifled meaningful competition. But Google’s lawyers said its search market share was only part of the story, because the company competed broadly with more players, including TikTok and Amazon, where consumers look for information online.

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

How Google helped people and fostered competition

It has invested more than search rivals in making its product great

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

On more than one occasion, Google referred to the sums of money it spent on research and development. Last year, the figure totaled about $40 billion. Prabhakar Raghavan, Google’s head of search, testified that such investments helped the company deliver the best technology to users.

“It would be foolish of us to not put our best foot forward,” he said. That was the reason Google employed 8,000 engineers and product managers for its search engine, including about 1,000 people focused on quality, he added.

Google argued that its rivals had not invested in the same way. When questioningSatya Nadella, Microsoft’s chief executive, earlier in the trial, a Google lawyer pushed him on whether Microsoft still devoted fewer employees to its search engine, Bing, than Google did to its search product. Mr. Nadella avoided the specifics of Microsoft’s personnel and said the company was investing mainly in core areas of the search business.

Its innovations have helped consumers around the world

Google said it had set the pace for tech advancements. It said it had updated its Chrome browser every six weeks, more frequently than Microsoft had traditionally updated its browser, Internet Explorer. It has introduced Android features that forced Apple to respond, resulting in more apps and other smartphone features, Mr. Pichai testified in the trial.

During cross-examinations, Justice Department lawyers sought to underscore that Google could have brought more innovation to users but did not so it could safeguard its monopoly. They pointed to a 2019 Google proposal to create an incognito search engine, which would not have stored any data on users but could have lost the company billions in revenue. Google decided not to build the browser.

Justice Department lawyers sought to highlight Google’s delay in bringing generative artificial intelligence to users, sitting on the technology until OpenAI released ChatGPT last November. It was part of a broader government argument that Google had not adequately improved products for consumers until it felt competitive pressure.

The government has also accused Google of using its power in search and ads to raise ad prices when it faces a revenue crunch. The company’s employees testified that it balanced its pursuit of revenue from each ad with ensuring that users generally saw high-quality ads in its search results.

Its actions have been competitive on balance, not anticompetitive

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

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

When Google rolled out its search engine in 1998, it was to a search market that was ruled by Yahoo, AltaVista and Ask Jeeves, the company argued. Its Chrome browser, which debuted in 2008, disrupted a browser market where Microsoft’s Google said. And it fostered more competition against or Apple’s iPhone with its Android operating system, which it introduced in 2008, the company said.

Cecilia Kang contributed reporting.

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