At the end of last week, US District Judge Amit Mehta in Washington heard closing arguments in a historic case between the US Justice Department and Google-parent Alphabet that could have wide ranging consequences for big tech companies across the board.
The government says that Google unlawfully dominated web search and related advertising, and the outcome of the case could in fact influence the very “future of the internet.”
The judge will now deliberate on the matter over the next few weeks and months before issuing a judgment most likely later this year.
Mehta noted that one of the major issues to consider was platform “substitute-ability” for advertisers, and sought to find out whether competitive platforms such as ByteDance’s TikTok and Meta’s Facebook and Instagram are indeed competitive substitutes for search advertising dollars.
The lawyer representing the government, David Dahlquist, said that “advertising revenue is what drives Google’s monopoly power today.”
“Google kept advertisers in the dark as to how search advertising works and how their advertising dollars were spent. Only a monopolist can make a product worse, and still make money,” said Dahlquist.
Google’s lawyer John Schmidtlein meanwhile countered that its share of US digital advertising revenue has, in fact, steadily declined.
Over the course of the trial, witnesses from Verizon, Samsung and Google too, testified about the company’s annual payments – A$39.79 billion in 2021 – to ensure that its search engine is the default on smartphones and browsers and to maintain its dominant market share.
In addition to the issue surrounding its monopoly in its advertising business, the court also heard arguments that Google did not preserve documents that should have been turned over to the Justice Department during its antitrust investigation, and that it left it to employees to decide which documents should be retained.
This case is the first antitrust trial brought by the federal government against a US technology company in more than two decades.
Here in Australia, Google has also been dragged through the justice system. In December 2022, in a win for Google, an Australian Federal Court dismissed the Australian Competition and Consumer Commission’s case, finding that Google did not mislead Australian consumers when it published an on-screen notification to Australian users and changed its privacy policy to expand the scope of its use and collection of personal data. That change, said the ACC at the time, allowed internet tracking data that had previously been kept separate from users’ Google accounts and not linked to an individual user, was subsequently linked to users’ names and other identifying information, with the newly combined information used to improve Google’s advertising business.
Another ongoing case in a federal court in Melbourne, between Epic Games in one corner and Google and Apple in the other. Epic contends that Apple and Google are running illegal monopolies, by banning other app stores from their devices and forcing apps to use their payment platform where they charge between 15 and 30 per cent in fees.
