Google has put forth a denial of any wrongdoing in its trial with the Department of Justice over allegations of antitrust practices. The trial began Tuesday September 12 and is expected to last through the next 10 weeks.
The DOJ initially filed a lawsuit against Google back in 2020. Alleging that Google had used its considerable market power and large coffers to edge out competitors. The lawsuit alleges that Google paid companies to give Google Search the default spot. Thus blocking competitors from having any real chance at competition. Google denied these claims back in 2020 and at the start of the trial it has denied them again. Sticking to its story that users chose Google over competitors.
In court, the DOJ has argued that Google paid billions of dollars to companies like Apple and others to make Google the default search engine. Lead litigator for the DOJ Kenneth Dintzer says Google “began weaponizing defaults” around 15 years ago. Dintzer also called these tactics an “Achilles Heel” for competitors. An interesting argument when you think about how often Yahoo and MSN are probably used today compared to Google.
Google pays more than $10 billion per year for these default contracts
Google is worth about $1.7 trillion these days. And the majority of that money comes from Search ad revenues. Amounting to somewhere in the ballpark of $224 billion a year. By no means a paltry sum. That makes it a little more believable when you hear how much Google is being accused of paying for default search contracts. According to Dintzer, Google is paying about $10 billion. But not just $10 billion flat since it started “weaponing defaults.” $10 billion per year. A staggering dollar amount that many companies will never see in lifetime revenue. Annually. All to keep Google Search at the top.
The allegations against Google are pretty serious and could result in sweeping changes across the industry. And as the biggest antitrust case in the US in over 20 years, its decision will probably end up setting a precedent going forward. Interestingly, Google argues that it still faces plenty of competition. Noting competitors like Amazon and Yelp, stating that “consumers can post questions about what to buy or where to go.”
Google is also accused of deleting documents “for years” that could have been used in the court proceedings. With Dintzer saying that Google “turned history off to rewrite it in this court.” It’s going to be a long 10 weeks.
2023-09-13 15:07:55