Google Pays ‘Huge’ Sums to Maintain Search Engine Dominance, DOJ Says

(Bloomberg) — Alphabet Inc.’s Google. pays billions of dollars each year to Apple Inc., Samsung Electronics Co. and other telecommunications giants to illegally maintain its position as the No. 1 search engine, the US Justice Department told a federal judge Thursday.

DOJ attorney Kenneth Dinzer would not disclose how much Google is paying to be the default search engine on most browsers and all US cell phones, but described the payments as “huge numbers.”

“Google is investing billions in bankruptcies, knowing that people won’t change them,” Dinger told Judge Amit Mehta during a hearing in Washington that marked the first major confrontation in the case and brought together top DOJ officials and its attorney general. Nebraska among the spectators. . “They buy default exclusivity because defaults matter a lot.”

Google’s contracts are the basis of the Justice Department’s landmark antitrust lawsuit, which alleges the company tried to maintain a monopoly on online search in violation of antitrust laws. State attorneys general are pursuing a parallel antitrust lawsuit against the search giant, which is also pending before Mehta.

A trial is not expected to formally begin until next year, but Thursday’s hearing was the first substantive one in the case — a day-long seminar where each side laid out their views on Google’s business.

Google’s antitrust lawsuit, filed in the days of the Trump administration, was the federal government’s first major effort to rein in the tech giants’ power, which continues under President Joe Biden. On Thursday, the White House hosted a roundtable of experts to explore the harm big tech platforms can do to the economy and children’s health.

Google attorney John Schmidtlein said the Justice Department and states are misunderstanding the market and focusing too narrowly on smaller search engine competitors such as Bing and Microsoft Corp.’s DuckDuckGo. Instead, Google faces competition from dozens of other companies, he said, including ByteDance Ltd.’s TikTok, Meta Platforms Inc., Amazon.com Inc., Grubhub Inc. and additional locations where consumers go to search for information.

“You don’t have to go to Google to shop on Amazon. You don’t have to go to Google to buy flights on Expedia,” he said. “Just because Google doesn’t face the same competition on every query doesn’t mean the company doesn’t face tough competition.”

Having fresh data about user search queries is key to a search engine’s success, lawyers for the DOJ, the states and Google all agreed. Google controls the most popular browser, Chrome, and the second most popular mobile operating system, Android.

In his presentation, the DOJ’s Dintzer focused on the engineering of Google’s search engine and how its default contracts have stuck with potential adversaries. In mobile, Google contracts with Apple, smartphone makers such as Samsung and Motorola Solutions Inc., most browsers and the three U.S. telecommunications companies — AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc. — to ensure its search engine is set as the default and comes pre-installed on new phones, Dinger said. Microsoft’s Bing search engine is the default on the company’s Edge browser and Amazon’s Fire tablets, he said.

Google’s contracts make it the “gateway” through which most people find websites on the Internet, which has allowed it to prevent competitors from gaining the scale they would need to challenge its search engine, Dinger said.

“Default exclusivity allows Google to systematically deny competitors data,” he said.

Google’s Schmidtlein said the company has contracted with Apple and browsers such as Mozilla since the early 2000s. The DOJ and states have not explained why those deals are now problems, he said. The revenue-sharing deals Google offers to browsers are essential for companies like Mozilla Corp., he said, because they offer their products to users for free.

“The reason they are working with Google is not because they had to. it’s because they want to,” Schmidtlein said. The company “was extremely successful and did something incredibly valuable. Competition in substance is not illegal.”

The case is US v. Google, 20-cv-3010, US District Court, District of Columbia (Washington).

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