Published by: Priyanka Deshpande
Byline: Prashant Nair
The biggest tech antitrust trial in 25 years has begun as the US government targets Google's search dominance. CNBC-TV18’s Prashant Nair shares 10 things to know about the trial.
The long awaited USA vs Google trial began last night (September 12).
The initial suit by the US government was filed in October 2020, nearly 3 years ago.
The trial will determine if Google has unlawfully maintained monopoly power through a set of exclusive contracts with distribution partners.
The US Department of Justice & 38 state Attorneys General claim that Google maintains its search & advertising monopoly through exclusive contracts, making it the default browser in exchange for a share of ad revenue from Google searches.
They allege that these contracts are with 1) web browser developers, most notably Apple & Mozilla; 2) original equipment makers (like Samsung) & wireless carriers (like Verizon) who sell Android devices.
JP Morgan estimates that Google will pay out nearly $30 billion to search distribution partners in 2023, or about 17% of Google Search & other gross revenue.
The court will look at claims that Google’s alleged exclusive arrangements violate Section 2 of the Sherman Act, which makes it unlawful for a person to monopolise, or attempt to monopolise...any part of the trade or commerce.
If Google loses its distribution deals, it introduces the risk that a competitor (Microsoft’s Bing) could become the default search provider on platforms where Google is the default today, or that Apple could develop or buy its own search engine.
For historical context, the DOJ vs Microsoft case went more than 3 years from the trial start date on May 18, 1998, to the settlement on November 2, 2001.
Separately, Google’s Adtech business is also under regulatory scrutiny, with both the DOJ & the EC seeking divestment of parts of Google’s Adtech business.