August 31, 2023
Good afternoon, Pro readers! Ashley's here with our final August deep dive, a look inside the Google search antitrust case before the trial kicks off Sept. 12.
- We're off Monday for Labor Day, but we'll be back to our regular schedule Tuesday afternoon as senators come back into town.
1 big thing: What to expect when the DOJ takes on Google
Illustration: Sarah Grillo/Axios
The Justice Department's highly anticipated antitrust case against Google goes to trial Sept. 12 after years of preparation and buildup, Ashley writes.
What's happening: The DOJ, state attorneys general and Google are gearing up to make their opening arguments.
- This portion of the case is expected to take eight to nine weeks. Any remedies sought by the judge will be sorted out in another phase of the case, which could take the same amount of time.
Catch up quick: In his summary judgment, U.S. District Judge for the District of Columbia Amit Mehta touched on a number of issues the case may end up addressing. But at its core, the case now is about two key questions:
- Whether Google's exclusivity deals with web browsers like Mozilla and preloading its Google Search services on Android to be the default search engine are anticompetitive.
- Whether Google's Search Ad 360 product discriminates against ad features used by other search engines, like Bing, through slower development of ad tools for non-Google products.
What they're saying: "People don't use Google because they have to, people use Google because they want to," Kent Walker, Google's chief legal officer, told Ashley in an interview. "We compete hard for those default positions, we bid for them so that people can easily access our products."
- "Our success comes down to the quality of our products, not the quality of our contracts. It's innovation, not pre-loading," he said. "It's easy for people to find alternatives in the marketplace."
- Walker called it "ironic" that this "backwards-looking case" is happening during an "unprecedented forward-looking innovation" in artificial intelligence in the field.
State of play: Walker said companies like Mozilla and Apple choose to design their browsers using a default search engine because "that's what's easier for users. Open competitions are held for these settings, and "they pick the best search provider for their users."
- "People know that there are choices out there and will go to their preferred choice if that is what they want to do," he said.
- On Google's arrangements to be pre-loaded on Android phones, Walker likened it to supermarkets charging cereal companies for their products to be displayed at eye level: "That's never been illegal under American law; if anything, it's pro-consumer."
- Walker also said arrangements with Android keep their phones low-cost.
The other side: For the DOJ, this case is a major inflection point in how competition law applies to the modern internet age. The department is likely to argue that Google got to its position of superiority in search engines not by accident or by having a superior product but through illegal monopoly maintenance.
- That maintenance, the DOJ argues, is due to those exclusivity agreements, which cost billions of dollars and enable Google search to have billions of daily automatic inquiries.
- The DOJ may argue that Google's power of scale hurts everyday American consumers through privacy violations and a degradation of search results, and that this case is not about the quality of products but how Google was able to defeat its rivals through illegal means.
- Though Judge Mehta threw out state attorneys general claims that specialized search companies like Yelp and Expedia are purposely down-ranked by Google, the DOJ may argue that downstream impacts of Google's monopoly maintenance are relevant issues to the trial.
What we're watching: Executives from companies like Apple and Mozilla are also expected to testify about negotiations of agreements with Google and why they were made.
- Both Google and the DOJ are likely to bring up the explosion of generative AI and what it means for the search engine market.
2. Google vs. DOJ: A timeline
Illustration: Gabriella Turrisi/Axios
Here's a helpful timeline of what's happened in U.S. vs. Google as we gear up for the Sept. 12 start of the trial.
Oct. 20, 2020: The Justice Department and 11 state attorneys general filed a complaint against Google, accusing the tech giant of violating Section 2 of the Sherman Antitrust Act, engaging in unlawful monopoly maintenance in the markets for "general search services, search advertising and general search text advertising."
- At the time, DOJ said no remedies were off the table, including Google potentially having to spin off parts of its business.
Dec. 17, 2020: A bipartisan coalition of 38 state attorneys general sued Google, accusing it of disadvantaging rival specialized search companies such as Yelp and TripAdvisor by boosting its own Google-sponsored results and using those same tactics to assert dominance in areas like smart speakers.
Jan. 7, 2021: The DOJ consolidated the two above cases under the Federal Rules of Civil Procedure.
Jan. 15, 2021: California, Michigan and Wisconsin joined as plaintiffs.
2021-23: Both parties participated in an extensive, rigorous discovery period, culminating in Google asking for summary judgment for all claims in both cases.
- During this period, plaintiffs and defendants had many status hearings.
- High-profile scuffling occurred over Google declining to depose the same executives repeatedly and accusations that Google had overzealously claimed attorney-client privilege and engaged in a practice of deleting chats to keep company emails and other information secret.
- The DOJ may argue that there's still evidence of Google's anticompetitive conduct buried in company communications it won't reveal.
Aug. 4, 2023: Judge Mehta threw out parts of the case, including the specialized vertical provider claims, citing a lack of evidence of anticompetitive harm.
Sept. 12, 2023: Trial is set to begin.
The big picture: Expect a slow process. When the DOJ sued Microsoft beginning in 1997, the process took five years. An antitrust suit against IBM in the 1970s took 13.
3. How U.S. vs. Google impacts the Hill
Illustration: Tiffany Herring/Axios
In the time that Google, the DOJ and state AGs have been duking it out over antitrust claims, Congress has been trying to tackle tech competition, Ashley reports.
Yes, but: Congress' efforts haven't resulted in major new legislation, meaning it's been up to the agencies and courts to determine how antitrust should be applied in the digital platform age.
Why it matters: Ultimately, courts and agencies can enforce and interpret only the antitrust laws on the books. Without new legislation, they're left to determine how decades-old laws apply to new technology.
Flashback: The House Judiciary Committee's antitrust subpanel did a sweeping investigation and report on the state of competition in digital markets in 2020, culminating in the introduction of landmark tech antitrust bills.
- The Senate Judiciary Committee pushed its own version of some of those bills aggressively in 2022, and two of them ā the American Innovation and Competition Online Act and the Open App Markets Act ā came very close to a full floor vote but didn't make it.
- AICOA was reintroduced for 2023 and advocates argue it's still in play. But any major momentum is gone.
- Some bills that impacted court venues for antitrust cases and boosted antitrust funding for agencies did pass.
What we're watching: Whatever conclusions the DOJ comes to about the legality of Google's actions and if there is illegal monopoly-building may color what Congress does next.
- The Justice Department endorsed AICOA and has said it will enforce whatever laws are on the books.
The intrigue: Some of the behaviors that bills like AICOA sought to prevent, such as "self-preferencing," echo claims from companies that compete with tech giants that were ultimately dismissed by Judge Mehta.
- AICOA sought to prevent major companies like Google, Apple, Amazon and Meta from prioritizing their own products and sponsoring results over those of rivals using their platforms.
- But it's not clear whether AICOA would have, for example, banned the type of exclusivity agreements at the heart of the DOJ trial, or the types of behaviors the specialized vertical providers were complaining about.
The bottom line: Members of Congress who are concerned about tech antitrust will have a lot of material to work with in the coming weeks if they're looking to push for legislation again.
ā Thank you for reading Axios Pro Policy, and thanks to editors Mackenzie Weinger and David Nather and copy editor Brad Bonhall.
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