Google’s Attorney Says It Can’t Be Blamed For Microsoft’s Failure To Innovate In Search, Says DOJ’s Antitrust Lawsuit Is Trying To Force “People To Use Inferior Products” — Update

Ted Johnson
·6 min read
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UPDATE: Google’s market dominance has been due to the company’s continuous innovation in its search engine, not by exclusionary conduct that stifle competitors like Microsoft’s Bing, the company’s lead attorney said in his opening statement in the landmark antitrust trial on Tuesday.

John E. Schmidtlein, lead attorney for Google, said that Microsoft failed to win over consumers with Bing because it did “invest, innovate and prioritize the development of search.” He said that Microsoft, having been beaten in the market, chose instead to focus on its Windows operating software.

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The Justice Department and state plaintiffs claim that Google’s deals to become the default browser on search engines and phones have given it an unfair advantage over rivals.

But Schmidtlein said that browers like Mozilla and Apple conducted competitions on which search engine would be the default and that Google won “on the merit.” Apple’s Safari, he noted, was promoted in 2007 with the Google search design feature, but they also “touted Yahoo if they preferred it.” “That same product design exists today,” Schmidtlein said. The reason the Google is the default search engine on a number of platforms is because it is what users prefer, he said.

He also said that Microsoft’s smaller market share in search cannot be blamed on scale, citing a 2009 deal that it made with Yahoo that essentially doubled the size of its product but “did not result in quality improvements.”

Schmidtlein also cited recent Microsoft statements on the recent gains in customers, driven by AI features, as an example of how it still is able to compete despite claims that Google’s dominance has foreclosed competition.

He also said that Google continues to feel competitive pressure from sectors of the business like specialized search engines, set up for users to find things like hotels and clothing, on sites like Trip Adviser and Door Dash. “The guidepost should be, ‘Do I see Google taking action to address competitive verticals?” he said.

Schmidtlein said that “U.S. antitrust law cannot, as a matter of legal principle, change market outcomes,” suggesting that the government cannot prohibit Google from being a default search engine.

He also attacked the government’s case, claiming that it is being pursued “in the hopes of forcing people to use inferior products in the short run.”

PREVIOUSLY: Google’s lopsided command of the search market was put on trial on Tuesday, as federal and state attorneys argued that the tech giant unfairly abused its dominance at the expense of rivals and start ups.

“Google protects this money machine with a wall built from default and scale,” Kenneth Dintzer, lead attorney for the Justice Department, said in his opening statement.

The trial is being viewed as perhaps the most consequential tech industry antitrust case since the federal government challenged Microsoft in the late 1990s, protracted litigation that ended up costing the company time to mount a serious challenge in emerging internet search.

The federal government’s lawsuit against Google is one of a number of cases against tech giants, amid pressure to rein in their power.

The trial at the federal courthouse in Washington, D.C. is expected to last ten weeks. If U.S. District Judge Amit Mehta rules in favor of the government, there will be further proceedings to decide what steps Google must take to mitigate concerns over competition in the marketplace.

The case is being closely watched by many lawmakers, who have so far been unable to advance robust new antitrust legislation. It’s also been of interest to entertainment industry lobbyists, who long have called on Google to take greater steps to curb piracy, although that issue is not a part of the trial itself.

A flood of lawyers, law students and journalists arrived early at the courthouse for a view of the opening arguments in the case, which are expected to last through much of the day. “Even for D.C., I think we have the highest concentration of blue suits for one location today,” Mehta said at the outset.

At issue in the Google case are the ways in which the company, using its billions in ad revenue, has tried to ensure that its search engine is the default on products from Apple and on a number of different web browsers. U.S. attorneys also will cite Google’s bundling of its search engine with Android software.

“Google weaponized defaults to block rivals” from being distributed on mobile phones, Dintzer said, noting that Google’s demands to be the default on Apple’s Safari browser has kept the company from developing its own search engine. He cited an email in which a Google executive told an Apple official, “No default placement, no revenue share.”

He also previewed their case, saying that it would touch on how Google’s search monopoly impacted the advertising business as well as consumer privacy. “Without competition, Google refuses to provide credible protection for user data,” Dintzer said.

He said that they will show that Google’s monopoly has forced up prices in the search ad market, accusing the company of “manipulate” its auction process.

He also cited efforts by Google’s efforts to limit the growth of a Branch Metrics tool, capable of searching phone apps, by using and revising exclusive contracts with Samsung and AT&T to block the potential rival.

The government even has said that the case bears similarities to the Microsoft case, which took on its practice of bundling its Windows operating system with Internet Explorer.

In the lawsuit, first filed by the Justice Department and in 2020, the government plaintiffs noted that Google has “accounted for nearly 90 percent of all general-search-engine queries in the United States, and almost 95 percent of queries on mobile devices.” Another lawsuit filed by 35 states and the District Of Columbia is being tried at the same time as the DOJ litigation.

Dintzer and William Cavanaugh, lead attorney for the states, accused Google of withholding key evidence. “They destroyed documents for years because they knew their conduct violated antitrust laws,” Dintzer said. Cavanaugh cited instances where Google executives moved sensitive business discussions from email to chat, knowing that the latter would disappear.

Cavanaugh claimed that Google has stifled specialized search engines, like Yelp and Expedia, forcing them to take out more Google advertising to maintain their visibility.

“They had incentive to go somewhere else, but their was nowhere else to go,” he said. Last month, though, Mehta concluded in a summary judgment decision that there was “no evidence” of anticompetitive harm to markets stemming from Google’s treatment of the specialized search engines.

When the litigation was filed, DOJ officials were not specific in describing what type of remedies they are seeking from the court other than to end what it claims is anticompetitive conduct and to order structural changes, such as divestments, “as needed.”

“Google is so dominant that ‘Google’ is not only a noun to identify the company and the Google search engine but also a verb that means to search the internet,” the government said in the lawsuit.

Google has argued that, despite its dominance in the market, it faces a healthy competitive market, including from Microsoft’s Bing and Facebook, as well as emerging AI technologies.

Among those expected to testify in the case are an array of antitrust experts as well as Google CEO Sundar Pichai and Microsoft CEO Satya Nadella. One of the claims in the case is that Google’s default agreements has been a burden on Bing, limiting its scale.

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