On September 11, the most high-profile cases in the last 25 years were heard in federal court in Washington: US Department of Justice vs. Google. The last time the US Department of Justice sued a major technology company was in 1998, when it brought a lawsuit against Microsoft.
This time, the department’s lawyers sued Google, accusing it of monopolizing search and advertising on the Internet.
Much of the focus in this case is how Google negotiates with other companies to make its search the default. We’re talking about Apple first because, unlike Android, Google doesn’t have control over iOS settings.
Google has long paid Apple to make its search the default on iPhones, Macs, iPads and other company devices.
But if Google loses this case, the deal could be over. And it is unknown who suffers more from this.
Google is accused of a sincere monopoly
The 21st century is the age of the Internet, and it is fair to say that Google is its symbol. The name of the company even gave rise to a verb describing what it does.
The US Department of Justice says Google is exploiting its market position to cause harm in three categories:
▪️ Search on the Internet: The sudden evil company consumes its monopoly to prevent entry into this competitive market.
▪️ Online advertising: Advertisers have to pay to advertise on Google search because they often have no alternative. Google, in turn, completely controls prices in a multi-billion dollar market.
▪️ User data: Most Google products are free, but the company instead collects users’ personal data to serve ads.
The peculiarity of this case is that the usual monopolies control prices, causing consumer wallets to suffer. But the Google product is free to use.
In fact, in the US it is not illegal to simply have a monopoly. If a user were to choose Google over many good alternatives, the result would be that Google would have a monopoly, then this would be fine from a legal point of view.
The violation is fair acquisition and retention of a monopoly, by destroying conservative ones. And this is exactly what the Ministry of Justice accuses Google of. In other words, Google dominates not because it has a better product, but because it has used its power to stifle competition.
Google was able to strengthen its position with the help of Apple
Google has long paid Apple, Mozilla, Samsung and other companies to make search the default in their products. The DOJ has illegally entered into contracts to keep them in search because they focus so heavily on consumers using Google rather than other search engines.
The result is a vicious cycle: Google has so many users that it can collect more data than anyone else to improve search results. Having improved search results, she continues to use her services.
This process is linked to other companies and allows Google to scale down and this can be used to increase profits and increase competitiveness.
Apple is not a defendant in this case, but its agreement with Google is a precondition for the trial.
Apple has a large base of users and devices that Google cannot control. According to The New York Times, Google paid $18 billion in 2021 to make search the default in Safari. That’s 4.92% of Apple’s revenue for all of 2021.
“Am I true that, at least today, Apple has a lot of leverage in negotiations with Google?”, asked Adam Sever, a representative of the US Department of Justice, head of Google partnerships Joanna Braddy. The Google employee answered briefly and clearly: “Yes”.
“Can you think of another search partner that might have more leverage in healthcare than Apple?”– North continues to ask. “At first glance, no”Braddy replied.
This short conversation in a Washington courtroom confirmed that Apple is a serious part of defining Google.
Since 2003, when the first version of Safari was released, Google has been the default search query. At that time, the Internet was not so widespread, and the release of the iPhone and iPad was several years away. But as the popularity of Apple devices has grown, so has the price, with Google paying Apple for its search.
Apple was considering several options to replace Google. John Giannandrea, head of machine learning and artificial intelligence at Apple, who previously conducted research in the same areas at Google, spoke about this in court.
So what Apple would like to do:
▪️ Turn Siri into a full-fledged search engine
▪️ Buy or invest in Bing from Microsoft.
Such options were suggested by Apple employees and the head of the company, Tim Cook. But all of them were accompanied by two fears: direct competition with Google and the rupture of a multibillion-dollar agreement.
Almost everyone who was considered for an Apple deal said they would give anything to be a part of it.
You come in the morning, brush your teeth and search for information on Google. At this level of habit formation, the only way to change is to change the default settings.
Satya Nadella, Microsoft CEO
According to Nadella, The claim that there is choice in the search engine market is a “fiction”. He tried for ten years to make Bing search the default on the iPhone and even offered Apple $15 billion a year to do it, but was rejected.
Gabriel Weinberg, CEO of DuckDuckGo, stated in court that the default use of DuckDuckGo only in Safari private mode increased the definition share several times.
Google and Apple have no problem
Google CEO Sundar Pichai is heading to court in Washington.
Google strongly disagrees with the accusation against itself. The company takes the position that people choose its services because they are useful and convenient. That’s why Apple, Samsung and Mozilla, she said, decided to use Google search in their products.
Google also claims that people always have the option to change the search engine on their phone.
CEO Sundar Pichai said in court that Google pays billions of dollars to other companies to make sure its search works the same way on other devices.
Pichai rejected any accusations that these contracts help maintain a monopoly in the Internet search market. At the same time, he believes that Google donates to Apple if it makes it harder to use the definition on iPhone.
John Schmidtlein, Google’s chief lawyer.
In terms of scale, Google doesn’t think that’s the right definition. The Justice Department says Google has a 90% share of the search market. But Google says its share is much smaller because it competes with Amazon when it comes to product search, TikTok and Reddit, as well as Spotify and ChatGPT.
In fact, The DOJ says Google is a big fish in a black pond, and Google says it’s not a pond, but a giant ocean..
And if the chairman agrees with Google’s position, then it will be very difficult for the Ministry of Justice to continue to maintain its position. That a judge should decide this process is Google’s monopoly.
Apple Senior Vice President of Internet Services Eddie Cue approaches the courthouse.
Apple also defended its legal settlement with Google. The most senior Apple employee to appear in court was Eddie Cue, Apple’s senior vice president of Internet services.
He stated that Google’s default in Safari was motivated by quality determinations and was not a matter of importance.
I didn’t think then or today that there was anyone who could match Google for search quality. Of course there was no alternative.
Eddie Cue, Apple’s Senior Vice President of Internet Services
In 2016, Cue met with Sundar Pichai, who had been Google’s CEO for a year at the time, to negotiate a higher percentage of revenue sharing.
Despite some disagreements over financial terms, the new deal never reached the point where the companies walked away from the agreement, Cue said.
There was a change in Google and our algorithms.
Eddie Cue, Apple’s Senior Vice President of Internet Services
Q also added that Apple never considered the possibility of creating its own search engine to compete with Google.although his words contradict John Giannandrea’s circumstances.
We’ve given Google some great clients – they’ve done a great job in the search engine space.
Eddie Cue, Apple’s Senior Vice President of Internet Services
According to a Justice Department spokesman, the new agreement, concluded in 2016, is in accordance with a clause obliging Apple and Google to defend the agreement if any problems arise from regulators. Cue said the proposal was written by lawyers for Apple and Google and that he believed it related to an antitrust investigation against Google in the European Union.
Also, the agreement between the restrictions is that Google advertises Chrome to Safari users.
What are the possible outcomes of this case?
US Department of Justice lawyers.
Regardless of who wins this case, everyone will be dealing with the hardware solutions as well as the outcome of the appeal in the available models.
If Google wins
In general, this does not affect the company’s activities in any way. Moreover, this may be a signal to other IT giants that government oversight is not as scary as it seems at first glance.
Google’s victory could lead to a revision of antitrust laws, which in the United States were written a long time ago. Initially, they were created to combat the classic monopolies that control price increases. But Google products are free, measuring the value of data is very difficult, so the relevant laws are difficult to apply in this matter.
If the US Department of Justice wins
If the Ministry of Justice wins, the judge will be able to fully or partially meet the needs of the department. In America, there are many different ways to fight monopolies. The most radical option is the complete liquidation of the company.
It’s unlikely that Google is expecting such a scenario, but it has been sent to other companies before.
Many experts believe that the first thing to do is Google is banned from paying other companies to make it their default search..
The main losers from this will be Apple and Mozilla. Apple is losing a major contract that earns it billions of dollars every year, and it doesn’t take much progress.
The same thing happened with Mozilla. The only difference is that for Apple, money from Google is only a small part of the company’s total revenue, but for Mozilla it is the main source of income.
The Firefox browser has always existed largely because some company paid Mozilla money to make its search setting the default. Basically this company was Google.
It is possible that both Apple and Mozilla may enter into deals with other companies, such as Microsoft. However, a deal will be less likely because Microsoft won’t be competing with Google.
It’s difficult to say how the ban on transactions with other companies will affect Google. Google has returned $26.3 billion to become the default search engine on most browsers and gadgets in 2021, according to Google’s external data presented in court.
It’s likely that advertising revenue covered most of the expenses in this article. Google could save a lot of money if the transaction is banned, but whether it can retain users is a big question.
Google is a very popular company with good search, helping billions of users solve their problems. Many of them probably continue to choose it as their default. The question remains how many people are ready to be beaten by Google simply because they are too lazy to change their search engine or suddenly find that the competition’s solutions are completely satisfactory to them.
Source: Iphones RU
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
