Summary

  • Google is in court for a high-stakes trial brought by the US government - prosecutors say the outcome will determine the future of the internet

  • The tech giant is accused of using illegal tactics to dominate the search market by paying to be the default option on products like Apple phones

  • "When you've hobbled your rivals, your product will always be good enough," a lawyer for the department of justice says

  • Google denies using unfair practices, arguing that its product is superior than that of rivals, and that it actually increases competition in the devices market

  • It's the first monopoly trial against a tech giant in decades and is seen as key test of whether the US government can curb Big Tech's power

  • If the government wins, it could stop Google being the default search engine, impose fines or demand a total restructure of the company

  1. We're leaving our coverage here... for nowpublished at 18:25 British Summer Time 12 September 2023

    Emma Owen
    Live reporter

    Now that we've heard the opening arguments from both sides, we're going to wrap up this live page.

    It's unclear how long this trial will take, but some guess it could last as long as 10 weeks.

    So, who could we expect to be called upon in court?

    • Sundar Pichai, chief executive of Google's parent company, Alphabet
    • Eddy Cue, senior vice president of services, Apple
    • John Giannandrea, senior vice president of machine learning and AI strategy, Apple
    • Adrian Perica, voce president of corporate development, Apple

    Earlier this month, Cue, Giannandrea and Perica lost a challenge to stop them being called as witnesses in the trial. We know that Pichai is in Washington this week for a global AI forum at the Senate.

    Rest assured we'll be keeping an eye on this case, and will bring you more coverage as it goes on.

    For now, thanks for joining us, and enjoy the rest of your day.

  2. This case could have ramifications for decadespublished at 18:20 British Summer Time 12 September 2023

    Gary O'Donoghue
    Washington correspondent, in court

    Pettyman court houseImage source, Getty Images

    This case against Google is just the latest in a series of clashes between giant, multi-national tech corporations and Washington.

    It's a sign of just to what extent such companies are now integrated into our lives that the battles have criss-crossed everything from privacy, to national security to protecting children from online bullying and peer pressures.

    And that's before you get to the very fabric of democracy - and the role in the distribution of disinformation that some tech giants have been accused of fuelling.

    In some ways, which search engine you use might seem a trivial question, but this case is, at bottom, about the rules underlying a capitalist economy, what constitutes fair and unfair competition, and what drives innovation and value for consumers.

    It has a long history in the US - previous governments, more than 100 years ago, did battle with oil companies, tobacco manufacturers and steel giants over the same issues.

    Those cases shaped the US economy for decades afterwards - cases like this one against Google could have similar ramifications.

  3. 'A case about the future of the internet'published at 18:16 British Summer Time 12 September 2023

    Google logo on phoneImage source, Getty Images

    So Google vs the US government is under way, and this morning in the E Barrett Prettyman court house in Washington, the opening remarks from both sides were heard.

    The prosecution went first, who claimed:

    • Google has had a monopoly on search engines for 12 years
    • Google told Apple "No default placement - no revenue share" which Department of Justice lawyer Kenneth Dintzer said was the search engine saying "take it or leave it"
    • Dintzer also claimed monopoly has given Google the privilege of offering a "less-than-optimal" product and alleged it was paying $10bn a year for privileged positions

    We then heard from Google's lawyer, who argued:

    • The most-used desktop computer in America belongs to Microsoft, which relies on the Bing search engine
    • Changing default settings on iPhone can be done in 4 taps
    • Mozilla has often evaluated which search engine to make default - switching between providers
    • Some of the most valuable searching - for food - happens via other names, like Yelp or DoorDash

  4. Who are Google's competitors?published at 17:46 British Summer Time 12 September 2023

    The government has said Google has a monopoly, because it handles about 90% of general search queries.

    Google is trying to persuade the court that they need to take a broader view of the competition that it is facing - and consider how much searching happens via other names, like Yelp or Doordash.

    Google says those smaller sites should be considered, especially since they focus on the kinds of searches that are most lucrative from an ad-sales perspective.

    You don't need to be a general search engine "to take search ads and other revenue away from Google," Schmidtlein says.

    The judge notes that economists often use prices to help define markets - which is tough to do when search is free. That may mean he will be looking for the government to address Google's argument on this point.

  5. Google says it faces most competition on food searchespublished at 17:44 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    As prosecutors have tried to allege that Google is a monopoly because of a lack of search engine competition, Schmidtlein says they are failing to consider "the most valuable queries".

    He says these are food related searches in places like DoorDash, Yelp, and GrubHub.

    These are "the most monetized queries", Schmidtlein says, and Google "faces an enormous amount of competition" there.

  6. Why we can't show you inside the courtpublished at 17:24 British Summer Time 12 September 2023

    James Clayton
    North America technology reporter

    Prettyman court houseImage source, Getty Images

    The vast majority of this trial will not be broadcast on a public feed.

    No audio, no Zoom. If you’re not in court, you won’t be able to hear what’s going on.

    That doesn’t apply to opening statements, so this a rare opportunity to listen in.

    The American Economic liberties Project had attempted to file a motion to have a public feed, external for the trial - they argued it was in the public interest to allow people to tune in.

    But the judge accepted Google’s argument that much of the trial would contain confidential information – and decided that the trial would not be broadcast.

  7. US vs Big Tech or Big Tech vs Big Tech?published at 17:20 British Summer Time 12 September 2023

    Natalie Sherman
    New York business reporter

    Judge Mehta asked Google how much of its defence will rely on arguments that its agreements actually helped boost competition in other markets - giving Android, for example, an edge to help it battle Apple.

    "We talked about this the other day and whether it's even relevant for my consideration," he noted.

    Google said it would play a big role in its arguments.

    The response underscores one of the big features of this case – that many of the other players are giants in their own right, like Microsoft and Apple.

  8. Making Google the default increases competition - lawyerpublished at 17:16 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    Schmidtlein elaborates on his argument that Google's contracts to share revenue with Android in exchange for default search exclusivity improves competition as far as devices go.

    He says that Android phones are more affordable than Apple, which means more options for consumers to buy smartphones, which means more people using search and generating data valuable to advertisers.

    "The more consumers who can afford smartphones, the more they're able to search, increasing output in both search and search advertising", he says.

    "Google still gets the overwhelming majority of queries on Windows PCs," Schmidtlein says, arguing again that while default settings matter, they're not the end-all.

    Windows default search option is Bing, but Schmidtlein says data shows "Bing gets a small fraction of search queries on Windows PCs".

  9. Is it easy to switch search engines?published at 17:01 British Summer Time 12 September 2023

    Natalie Sherman
    New York business reporter

    Government lawyers say being installed as a default search engine gives Google a big advantage.

    Google - no surprise - disagrees. They say it is easy for users to switch, if they wanted to.

    "It is literally four taps on the phone," Schmidtlein says.

    He claims everyday users have no problem figuring that out - and if they do, they can just search on, where else? Google.

    "YouTube, owned by Google, will show you 20-plus videos on how to change the default," he says.

  10. Search engine competition does exist - Schmidtleinpublished at 16:57 British Summer Time 12 September 2023

    Schmidtlein has sought to prove that, despite government lawyers' claims, search engine competition does exist and that browsers, like Mozilla, do have search engine options.

    "Mozilla has regularly evaluated which search engine to make as the default... In 2014, it decided to switch to Yahoo. It had choices," he says.

    Schmidtlein says their decision to switch to Yahoo ended up "harming" the business, with users switching the settings to use Google and other search engine services.

    Schmidtlein says that Google's contracts with Android and Apple that make it the default setting for search increases competition.

    "The evidence will show that they promote competition between Android and Apple mobile devices, competition that leads to better devices that increase competition in search and search ads markets by increasing output."

  11. 'We won the competition on our merits' - Google lawyerpublished at 16:48 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    Schmidtlein rebuts the idea that Google is a search engine monopoly due to lack of competition by its own doing.

    "Microsoft, Duckduckgo, and Brave are just a few search engine competitors who also have browsers. They each set their own search engine as the default, just as Google does with its Chrome browser", he says.

    Earlier, government lawyers said Google held unfair exclusive contracts that made its search engine the default choice on android and Apple products.

    Schmidtlein's response: "Google won these competitions on the merits, and that intense competition for browser defaults have improved browser performance and quality, resulting in higher search engine usage."

    And government lawyers say that having Google's search engine as a default setting requires a cumbersome process for users to change the default to another search engine.

    Schmidtlein shot this notion down when he said: "It is literally 4 taps on the phone. … it takes a matter of seconds. iPhone users can figure out how to search the default."

  12. 'Americans choose Google because of its superior quality'published at 16:43 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    John E Schmidtlein, the lead lawyer for Google, is now speaking in court.

    "Google is surely no gatekeeper," he says.

    He says the most-used desktop in the US belongs to Microsoft, which rely on Microsoft's search engine Bing.

    But he says Americans still opt for Google more often because of what he says is its superior quality.

    "To the numerous times DOJ lawyers alleged that Google monopolised the search market because of its unfair exclusive default search engine contracts with companies like Apple, it's hardly surprising that these other search engines can't win default status on Apple and Android devices when they relied on Bing for search results."

  13. We're about to hear from Googlepublished at 16:29 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from Washington DC

    We've just had a 15-minute break, where I had the opportunity to look back through the morning's transcripts so far.

    There's one more detail worth bringing to you - Kenneth Dintzer, the senior Department of Justice lawyer who spoke first, told the judge that Google pays more than 10 billion per year for what he called "privileged positions".

    Judge Amit Mehta has now returned to the bench and Google's opening remarks are about to begin.

    Stay with us as we continue to bring you live updates.

  14. Apple is best placed to compete, but doesn't, says prosecutorpublished at 16:13 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    Former Justice Department official, William Cavanaugh continues: "Apple is best positioned to compete in search against Google. They have experience crawling and indexing the web.

    "They have search function," he says, before adding: "They have the financial resources and marketing advantage.

    "But instead, Google has shared their monopoly profits to avoid the risk of a formidable competitive threat."

    This last quote is in reference to Google paying Apple a percentage of its search revenue, which the department of justice argues disincentivises competition from Apple, a company with the resources to potentially challenge Google's alleged monopoly.

  15. Google 'doubled down' on dominance, says lawyerpublished at 16:01 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    A lawyer for a group of states - which has joined the justice department in bringing the case - is now addressing the judge.

    William Cavanaugh - who refers to himself as Bill here - says: "Google has doubled down on its efforts to use default in its distribution agreements to preserve its dominance."

    "The evidence will show that it is unquestionable that Google has an enormous monopoly power," Cavanaugh says.

    He says the company has roughly 90% of US search engine market share.

  16. How Google search makes moneypublished at 15:45 British Summer Time 12 September 2023

    Emma Owen
    Live reporter

    As I'm sure you know, when you "Google" something, you will see a series of ads mixed in with your search results.

    If you look at the image below (which is included in court documents), a quick search for "best brown shoe" will immediately serve you shopping ads for brown shoes.

    Google uses these consumer search queries (and the information it learns about its giant user base) to sell ads.

    According to the court documents, in the US advertisers pay about $40bn annually to place ads on Google’s search engine results page.

    Showing ads placed near search resultsImage source, Court document
  17. Should we care that Google has a monopoly?published at 15:35 British Summer Time 12 September 2023

    Natalie Sherman
    New York business reporter

    Google has no peers in search. That has fuelled its incredibly lucrative online advertising business – and the government argues, gives it a monopoly on data generated that any would-be rival would need to establish a viable alternative.

    Campaigners say that with competition foreclosed, Google has little pressure to improve its product or respond to concerns about how it handles consumer data.

    Google, of course, claims that people are happy with its product. Both sides have a point.

    Surveys suggest satisfaction with Google is relatively high, especially compared to some other Big Tech firms like Facebook, but public confidence has fallen and surveys , externalsuggest, external support for regulatory action has increased.

  18. 'Hobble rivals and your product will be good enough'published at 15:31 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    Dintzer continues setting out why he believes Google's monopoly is a problem. It has awarded them the privilege of continuing to offer a less-than-optimal product, he says.

    "People are satisfied with Google," Dintzer says, but it's problematic for people to believe "the idea that Google is good enough" and "not that it can't be better".

    "Of course, when you've hobbled your rivals, your product will always be good enough," he says.

  19. 'The monopolist has an advantage rivals can't meet'published at 15:28 British Summer Time 12 September 2023

    Brandon Drenon
    Reporting from inside court

    Kenneth Ditzner continues in the court room: "Apple is contractually required to provide its queries to Google. All of them."

    "If it wanted to free itself from Google, it could do whatever it wants, the problem is that the most natural way for it to do it would be to do it slowly, it would be to bleed off some queries to people who could handle it," the government's lawyer says.

    "Google has made sure that that can't happen, and has made it impossible for a rival to compete for Apple defaults… the monopolist has an advantage that the rivals can’t meet," he says.

    Dintzer says that Google also has a monopoly over the advertising market in search.

    Because of Google's scale and search dominance, Dintzer says, they are able to control and artificially inflate prices for advertisers. "Google is able to raise prices by manipulating the auction and forcing the prices up."

  20. What Google's dominance looks like in practicepublished at 15:20 British Summer Time 12 September 2023

    Natalie Sherman
    New York business reporter

    As we've been hearing, the government’s case focuses on how Google became - and has remained - the search engine that is automatically installed on most smartphones and web browsers.

    So what does this look like in practice?

    iPhones are used by about half of smartphone users in the US. As soon as an iPhone user tries to use the internet and types in a question or key word, the results are powered by Google – even if the person, as is likely, is using the Safari web browser, not Google’s rival offering, Chrome.

    Users can opt to use a different search engine - alternatives include Microsoft’s Bing, for example, or Duck Duck Go, which brands itself as having greater privacy protections - but that takes a fair amount of effort, so they rarely do.

    Is that set-up illegal? Google says users just like it better than other offerings – noting that when Bing is pre-installed instead, people often do make the effort to change.

    a search queryImage source, Getty Images