The DOJ’s Google Antitrust Case Wraps up this week with Google’s 21-year partnership with Apple being Center Stage
This week, federal enforcers will rest their antitrust case against Alphabet Inc.’s search engine, the biggest tech monopoly case since Microsoft in the 1990s. The move marks the halfway point in the 10-week trial, after which Google gets to present a defense against the allegations and perhaps explain why it pays rivals to use the search technology it argues is simply superior.
Judge Amit Mehta isn’t expected to issue a decision until next year, though any resolution to the case is expected to drag out for years with appeals and a possible second trial to establish a remedy if the Justice Department wins.
Over the past five weeks, Mehta has heard dozens of analogies about the search giant and its place in modern life for consumers and the companies trying to reach them. Google is a door or a gateway. It’s the only ferry to the island. It’s a card catalog to the infinite library that is the internet.
The Justice Department alleges the company has used its prime position to extract more and more money from advertisers – often by making opaque changes to the rules that control the ad auctions in which companies participate.
The government has done “a solid job” laying out its case, said Bloomberg Intelligence analyst Jennifer Rie, who has been monitoring the trial. “One of the toughest hurdles for Google, once it starts its case-in-chief, is reconciling why it pays so much,” she said. Google is set to begin its defense on Oct. 26.
Mehta himself acknowledged “the heart of the case,” rests on one default deal in particular: Google’s 21-year partnership with Apple.
When the deal was first signed in 2002, it allowed Apple to use Google to power its Safari search for free. Over time the agreement evolved into a revenue-share where Google pays Apple a percentage of advertising sales. The Justice Department cited estimates that put the figure Google pays Apple at between $4 billion and $7 billion a year, though exact figures aren’t public.
Google and Apple say the agreement is “highly confidential” and details have dribbled out slowly because the judge allowed much of the testimony in the first two weeks to take place behind closed doors.
Testimony from Apple executives – John Giannandrea, the AI and machine learning head who defected from Google in 2018, and Cue, who negotiated the most recent version of the deal – defended the agreement because the company believes Google’s search engine offers the best results. The agreement also requires that Apple “support and defend” the deal in the face of regulatory challenges, Cue testified.
The Justice Department alleges the agreement prevents Apple from competing head-on with Google in search, even though the companies are each other’s biggest rival for mobile phones. For more, read the full BNN Bloomberg report.
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