The U.S. Department of Justice sued Google’s web search service monopoly trial. According to the evidence, more than 20 years ago, Google just started to become a dark horse in the search market, when Google executives made a series of plans to beat the competitors, including in as many web browsers as possible, so that Google search as the default search service.
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Evidence provided by the U.S. Department of Justice shows that in July 2003, Hal Varian, then Google’s chief economist, sent a warning e-mail to management, warning that Microsoft’s plan to integrate its own web search service into the Windows operating system would pose a serious threat to Google Search.
At a time when Google was planning a variety of Internet products, Varian cautioned that it should also consider ways to retain users.
So far, Varian said, when Google plans a new product, it considers more technical advantages, user value, potential revenue and other indicators. He argued that while providing a great product is a top priority, Google should also consider rivals’ barriers to entry, switching costs for users, intellectual property rights and other issues.
In Tuesday’s trial, the U.S. Department of Justice (DOJ), as the plaintiff, had Varian testify in court. The Justice Department said that in order to maintain its monopoly in the web search market, Google has provided more than $10 billion a year to rivals, smartphone makers, and mobile communication service providers to set Google as the default search in smartphones or web browsers.
At the start of the trial, U.S. Department of Justice attorney Kenneth Dintzer said the lawsuit is about the future of the search engine market and whether Google search will encounter substantial competitors in the future. The available evidence suggests that Google set up default searches with the goal of suppressing competitors, and so far Google has monopolized 89% of the web search market.
Signs of monopolizing the market
Varian revealed in court on Tuesday that Google’s internal team has been tracking the market share of its own searches for many years, using four internal metrics as well as data provided by third-party market research firms such as Comscore.
Allegedly, as a sign that it had cornered the search market, in 2014 Google’s management decided to stop publishing tracking reports on search market share because the data no longer meant much to Google.
The lawsuit, whose presiding judge is Amit Mehta, is the first time in over 20 years that the U.S. Department of Justice has sued a U.S. technology company.
The trial of the lawsuit will last ten weeks, and if Judge Mehta rules that Google maintains a monopoly in the search market by illegal means, the US Department of Justice will ask the court to order further remedies to break up Google’s monopoly, including divesting Google’s web search engine from other businesses in the same family, such as the Android operating system and Google’s mapping business. If that goal is achieved, it would be the largest divestiture penalty suffered by a U.S. company since U.S. telecom giant AT&T was spun off in 1984.
In response to the Justice Department’s allegations, Google has countered that the company has captured such a high share of the search market because of product excellence, not a lack of competitors to challenge it.
On Tuesday, John Schmidtlein, a member of Google’s legal team, said that consumers use Google search because the product provides value, not because they have to. The attorney emphasized that today’s consumers actually have numerous options for search services and access to information on the Internet compared to the past.
The court’s evidence showed that in 2007, Google executives were considering making the search service more prominent on the homepage to stimulate use and increase market share. The evidence referred to an executive meeting on this element, which included Varian and Pichai (then head of product development at Google and today CEO of Google).
On the witness stand, Varian acknowledged that the Google search service benefited greatly from being the default search in web browsers. He said that overall, being the default search engine was valuable, for Yahoo search, for Microsoft search, and for Google search.
On Wednesday, US time, another key witness
