The United States government wrapped up its main arguments against Alphabet, Google’s parent company, on Thursday.
The trial, initiated by the Justice Department, aims to establish Google’s alleged monopoly and abuse of power in the online search market. Similar antitrust cases against tech giants have unfolded in Europe, where Google’s business practices are also under scrutiny.
Since September, the US government has meticulously presented its case in an effort to prove that Google, the leading online search provider, is violating antitrust laws to maintain its dominant position.
This case, initially filed by the Trump administration, is the first of four targeting major tech companies. The second case, filed against Meta, also occurred during the Trump administration, while President Biden’s antitrust enforcers have since initiated a second case against Google and one against Amazon.
Michael Whinston, an economics professor at the Massachusetts Institute of Technology (MIT), took the stand on Thursday as the government’s final witness. He underscored key points in the government’s case, challenging Google’s assertion that it must compete with Microsoft for exclusive pre-installation on smartphones. Whinston argued that Google’s substantial payments to companies like Apple, totaling $26.3 billion in 2021, were essentially monopoly profits paid to distributors.
Alphabet, in its recent financial report, revealed a net profit of $19.69 billion for the third quarter of 2023, a notable increase from $13.91 billion during the same period last year.
Whinston further contended that Google possessed the market power to raise advertising rates without fear of losing advertisers, citing experiments conducted by the company. He emphasized that Google’s nearly 90% market share in the U.S. meant it had little incentive to enhance the quality of its services. According to Whinston, “When there’s not a competitive threat, they’re not making that investment. And quality is lower.”
John Schmidtlein, representing Google in the trial, reiterated the company’s stance that the payments under scrutiny were legal revenue-sharing deals resulting from competition. He asserted that these deals were crucial for ensuring proper updates and maintaining user data security, constituting a primary pillar of Google’s defense throughout the trial.
Source: Euro News