Google pays $10 bn a year to maintain monopoly: US Justice Department

By Leah Nylen and Davey Alba

Alphabet Inc.’s Google pays more than $10 billion a year to maintain its position as the default search engine on web browsers and mobile devices, stifling competition, the US Justice Department said Tuesday at the start of a high-stakes antitrust trial in Washington.
 

“This case is about the future of the internet and whether Google’s search engine will ever face meaningful competition,” Kenneth Dintzer, a government lawyer, said in his opening statement. “The evidence will show they demanded default exclusivity to block rivals.”

Dintzer said Google became a monopoly by at least 2010 and today controls more than 89% of the online search market. “The company pays billions for defaults because they are uniquely powerful,” he said. “For the last 12 years, Google has abused its monopoly in general search.”

The monopolization trial is the first pitting the federal government against a US technology company in more than two decades. The Justice Department and 52 attorneys general from states and US territories allege Google illegally maintained its monopoly by paying billions to tech rivals, smartphone makers and wireless providers in exchange for being set as the preselected option or default on mobile phones and web browsers.

Attorneys for Google, which has denied the government’s claims, will present their opening statements later Tuesday.

This first phase of the trial will assess whether Google has illegally monopolized the online search market. US District Judge Amit Mehta, who is overseeing the trial, is expected to issue a decision next year on whether Google broke the law. If the Justice Department wins, it may seek remedies at the second phase of the trial to break off Alphabet’s search business from other products, like Android and Google Maps, which would mark the biggest forced breakup of a US company since AT&T was dismantled in 1984.

The company has faced a number of probes related to the same conduct overseas including three EU cases, in which the company has racked up more than €8 billion ($8.6 billion) in fines, for abuses of dominance on its mobile operating system, its search business and its display advertising operations.

Kent Walker, Google’s chief legal officer, attended opening statements, seated in the front row behind the company’s lawyers. Assistant Attorney General for Antitrust Jonathan Kanter also attended on behalf of the Justice Department.

The case is: US v. Google, 20-cv-3010, US District Court, District of Columbia.