As Google Search Trial Ends, DOJ Seeks Penalties Over Missing Posts

The fate of Google's search business is now in the hands of Judge Amit Mehta, closing arguments in Friday's landmark trial concluded.

The Justice Department and the state plaintiffs presented their final arguments Thursday. Google's alleged anti-competitive behavior in the general search market, and focused Friday on his allegedly illegal conduct in search advertising. Google was also criticized (separately) for failing to preserve chat messages that the DOJ said might have been relevant to the case.

The government is trying to show that Google has locked down key distribution channels for the general search engine market, so that its potential competitors cannot become significant threats. It claims to have done this through contracts with phone makers and browser companies to become their exclusive default search engine. If the judge accepts that Google has succeeded in excluding competition in this market, he may consider the government's arguments regarding the search advertising market as evidence of anticompetitive behavior.

In his summary, DOJ attorney Kenneth Dintzer said the latest major tech monopoly ruling, United States v. Microsoft, “fits like a glove” on Google. Google's lead litigator in the case, John Schmidtlein, disagrees. In MicrosoftHe said manufacturers were forced into deals and customers were spoon-fed an inferior product they didn't want. “Google won with a superior product,” he said.

“The importance and significance of this case is not lost on me,” Mehta said at the conclusion of Friday’s court proceedings. “Not just for Google, but for the public.”

If Google charges higher prices for advertising, are there suitable substitutes that advertisers would turn to? The answer to this question may say a lot about whether or not Google has the monopoly power that the DOJ claims it has created through contracts that it must be the default search engine on various browsers and devices. Google says there are many alternatives for advertisers; the government disagrees.

Mehta seemed to sympathize with the government's arguments, even as he acknowledged that alternatives to Google were strong advertising companies in their own right. Amazon, for example, isn't exactly an inferior substitute for Google when it comes to advertising, Mehta said. Unlike wrapping a sandwich in newspaper instead of cellophaneMehta said: “If you move your advertising money from Google to Amazon, you don't wrap your ad in a newspaper. »

But Mehta then differentiated advertising platforms like Facebook and TikTok from Google. Users searching on Google get a clear idea of ​​what they are looking for by roughly stating it in the query. Social media platforms often have to infer this intent from indirect signals.

In 2017, Google conducted an experiment over several weeks and discovered this could increase prices by 5 to 15 percent while increasing revenues. “Google is able to decide how much margin it will acquire. And that's why they run experiments to say, “Well, if we increase revenue by 15%, how much are we going to lose in revenue?” “, Mehta told Schmidtlein. “That’s something only a monopolist can do, right?” » Schmidtlein disagrees, saying it's fair to conduct pricing experiments to determine if they're charging the right price.

Mehta stressed that there was “no evidence that Google is reviewing a competitor's prices” for this purpose. Schmidtlein replied that it was not that simple. Since ads are sold through complex auctions, even Google doesn't have full insight into the pricing mechanism behind it. It's just not the same as a Coca-Cola rep walking into a grocery store to see Pepsi prices.

The plaintiff declares — the attorneys general of 38 states led by Colorado and Nebraska who filed suit alongside the DOJ – also argue that Google intentionally dragged its feet when creating certain features of SA360, its search engine marketing tool. SA360 helps advertisers manage their ads across different platforms, not just Google, but also competitors like Microsoft's Bing.

The states claim that Google was late in creating SA360 functionality for Bing ads when it had already implemented it for Google search ads.

“The evidence here is a little tricky for Google,” Mehta said, emphasizing the importance of the fact that Google said quite publicly early on that it was “not going to play favorites” when it came to SA360. Although Google could have chosen to exclude Microsoft from the tool from the start, “that's not the choice they made,” Mehta said.

The tool didn't ship for nearly five years after Microsoft requested it. “How can we not at least deduce that this is anti-competitive? » » asked Mehta.

The question of whether Google intentionally deleted or failed to preserve documents that could have been used as evidence in this lawsuit looms large over the entire case.

Google had a policy of disabling “history” on its chats by default, leaving it up to employees to determine when to enable it for relevant conversations. The DOJ's Dintzer called the alleged destruction of documents “unequivocal and honestly mind-boggling.” He added that “there is no doubt” that leaders “intentionally had conversations without considering history.”

“Google's retention policy leaves much to be desired,” the judge said, adding disapprovingly that it was “surprising that a company would leave it up to its employees to decide when to retain documents.”

Shortly after, Dintzer's slideshow stopped on a slide that simply said, “This is false,” as the Justice Department lawyer pointed out. Google has never apologized for the unpreserved documents or promised not to do it again in the future. He said it was imperative that the court impose sanctions demonstrating that the risk of document destruction is not worth it. The DOJ is asking Mehta to make an adverse finding against Google for any part of the case for which it believes the plaintiffs lack sufficient evidence. This would mean the judge would assume that any deleted discussion would have been bad for Google and would have shown its anticompetitive intent behind its contracts with manufacturers and browsers. The DOJ also wants Mehta to view the destroyed discussions as a signal of his anticompetitive intent.

Google attorney Colette Connor said the company's lawyers informed the state of Texas (one of the plaintiffs) about their retention policies early on. Dintzer even said the disclosure occurred months after the trial and that the DOJ “clearly” would have acted if it had known.

Mehta does not appear to have bought into Google's defense. “It's interesting to me that Google was very deliberate – and maybe after seeing what happened with Microsoft – very deliberate in advising its employees what not to say,” he said. -he declares. During employee training, the company advised avoiding terms like “market share.” (Bloomberg Law noted This is a common practice in large companies.)

It is now up to Mehta to decide how these absent discussions should be taken into account. He did not provide a timeline for his decision, but in the meantime, Google and the DOJ will prepare their decision. second antitrust showdown over ad tech in fall.