Mike Scarcella
WASHINGTON (Reuters) – Google and the U.S. Justice Department clashed in court on Friday over allegations that the Alphabet (NASDAQ:) unit illegally planned to dominate search advertising, during closing arguments in a case that the government said could define the “future of the Internet.” “
U.S. District Judge Amit Mehta in Washington questioned both sides, testing whether rival platforms such as ByteDance and Facebook’s TikTok and Meta’s Instagram are competitive substitutes for search advertising dollars.
Mehta called the platform’s “displacement” for advertisers a central issue the court must decide as it prepares to make a major decision in the coming months on whether Google’s behavior violates antitrust laws.
The judge also questioned whether Google evaluates competitors’ prices before making its own adjustments. Google’s advertising business accounts for about three-quarters of its revenue.
US government lawyer David Dahlquist argued that “advertising revenue is what gives Google its monopoly power today.”
Google has boasted that it doesn’t put any real pressure on the market, Dahlquist said, arguing that the company isn’t afraid to raise prices or fail to improve its products. “Only a monopolist can make a product worse and still make more money,” Dahlquist argued.
Google lawyer John Schmidtlein countered Friday that Google’s share of U.S. digital advertising revenue has been steadily declining. He touted the advertising power of rival platforms TikTok from ByteDance, Facebook and Instagram from Meta, and Amazon.
Schmidtlein argued that Google is “constrained” by competing platforms “where the eyeballs are” because advertisers know that audiences overlap and can spend money away from Google.
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He also said that Google is constantly improving its search advertising products. “If Google is a monopolist, why improve anything? Why not just raise the price?” he told the court.
The Justice Department has taken on Google in a lawsuit that began Sept. 12, arguing that the search engine giant is a monopolist that has illegally abused its power to increase profits.
Witnesses from Verizon (NYSE:), Android maker Samsung Electronics (KS:) and Google itself described the company’s annual payments ($26.3 billion in 2021) to make its search the default feature on smartphones and browsers. and also for maintaining a dominant position in the market. share.
On Friday, Mehta is expected to support the government’s claim that Google intentionally destroyed internal documents related to the issues addressed in the lawsuit. The government wants Mehta to suggest that Google removed chats that were not beneficial to the company.
Google defended its data retention practices as reasonable and urged the court not to sanction the company.
The court is not expected to issue an oral decision at the conclusion of the dispute.
The case, brought by former President Donald Trump’s administration, was the first of five aimed at curbing the market power of tech leaders.
A second case against Facebook’s parent company Meta was also filed during the Trump administration. President Joe Biden’s antitrust regulators have filed a second case against Google, as well as cases against Amazon.com (NASDAQ:) and Apple Inc (NASDAQ:).