In the trial that began on September 12, the US Justice Department sought to prove that Google is a monopolist and illegally abused its power to gain profits for itself.
Photo: Reuters
However, Judge Amit Mehta of the District Court for the District of Columbia said he had not yet decided how to rule. “I don’t know what I’m going to do,” he said after delivering closing arguments in early May.
MIT economics professor Michael Whinston, one of the original suitors, said Google’s payments to Apple and others, totaling $26.3 billion in 2021, were in fact just monopoly profits. “Google has made a lot of money from these contracts,” he said.
Alphabet, Google's parent company, reported net income of $19.69 billion for the July-September 2023 period, up from $13.91 billion in the same period a year earlier. Total revenue was $76.69 billion in the third quarter.
Professor Whinston said the monopoly made it easy for Google to raise advertising prices without fear of losing revenue or profits. “They found that it was profitable to raise prices every time,” he said.
From there, he argues that Google's dominance of nearly 90% of the US search market means it has little incentive to improve quality.
However, John Schmidtlein, a lawyer for Google, reiterated one of Google's main defenses during the trial that the payments were legitimate revenue-sharing agreements.
He also stressed that Google dominates the market because of its superior quality. He pointed to some reviews of Samsung phone users who said they were unhappy that Microsoft's Bing was the default search engine on their phones.
Hoang Hai (according to Reuters)
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