May 23, 2024

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As the Google search experiment ends, the Department of Justice is seeking penalties for the missing messages

As the Google search experiment ends, the Department of Justice is seeking penalties for the missing messages

The fate of Google’s search business is now in the hands of Judge Amit Mehta, as closing arguments in the landmark trial conclude on Friday.

The Justice Department and the plaintiff states filed their final arguments Thursday regarding Google’s alleged anticompetitive behavior in the general search market, and on Friday focused on its alleged illegal conduct in search advertising. Google has also been criticized (separately) for failing to preserve chat messages that the Justice Department believed might be relevant to the case.

The government is trying to show that Google has closed the main distribution channels for the general search engine market, so that potential competitors do not turn into major threats. It says it did this through contracts concluded with phone manufacturers and browser companies to be its exclusive default search engine. If the judge agrees that Google has successfully prevented competition in that market, he or she can consider the government’s arguments about the search ad market to be evidence of anticompetitive behavior.

In his summary, Justice Department lawyer Kenneth Dentzer said the latest major decision related to a technology monopoly, United States v. Microsoft, “fits like a glove” on Google. Google’s lead plaintiff in this case, John Schmidtlin, disagreed. in MicrosoftManufacturers were forced to cut deals and customers were fed a lower-quality product they didn’t want, he said. “Google won with a superior product,” he said.

“The significance and importance of this case has not escaped my mind,” Mehta said as the court proceedings concluded on Friday. “Not just for Google, but for the public.”

A suitable alternative to Google Ads

If Google charges higher prices for ads, are there suitable alternatives that advertisers could resort to? The answer to that question could say a lot about whether Google has the monopoly power that the Department of Justice claims it has created through contracts that it must be the default search engine on various browsers and devices. Google says there are plenty of alternatives for advertisers; The government does not agree.

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Mehta seemed sympathetic to the government’s arguments, although he acknowledged that Google alternatives represent powerful advertising companies in their own right. Amazon, for example, is not an inferior alternative to Google for advertising, Mehta said. Unlike wrapping the sandwich in newspaper Instead of cellophane“If you move your ad money from Google to Amazon, you’re not wrapping your ad in a newspaper,” Mehta said.

But Mehta later differentiated advertising platforms like Facebook and TikTok from Google. Users searching on Google get a solid idea of ​​what they are looking for, and this is largely spelled out in the query. Social media platforms often have to infer that intent through indirect signals.

In 2017, Google ran an experiment over several weeks and found that it could increase prices by 5 to 15 percent while still increasing revenue.

In 2017, Google conducted an experiment over several weeks and found… You can increase prices by 5 to 15 percent and still increase revenue. “Google is able to determine what margin they’re going to get,” Mehta said. “That’s why they run experiments to say, ‘Okay, if we increase revenue by 15 percent, how much are we going to lose in revenue?'” Mehta told Schmittlein. “That’s something only a monopolist can do, right?” Schmidtlen disagreed, saying it was fair to conduct pricing experiments to see if they were charging the right price.

“There is no evidence that Google ever looks at competitors’ prices” for this purpose, Mehta noted. Schmidtlin replied that it was not that simple. Because ads are sold through a complex auction, not even Google has full visibility into the pricing mechanism behind them. It’s simply not like the Coca-Cola representative wandering into a grocery store to see Pepsi prices.

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Subverting ads on Bing

The plaintiff states — attorneys general in 38 states led by Colorado and Nebraska that filed the suit alongside the Justice Department — also argue that Google intentionally dragged its feet when creating certain features for SA360, its search engine marketing tool. Search Ads 360 helps advertisers manage ads across different platforms — not just Google, but competitors like Microsoft’s Bing.

The states say Google defaulted on creating the SA360 feature for Bing Ads when it had already implemented it for Google Search Ads.

“The evidence here is a little tough for Google,” Mehta said, noting the importance of Google initially saying publicly that it would “not play favorites” when it came to SA360. Although Google could have chosen to exclude Microsoft from the tool initially, “that was not the choice it made,” Mehta said.

The tool was not delivered for nearly five years after Microsoft ordered it. “How can you not at least conclude that it is anti-competitive?” asked Mehta.

Deleted chats

Hanging over the entire case is the question of whether Google intentionally deleted or failed to preserve documents that may have been used as evidence in this trial.

Google had a policy of “turning history off” in its conversations by default, leaving it up to employees to decide when to turn it on for relevant conversations. The Justice Department’s Dentzer called the alleged destruction of documents “unequivocal and frankly astonishing.” He added that there was “no doubt” that the executives “deliberately had conversations with history.”

“Google’s document retention policy leaves a lot to be desired,” the judge said, adding with dismay that “it is surprising to me that the company leaves it to its employees to decide when to retain documents.”

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“Google’s retention policy leaves a lot to be desired”

Shortly after, Dentzer’s slide deck paused on a slide that simply read “This is a mistake,” as the DOJ attorney pointed out that Google has never apologized for the unsaved documents and has not promised not to do so again in the future. He said it was necessary for the court to impose sanctions that would show that the risk of destroying documents was not worth it. The Justice Department is asking Mehta to make an adverse finding on Google regarding any element of the case where he does not believe prosecutors have sufficient evidence. This means that the judge will assume that any deleted conversations would have harmed Google and would demonstrate its anti-competitive intent behind its contracts with browser manufacturers. The Justice Department also wants Mehta to take the destructive chats as a sign of its anti-competitive intent.

Google’s lawyer, Colette Connor, said that the company’s lawyers informed the state of Texas (one of the plaintiffs) early on about their retention policies. Dentzer said this revelation came months after the lawsuit was pending, and that the Justice Department would have acted “clearly” had it known.

Mehta doesn’t appear to be buying Google’s defence. “It’s interesting to me that Google has been very intentional — and perhaps after seeing what happened with Microsoft — very intentional in advising employees on what they shouldn’t say,” he said. In training for employees, the company advised avoiding terms such as “market share.” (Bloomberg Law He noticed This is common practice In large companies.)

It is now up to Mehta to decide how to count those absent chats. He didn’t provide a timeline for his decision, but in the meantime, Google and the Justice Department are preparing for a second antitrust showdown over ad tech in the fall.