The US Justice Department advanced its antitrust lawsuit against Google on Wednesday, interrogating a former employee about deals he helped negotiate with phone providers in the 2000s.
Chris Barton, a Google employee from 2004 to 2011, said that he made it a point to negotiate Google’s position as the default search engine on mobile devices. In exchange, phone service providers or manufacturers were given a portion of the cash made when customers clicked on advertisements.
The government is contending in the largest antitrust lawsuit in a quarter-century that Google manipulated the market in its advantage by locking in its search engine as the one consumers see first on their gadgets, cutting out competitors and suffocating innovation.
Google replies that it is the market leader in internet search because its product is superior to the competitors. Even though it is the default search engine on smartphones and other devices, it claims, users may easily switch to competitor search engines with a few clicks.
According to Antonio Rangel, a behavioral economist at the California Institute of Technology who testified for the government, this is not so simple. He claims that Google’s default settings hinder consumers from switching to other search engines. And, he claims, customers are typically hesitant to modify habits that have become established.
Challenging Google’s Simplicity Claims: The Complexity of Switching to Another Search Engine
Rangel also contested Google’s claim that moving to another search engine is simple. He claimed to have purchased an Android 12 phone and examined the process of switching from Google to Bing, which he said took ten steps. “There is significant choice friction,” he remarked.
He also demonstrated the power of defaults. Only 12% of persons in Germany who must actively choose whether to be organ donors do so. In Austria, where organ donation is the default choice, the figure is 99%.
However, Barton said that Google was not the only search engine vying for default position with phone carriers.
In an email discussion in 2011, Google officials said that AT&T picked Yahoo as their search engine, while Verizon chose Microsoft’s Bing.
“I faced a challenge because mobile carriers became fixated on revenue share percentages,” Barton explained on Wednesday. To compete, he attempted to persuade potential partners that Google’s high-quality searches would result in more clicks — and so more advertising income — even if the carriers were paid a nominally smaller proportion.
Google has established itself as the leading player in online searches, accounting for around 90% of the market. During the Trump administration, the Justice Department launched an antitrust action against Google, saying that the firm used its internet search dominance to acquire an unfair advantage over competitors.
The experiment, which started on Tuesday, is scheduled to run 10 weeks.
A verdict from U.S. District Judge Amit Mehta is unlikely until early next year. If he finds that Google violated the law, a new trial will be held to determine what actions should be done to rein in the Mountain View, California-based business.
Top officials from Google and Alphabet Inc., as well as other strong technology companies, are slated to testify. Alphabet CEO Sundar Pichai, who succeeded Google co-founder Larry Page four years ago, is expected to be among them. Court filings also indicate that Eddy Cue, a senior Apple official, may be summoned to testify.
The Justice Department also questioned Google chief economist Hal Varian for a second day on Wednesday about how the firm utilizes huge quantities of data generated by user clicks to optimize future searches and maintain its competitive edge.
Source: ABC News