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US criticizes Google for paying $10 billion a year to kill search competitors

The Justice Department and 38 states and territories on Tuesday revealed how Google systematically used its power over online search to target cow competitors, despite the Internet giant’s fierce criticism of its opening remarks. The most consequential test on technical strength In the modern internet age.

In a packed courtroom at the E. Barrett Prettyman U.S. Courthouse in Washington, the Justice Department and states presented a picture of how Google had used its deep pockets and dominant position, and perpetrated the crime, to oust Apple and others from becoming the default search provider. Had paid $10 billion a year. On smartphone. The government said Google saw those agreements as a “powerful strategic weapon” to eliminate rivals and strengthen its search engine.

“This feedback loop, this wheel has been turning for more than 12 years,” said Kenneth Dintzer, the Justice Department’s chief court lawyer. “And it always turns out to Google’s advantage.”

Google denied that it had illegally used the agreements to edge out its search competitors and said that it had merely provided a better product, adding that people could easily change which search engine they were looking for. Use search engines. The company also said that Internet searches are more widespread than its normal search engines and pointed to the many ways that people now find information online, such as Amazon for shopping, TikTok for entertainment And Expedia for travel.

“Today users have more search options and more ways to access information online than ever before,” said Google attorney John E. Schmidtlein.

What followed was a back-and-forth in the federal government’s first monopoly trial Tried to break Microsoft More than two decades ago. it Case – US et al. v. Google – is about to have a profound impact not only on the Internet giant but also on a generation of other big tech companies that are beginning to influence the way people shop, communicate, be entertained, and work.

Over the next 10 weeks, Government and Google Arguments will be presented and dozens of witnesses will be questioned to find out how the company came to power and whether it broke the law to maintain and extend its dominance. The final ruling by Judge Amit P. Mehta of the U.S. District Court for the District of Columbia could change the balance of power in the tech industry, which is embroiled in a race to artificial intelligence that could transform and disrupt people’s lives.

A government victory could set limits on Google and change its business practices, sending a sobering message to other tech giants. If Google wins, it could act as a referendum on increasingly aggressive government regulators, raising questions about the effectiveness of centuries-old antitrust laws and encouraging more Silicon Valley expansion.

Bill Baer, ​​a former top antitrust official at the Justice Department, said, “This is a test of whether our existing antitrust laws – written in the Sherman Act of 1890 – can be adapted to markets that are susceptible to monopoly in the 21st century ” That Google was “undeniably powerful”.

The case is part of a broader effort by the Biden administration and states to rein in the biggest tech companies. Department of Justice has filed a second lawsuit A lawsuit could be filed against Google over its advertising technology as early as next year. The Federal Trade Commission is moving toward a separate trial. Antitrust case against Meta, An investigation into those efforts is underway, which could lead to antitrust cases. Amazon And apple.

The Justice Department filed a case in October 2020 accusing Google of illegally maintaining its dominance in search. Months later, a group of attorneys general from 35 states, Puerto Rico, Guam, and the District of Columbia filed their own lawsuit, arguing that Google had abused it. Monopoly on search. Judge Mehta is considering both the cases during the hearing.

The case focuses on agreements that Google made with browser developers, smartphone makers, and wireless carriers to use Google as the default search engine on their products. Since the lawsuit was filed, more than five million documents and statements from more than 150 witnesses have been submitted to the court. Judge Mehta last month limited the scope of the lawsuitWhile the findings allowed the main claims of monopoly abuse to remain.

The trial began Tuesday in Courtroom 10 of the federal courthouse in Washington, just minutes from Capitol Hill. It drew a large crowd, with some people lining up to enter as early as 4:30 a.m. Executives from Google rivals Yelp and Microsoft also attended, along with dozens of others from the Justice Department, states and Google over the years. Lawyers and employees also participated. Work on the case.

Judge Mehta started the proceedings on time. In the government’s opening statement, Mr Dintzer focused on the search agreements Google has made with Apple and others. He cited internal company documents detailing how Google would not share revenue with Apple without “default placement” on its devices and how it worked to ensure that Apple would allow searches on its Siri assistant. Could not redirect.

“Your Honor, this has a monopolistic bent,” Mr. Dintzer said.

In blunt language, Mr. Dintzer also argued that Google had tried to hide the documents from antitrust enforcers by including lawyers in conversations and marking them subject to attorney-client privilege. They showed a message from Google Chief Executive Sundar Pichai asking to turn off chat history in a conversation.

“They shut down history, your honor, so they can rewrite it in this courtroom,” Mr. Dintzer said.

William Cavanaugh, the states’ lawyer, reiterated Mr. Dintzer’s concerns about Google’s agreements to become the default search engine on smartphones. He said Google limited the product’s ability to be used to advertise on other search engines to hurt Microsoft, which makes the Bing search engine.

In response, Mr. Schmidlein, Google’s lawyer, argued that the company’s default agreements with browser makers do not lock up the market in the way the Justice Department had said. Browser makers like Apple and Mozilla both promote other search engines, he said, and it’s easy for users to switch their default search engine.

Using a slideshow, Mr. Schmidlein demonstrated the number of taps or clicks required to change the default on popular smartphones. People who want to change their search engine but don’t know how search Google for instructions or watch video tutorials on Google-owned YouTube, he said.

He said the government’s evidence was coming from emails “in snippets and out of context”.

Lawyers were also debating whether Google is as influential as the government has claimed. The Justice Department and the states said Google competes primarily with comprehensive search engines that act as a single place to look for many types of information. But Mr. Schmidlein said Google’s competitors are wide-ranging, including online retailers like Amazon, food delivery apps like DoorDash and travel booking sites like Expedia.

In the afternoon, the Justice Department called Google’s chief economist Hal Varian as the first witness to establish that the company had long known about its power in search and was deliberately trying to sidestep the antitrust investigation.

In more than three hours of testimony, Mr. Varian was asked about views he shared with other Google employees about the power of defaults, the threat of Microsoft’s entry into search, and his awareness of language that could lead to criticism from antitrust regulators. Can attract attention. The Justice Department took inspiration from Mr. Varian’s emails and memos in the early 2000s.

Mr. Varian is scheduled to return to the witness stand on Wednesday.

Nico Grant And steve lohr Contributed to the reporting.

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