A lawsuit brought against Google for unfair trade practices was heard in court for the first time this week.
The suit was brought by the U.S. Department of Justice (DoJ), which alleges Google broke competition laws by shutting out its search engine competitors from browsers and phones.
The DoJ first filed the suit three years ago. The court case, held in Washington, D.C., is closed from public viewing and could last for several weeks.
Why is Google being sued?
The DoJ argues Google has tried to stifle its competitors by making itself the default search engine on a range of computers, phones and browsers (e.g. Apple’s Safari).
They allege Google pre-installs these search features and makes them impossible to delete.
The DoJ alleges Google has signed exclusivity agreements with some platforms to stop any other search engines from being pre-installed.
It argues these practices breach laws designed to protect consumers by ensuring fair competition.
Google’s revenue sharing agreements
These exclusivity contracts are called Revenue Sharing Agreements (RSAs). As the name suggests, RSAs involve Google sharing a portion of its ad revenue with platforms, typically in exchange for exclusivity.
Google has RSAs with all popular tech providers, including Apple and Android products.
The DoJ argues these efforts to gain an advantage are in breach of laws designed to ensure fair competition for the benefit of consumers.
Google pays billions of dollars every year for its RSAs.
The DoJ alleges these agreements and other anti-competitive practices have prevented “any meaningful search competitor from gaining vital distribution and scale, eliminating competition for a majority of search queries in the United States… [this] has harmed consumers by reducing the quality of search”.
The lawsuit says Google accounts for almost 90% of search queries in the U.S.
Google’s response to the lawsuit
Google denies the claims made by the DoJ. They called the lawsuit “deeply flawed” after it was filed in 2020. Google argued it would “do nothing” to raise competition.
In court yesterday, Google argued consumers could easily change any default settings the company had negotiated with device or browser companies.
The DoJ wants Google to be stopped from engaging in the “exclusionary” practices it alleges in the lawsuit.
This could include stopping many of their RSAs. That would have significant implications for how search engines are offered on devices.
They’ve also asked for Google to be fined for the damages it caused by undermining competition, and ensure measures are inserted that can restore the competitive environment.