As the Antitrust Case Against Google Comes to a Close, the Justice Department is Calling for Sanctions Over Missing Messages

The fate of Google’s search business now rests in the hands of Judge Amit Mehta, closing arguments in the landmark trial concluded Friday.

The Justice Department and plaintiff states made their final arguments on Google’s alleged anticompetitive conduct in the general search market on Thursday and focused on Google’s alleged unlawful conduct in search advertising on Friday. Google also came under fire (separately) for failing to store chat messages that the Justice Department said could be relevant to the case.

The government is trying to prove that Google has blocked key distribution channels to the general search engine market so that potential competitors cannot become significant threats. It said it did this through deals with phone makers and browser companies to become their exclusive default search engine. If the judge agrees that Google has successfully foreclosed competition in this market, he may consider the government’s arguments about the search advertising market as evidence of anticompetitive behavior.

In his summary, DOJ attorney Kenneth Dintzer said the last major technology monopoly decision, USA versus Microsoft, “fits like a glove” on Google. Google’s lead trial attorney in the case, John Schmidtlein, disagreed. In MicrosoftHe said manufacturers were being forced into business and customers were being saddled with an inferior product they didn’t want. “Google won with a superior product,” he said.

“The importance and importance of this case is not lost on me,” Mehta said as he concluded court proceedings on Friday. “Not just for Google, but for the public.”

If Google charges higher prices for advertising, are there suitable substitutes that advertisers would flee to? The answer to that question can say a lot about whether Google has the monopoly power that the DOJ says it has created through the contracts that require it to be the default search engine across different browsers and devices. According to Google, there are numerous alternatives for advertisers. The government disagrees.

Mehta seemed to agree with the government’s arguments, but acknowledged that alternatives to Google are themselves robust advertising companies. Amazon, for example, is not exactly an inferior replacement for Google when it comes to ads, said Mehta. As opposed to wrapping a sandwich in newspaper instead of cellophane, Mehta said, “If you’re moving your advertising money from Google to Amazon, don’t wrap your ad in newspaper.”

However, Mehta later distinguished advertising platforms like Facebook and TikTok from Google. Users who search on Google have a clear idea of ​​what they are looking for and essentially spell it out in the search query. Social media platforms often have to infer this intent from indirect signals.

In 2017, Google conducted an experiment lasting several weeks and found that it could increase prices by five to 15 percent while increasing sales. “Google can decide what margin they want to make. And so they do experiments to say, ‘If we increase sales by 15 percent, how much are we going to lose in revenue?'” Mehta told Schmidtlein. “That’s something only a monopolist could do, right?” Schmidtlein disagreed, saying it was fair to conduct pricing experiments to see if they were charging the right price.

To this end, Mehta pointed out that there is “no evidence that Google ever investigates a competitor’s prices.” Schmidtlein replied that it wasn’t that easy. Because ads are sold through a complicated auction, not even Google has complete insight into the pricing mechanism behind them. It’s just not the same as a Coca-Cola representative walking through a grocery store to look at Pepsi prices.

The plaintiff states — the attorneys general of 38 states, led by Colorado and Nebraska, which filed the lawsuit alongside the DOJ — also argue that Google intentionally took too long to develop certain features for SA360, its search engine marketing tool. SA360 helps advertisers manage ads across multiple platforms – not just Google, but also competitors like Microsoft’s Bing.

The states say Google lagged behind in developing a SA360 feature for Bing ads when it had already implemented it for Google Search ads.

“The evidence here is a little difficult for Google,” Mehta said, noting how significant it was that Google had said quite publicly at the outset that it would “not play favorites” when it came to SA360. While Google could have chosen to exclude Microsoft from the tool from the start, “they didn’t make that decision,” Mehta said.

The tool wasn’t delivered for almost five years after Microsoft asked for it. “How can you not at least conclude that it is anti-competitive?” Mehta asked.

The question hanging over the entire case is whether Google intentionally deleted or failed to retain documents that could have been used as evidence in this trial.

Google had a policy of turning off history in its chats by default, leaving employees to decide when to turn on history for relevant conversations. The DOJ’s Dintzer called the alleged destruction of documents “clear and frankly breathtaking.” He added that “there is no question” that executives “intentionally had conversations that ignored history.”

“Google’s retention policies leave much to be desired,” the judge said, adding disapprovingly that it “was surprising to me that a company would allow its employees to decide when to retain documents.”

Shortly thereafter, Dintzer’s slide deck stopped at a slide that simply said “This is wrong,” as the DOJ attorney pointed out that Google never apologized for the documents it didn’t preserve, nor did it promise to do so in the future to do once. He said it was imperative that the court impose sanctions that showed the risk of destroying documents was not worth it. The DOJ is asking Mehta to draw an adverse conclusion about Google for any aspect of the case where he believes the plaintiffs do not have sufficient evidence. This would mean that the judge would assume that any deleted chats were bad for Google and showed the anti-competitive intent behind their contracts with manufacturers and browsers. The DOJ also wants Mehta to view the destroyed chats as a signal of his anti-competitive intentions.

Google attorney Colette Connor said the company’s lawyers informed the state of Texas (one of the plaintiffs) of its retention policies early on. Dintzer even said that the disclosure came months after the litigation was dropped and that the DOJ would have “obviously” acted had it known that.

Mehta didn’t seem to accept Google’s defense. “It’s interesting to me that Google has been very conscious – and perhaps after seeing what happened with Microsoft – very conscious of giving employees advice about what not to say,” he said. In employee training, the company recommended avoiding terms like “market share.” (Bloomberg Law has found this to be a common practice in large companies.)

It is now up to Mehta to decide how to account for these absent chats. He didn’t provide a timetable for his decision, but in the meantime, Google and the DOJ are preparing for their second antitrust battle over advertising technology in the fall.