Google accused of anticompetitive practices to keep its default search engine
What do you want to know
- The US Department of Justice has accused Google of stifling competition in the search engine market by paying “huge sums”.
- The allegation was made in the first hearing ahead of the DOJ’s antitrust trial due next year.
- Google’s contracts with Apple, Samsung and other big companies are in trouble if the DOJ wins the legal battle.
The US Department of Justice has accused Google of anticompetitive practices for paying large sums of money to large tech companies to maintain its dominance in the search engine market.
During a hearing in Washington, D.C., DOJ attorney Kenneth Dintzer raised concerns about Google’s deals with major phone makers and network operators in the United States to make Google Search the default search engine, Bloomberg (opens in a new tab) reports.
“Google invests billions in defects, knowing that people won’t change them,” Dintzer told judge Amit Mehta. “They buy exclusivity by default because flaws matter a lot.”
However, the exact amount was not disclosed. Dintzer argued that Apple, Samsung, Motorola and other phone makers are being paid big bucks to keep Google search dominant on their products. An investment note from Bernstein analyst Toni Sacconaghi claimed last year that Google could pay nearly $15 billion to be the default search engine on Apple products.
The Mountain View-based search giant also has contracts with major telcos AT&T, Verizon and T-Mobile to preload its search engine on new handsets, including many of the top Android phones.
These contracts are considered anti-competitive, excluding other search engines. It also allows Google to gather a treasure trove of user data, which fuels its advertising empire. Although users have the option to change the default search engine on their phone, most people don’t bother to do so at all.
On the other hand, Google attorney John Schmidtlein refuted the DOJ’s claims, arguing that the company faces competition from dozens of search engines.
“You don’t have to go to Google to shop on Amazon. You don’t have to go to Google to buy plane tickets on Expedia,” Schmidtlein said. “Just because Google doesn’t face the same competition for every query doesn’t mean the company doesn’t face fierce competition.”
A hearing for the DOJ’s antitrust lawsuit is scheduled for next year. For Samsung and other smartphone giants, the lawsuit means they could lose billions of dollars if Google were to end these default search contracts.