After twenty years, another "century anti-monopoly" battle, Google's search faces a lawsuit similar to Microsoft's IE.

Google is facing its largest antitrust trial in 25 years since its establishment.

On September 12th, local time, the U.S. Department of Justice officially launched an antitrust case against Google in Washington, D.C. According to media reports, Kenneth Dintzer, a lawyer for the Department of Justice, accused Google of the following:

Google signs agreements worth over $10 billion annually with wireless carriers, browser developers, and device manufacturers to ensure that it becomes the default search engine on mobile phones and computers;

Google has been "illegally maintaining" its monopoly position since 2010 and currently holds approximately 89% of the market share in the internet search market.

Dintzer emphasized the importance of this case in his opening statement: "This case is related to the future of the internet and whether Google's search engine will face meaningful competition."

The U.S. Department of Justice stated that Google's monopoly has had a significant impact on the search engine landscape, particularly in unfairly harming competitors. The trial is expected to last for approximately 10 weeks.

From Microsoft IE to Google Search, a Replay of Antitrust History

Following the U.S. Department of Justice's lawsuit against Microsoft in the late 1990s, this is the first antitrust trial targeting the business practices of a large technology company.

In the 1990s, the federal government, along with 19 states and the District of Columbia, jointly sued Microsoft for violating the Sherman Antitrust Act and monopolizing the market. Microsoft's bundling of its Windows operating system with Internet Explorer resulted in many competitors of IE being abandoned by the market, and Microsoft itself gained a monopoly over internet browsers as a result.

The case lasted for nearly 10 years, and in 2001, the Department of Justice reached a settlement with Microsoft, which resulted in Microsoft paying billions of dollars in fines. From the judgment, it can be seen that the Supreme Court generally took a lenient attitude towards Microsoft's ruling.

Nobel laureate in economics, Milton Friedman, believed that this antitrust lawsuit against Microsoft set a dangerous precedent for government intervention in free markets, laying the groundwork for future government regulations that would hinder technological progress in the same industry.

Now, this cycle is repeating itself.

In October 2020, the U.S. Department of Justice, along with 11 states, filed the first lawsuit against Google. After a long investigation, both parties in the United States proposed a series of antitrust bills. In December of the same year, the Department of Justice, along with 35 states, Puerto Rico, Guam, and Washington, D.C., filed another lawsuit against Google's search behavior.

In January of this year, the U.S. Department of Justice filed a lawsuit against Google for allegedly monopolizing the digital advertising market. In 2020, the Department of Justice, together with attorneys general from 52 states and jurisdictions, filed a joint lawsuit against Google, accusing it of paying billions of dollars to technology industry peers, smartphone manufacturers, and wireless service providers to maintain its position as the default engine. In recent years, the US government has taken a tough stance against monopolies. In July 2021, the US President signed a comprehensive executive order aimed at combating anti-competitive practices in multiple industries through 72 measures to promote economic competition. This order poses a threat to large tech companies.

As the enforcement of US antitrust laws continues to strengthen, the issuance of this order signifies that the federal government is taking proactive measures to stimulate corporate competition and demonstrates its determination to counter the tech giants.

Sean Sullivan, a professor at the University of Iowa College of Law, stated that in order to win the case, "the Department of Justice must do more than just prove that Google is very large in scale or that its competitors have been trying to fight against it." "The government has the responsibility to prove that Google maintains its monopoly position through anti-competitive behavior."

However, compared to Microsoft, Google has certain advantages. Firstly, Google may be more cautious in the wording and framework of internal documents. Secondly, the court that ultimately decides how the law is applied in the trial may differ.

Can Google and Apple still collaborate?

The collaboration between Google and Apple is a significant point of contention in several allegations.

Since 2005, Google has been paying Apple billions of dollars each year to be the default search engine on Safari. This partnership has benefited both tech giants.

The agreement was signed nearly twenty years ago, at the inception of Google, and it designated Google as Apple's default search engine. Apple would receive 50% of the advertising revenue generated from Google searches on the Safari browser. In 2016, Apple and Google expanded the scope of the agreement to include other Apple features such as Siri and Spotlight, further solidifying their collaboration.

According to a report by Sanford C. Bernstein & Co. analysts, Apple's revenue from this type of partnership reached $18 billion in 2022. Google has benefited from Apple's position in the mobile internet, occupying 90% of the entire search market. Search engines remain Google's largest source of revenue. In 2022, search advertising accounted for nearly 60% of the company's revenue, reaching $162.45 billion.

In comparison, according to StatCounter, Microsoft's Bing currently holds only 6.4% of the US market share, while Yahoo, which uses Bing, holds an additional 2.4% share.

During the trial, when responding to Apple's proposed amendments, Google refused to make changes and threatened to cancel the advertising revenue sharing terms of the agreement. Dintzer believes that "this is the behavior of a monopolist."

In this 10-week trial, witnesses will include current Google employees, executives from opposing parties to the agreement, and three Apple executives.

If Google loses this case, not only will its own business be greatly affected, but the US government may also issue bans to prevent such monopolistic behavior.