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The biggest antitrust trial of the modern digital era lands in court today as the U.S. Department of Justice faces Google (NASDAQ:GOOG) (NASDAQ:GOOGL) in a lengthy showdown over its dominance in online search. The suit is a holdover from the Trump administration, which took an activist regulatory approach against Big Tech that has continued under President Biden. The coming trial is expected to last two months (before any appeals), but Alphabet (GOOG) (GOOGL) also faces litigation over competitive practices in Europe, as well as a separate challenge in the U.S. over its advertising technology business.
The plaintiff: The DOJ will argue that Google (GOOG) (GOOGL) did not cement its monopoly through innovations, but rather via exclusive contracts and deals that made it the default search engine on phones and internet browsers. Those "bad acts" and "illegal means" made it extremely difficult or impossible for any rivals to thrive, and cut off the routes its competitors could take to get in front of consumers. Exclusionary provisions are even said to be behind Google (GOOG) (GOOGL) owning 90% of the search traffic on the web, with its contracts helping it achieve that dominant position.
The defendant: Google (GOOG) (GOOGL) lawyers will maintain that contracts struck with the likes of Apple (NASDAQ:AAPL), Samsung (OTCPK:SSNLF), Firefox and Verizon (NYSE:VZ) are not exclusive and haven't prevented people from searching out other search engines. They'll also argue that its product provides a better experience, while zooming in on specific definitions and taking a broader outlook on web traffic. For example, there are many places where searches are conducted, like on the platforms of Amazon (AMZN) and Meta (META), with those companies also paying close attention to the courtroom battle.
What to watch: The trial will determine whether the U.S. government can bring a successful monopoly case against Big Tech, after previous failures with IBM (IBM) (dismissed in 1982) and Microsoft (MSFT) (settled in 2002). However, even if the government wins this time around, a breakup or divestitures are not expected, but rather remedies that can include absolving Google's (GOOG) (GOOGL) exclusive search deals. Any decision will also have an impact on the future of innovation, including how much data can be collected in the coming age of artificial intelligence and other new technologies.