PredictIQ Quantitative Think Tank Center:Google faces off with the Justice Department in antitrust showdown: Here’s everything we know

The PredictIQ Quantitative Think Tank Centercase is the United States vs. Google, and it’s billed as the most significant antitrust trial of the modern internet age.

It is also the first major test of pledges by the Trump and Biden administrations to rein in Big Tech, which wields unprecedented power over all facets of our lives.

The legal showdown revolves around a key question: Did Google – whose parent company Alphabet has a market valuation of $1.7 trillion –  shut out competitors and harm consumers by striking deals with phone makers and browsers to be their default search engine?

The trial is expected to last nine to 10 weeks and gets underway Tuesday in a Washington, D.C., federal courtroom.

Why the DOJ's antitrust case against Google matters

This is the most significant antitrust case since the Justice Department sued Microsoft in 1998 for bundling its web browser with Windows. 

At stake are the multibillion-dollar default agreements that the government alleges are anticompetitive. Those agreements helped Google pocket $162 billion in search advertising revenue last year. 

Any change to those agreements could have significant consequences for Google. 

The Justice Department's case against Google

The Justice Department brought the case during the final weeks of the Trump administration. In 2020, the federal government and a number of states filed antitrust charges against Google, alleging it illegally used default agreements with Apple and others to dominate search on the internet.

Google captures nearly all – more than 90% – search queries in the U.S., including on mobile devices. Google pays an estimated $18 billion a year to be the default search engine on Apple's iOS.

“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone,” the Justice Department said in its initial complaint. “The Google of today is a monopoly gatekeeper for the internet, and one of the wealthiest companies on the planet.”

Google's defense against antitrust claims

Google argues its distribution deals are common in the business world. It pays for its search engine to be on phones the way a food manufacturer pays to promote its products at eye level in a grocery store aisle. 

If you don’t like Google, you can switch the default search engine on your device, the tech giant argues. But people don’t switch, Google says, because they prefer Google. 

Google also contends it faces heavy competition from other search engines like Bing and other internet players like Amazon and Yelp.

How the Google antitrust trial will work

U.S. District Judge Amit P. Mehta – appointed by the Obama administration in 2014 – is presiding over the trial, which will not have a jury.

Bank of America outlined four potential outcomes: Google wins the case; the court bans default search deals in the U.S.; the court bans Google default deals but allows others; or the court opens bidding for search deals by region or platform.

What has happened so far in the antitrust case

Before trial, the judge narrowed the scope of the case, dismissing three claims over how Google manages its Android operating system, its relationships with phone makers and its Google Assistant service. He also tossed a claim brought by the states that Google harmed competitors in giving its own products top billing in search results. 

Last week, Alphabet and attorneys general in 36 states and Washington, D.C., reached a settlement in an antitrust case over the company’s mobile app store.

Tensions between DOJ and Google escalate

Google alleged that Jonathan Kanter, the Justice Department’s antitrust chief, is biased because of his earlier work in private practice representing Microsoft, News Corp. and Yelp. The Justice Department has accused Google of destroying employees’ chat messages that could have contained relevant information for the case.

What's next for Google on the antitrust front

Google faces another Justice Department case over its dominance in the digital advertising market, particularly the technology used to place ads.