USA v. Google Week 6

The ‘Trial of the Century’ reached a landmark this week: on Tuesday the DOJ called their last witness. The Prosecution did not, however, stop there; the States are continuing to call witnesses for at least another week. Nor was it the case that this week saw a decline in intensity: the issue of the trial’s public dimensions re-emerged and Google made their fiercest objections yet to the Prosecution’s key arguments.

Ain’t no Sunshine in the Courtroom

The New York Times filed a motion on Monday requesting public access to admitted trial exhibits. How far the public has access to the events of the trial has been a volatile issue since Week 2. The NYT’s position is certainly empathetic: this is ‘arguably the most important antitrust trial’, they claim, ‘in decades’ and it is hard to disagree.1 From a newsmedia perspective, it is surely frustrating to possess artificially impoverished content as a result of the fact that ‘much … evidence remains out of public view.’ It seems reasonable to assume that public interest in the trial would be far higher if the news outlets could disclose the trial’s more inflammatory aspects.

But this is not an issue which appears to affect the trial’s participants. On Wednesday, Judge Mehta clarified the future of the trial’s media dimensions: he would provide advance notice to the public if he intends to close sessions and he would make no changes to the availability of exhibits online (found here). The fact that neither Google nor the DOJ objected to this state of affairs suggests that, perhaps, the agonisms of the trial’s media presence will finally subside.

Untired of Experts

Professor Michael D. Whinston returned to the stand this week; Google’s lawyers took the opportunity to scrutinise the foundational claims of the USA’s case. They attempted to refute Whinston’s analysis, also voiced in Week 4, that there is a low advertiser response to rises in Google’s prices by claiming that these hikes reflect quality improvements in Google’s product.2 Additionally, in response to Whinston’s insight into Google’s artificial pricing strategies, Google argued that ‘price knobs’ are ubiquitous in online advertising — Microsoft and Yahoo employ similar pricing tactics.3 

But Google’s arguments faced two sources of rebuttal this week: from Whinston’s responses and the exhibits the USA brought later in the week. Whinston refuted Google’s claims with the arguments that, firstly, there has been no observable increase in innovation to account for rising prices in Google’s product and, secondly, that Google’s pricing strategies are far more sinister than other advertisers’ because of their tremendous market share. Whinston’s elegant ripostes bolster the Prosecution’s key claims: Google’s product is stale and prevents innovation in the advertising market; Google leverage their market share to achieve this stultification.

Later in the week, the USA called two external witnesses, one from Microsoft, the other from Expedia, to speak to the above issues. Neil Barrett-Bowen, the Director of Business Development at Bing, addressed the importance of scale to Google’s business model. The USA produced a memo from 2017 which explains that Bing’s search engine ‘consistently serves search results faster than Google today’ on mobile.4 And so the fact of Google’s continuing dominance is a clear product of the market’s anti-innovative qualities; only through the sheer weight of user-numbers is Google to maintain its dominance — not, as Pandu Nayak claimed during the week, because of the quality of the company’s proprietary algorithms. This point speaks directly to the harms that Google’s business model causes. The USA’s ability to expound these harms to the Court is crucial for the effectiveness of their case.

Similarly, Jeff Hurst, the former COO of Expedia Group, diagnosed the changes Expedia has had to make to its business model to deal with Google’s rising prices. Hurst’s hat-trick of claims — that there is no alternative option to Google in the Search Ads market; that Search Ads constitutes a separate market to other forms of digital advertising; that Google’s prices have increased despite no evidence of concurrent improved performance — resonate with the bedrock of the USA’s case. Hurst, in fact, noted that Expedia had had to alter their entire business model — switching to an emphasis on strategic partnerships over advertisements — to deal with the rising inefficiency of Google’s advertising product. Hurst’s testimony enriches the Court’s understanding of the two key battles of this week: he provides evidence that contradicts Google’s claims to innovation and that illuminates gatekeeping effect of Google in digital advertising. 

Google’s tactics offer a foretaste of how they will develop their defence over the coming weeks. But, for now, the Prosecution’s key tenets have withstood Google’s attacks.

  1. All NYT citations quoted in NY Times, Bloomberg, Mlex and Law360 ask judge to open Google trial – Talking Biz News. ↩︎
  2., p. 45.  ↩︎
  3. See for a Google slide deck that explains how ‘price tuning’ enables Google ‘to extract value more directly’ from advertisers. ↩︎
  4., p. 1.

    Header image courtesy of Nellie Adamyan on Unsplash (licensed for free via the Unsplash Licence).