Embattled Google faces trial as Biden cracks down on monopolies

The moment Bill Gates went from boy wonder comedian to ruthless capitalist icon is easy to pin down: It was captured on camera .

The Microsoft co-founder and CEO, who became the world's richest person in 1995, has become the face of a vibrant new digital age that has seen millions of families able to buy their first computer.< /p>

But his videotaped testimony released in the landmark 1998 US government monopoly case against Microsoft portrayed him as evasive, rude and arrogant.

Gates, who believed that the recording would never be shown to the public, took years to restore his reputation.

Microsoft took even longer. Although the company avoided breaking up in a legal battle that centered on its dominance in the PC market, years of litigation have been cited as a key reason why the company missed out on next-generation technologies such as Internet search, social networking. media and smartphones.

Bill Gates' his reputation suffered greatly in the late 1990s after a recording of his testimony in a monopoly case was made public. Photo: JESSICA PERSON/AFP via Getty Images

This week, a courtroom in Washington, D.C., will hear the biggest tech monopoly case since the U.S. government came close to breaking up Microsoft a quarter-century ago. His target is Google, one of the companies that took the crown of innovation from Gates's business.

The US Department of Justice is suing Google under the same 19th-century law that was used against Microsoft, and is accused of using similar tactics. In that case, prosecutors allege the company used a web of illegal deals to freeze out its search engine competitors, cementing its own vicious control over the network.

The agency is seeking an order requiring Google to stop its behavior, but the judge may go so far as to break up the company.

Like Microsoft at the turn of the millennium, Google is also embracing changes in the technology industry. For the first time in decades, its search engine is under threat, not from a traditional competitor, but from artificially intelligent chatbots like ChatGPT, which can replace the cascade of links offered by Google's search engine with concise and precise answers.

The US case against Google is the culmination of more than a decade of growing regulatory pressure against the company, which celebrated its 25th anniversary last week.

The European Union has repeatedly fined Google billions of euros and ordered it will make changes to its range of services, from price comparison to software for Android phones and online advertising.

The U.K. competition regulator has launched multiple investigations into the company and forced it to make changes to its web browser.

The U.S. case was first brought nearly three years ago under the Trump administration but was pursued by the Biden Justice Department. It comes down to the company's center of power: its all-conquering search engine.

The Justice Department argues that Google's dominance, which accounts for nine out of 10 searches in the U.S., is not the result of having a better search engine, but rather a consequence of a series of exclusivity agreements signed with phone makers and software makers that made it the best search engine. The main search engine for almost all consumers and has frozen potential competitors.

«It's no longer about technology, it's about the moat it builds around itself,» says Colin Hayhurst, who runs British search engine Mojeek. «The fact is that they have agreements with other major players.»

Specifically, the Justice Department's case centers on a deal with Apple to become the default search engine for the iPhone's browser. The contract is believed to be worth up to $15 billion (£12 billion) a year.

According to the complaint, one Apple employee told a Google colleague: “Our vision is that we We work as if we are one company.”

Regulators' focus on the prevalence of Google search on iPhones has caught the attention of Apple boss Tim Cook. Justin Sullivan/Getty Images

Apple provided prosecutors with more than a million pages of evidence. Three executives, all of whom report directly to CEO Tim Cook, are set to appear on the witness stand after the iPhone maker failed in an attempt to block legal demands for them to testify. (Apple says it makes Google the primary search engine on its phones because it believes it is the best on the market, not because of the billions that are being funneled away as a result.)

Google Chief Legal Officer Kent Walker called the case «deeply flawed» and said people use his search engine «because they want to, not because they are forced or because they can't find alternatives.»

The trial is set to last just over two months, with a number of powerful figures expected to testify, including Google CEO Sundar Pichai.

The US government's chances of success are unclear. Courts have faced a series of setbacks in their efforts to rein in big tech companies. Attempts by regulators to block deals such as Microsoft's purchase of gaming company Activision Blizzard and Meta's purchase of virtual reality company Within have been reversed.

Last week, a group of US states sued Google for violating monopoly laws. with its own application store, calculated with the company. The terms of the deal were kept secret.

Google Chief Executive Sundar Pichai is expected to testify when the US Justice Department case is referred to court. Photo: Kyle Grillo/Bloomberg

Maurice Stack, a former Justice Department prosecutor and law professor at the University of Tennessee, says the outcome of a case is difficult to predict.

“The problem today is that the courts are a moving target, and it is very difficult to predict how they will rule.” solutions,” he says. “The agency has not brought many monopolization cases; the last one was indeed the Microsoft case.”

Even if the DOJ case ultimately fails, it may not matter. The abundance of evidence and testimony will in itself be a form of punishment. Gary Rebeck, one of the government lawyers who fought Microsoft in the 1990s, likes to say, «Trial is the cure,» meaning that public scrutiny is punishment enough on its own.

Google's lawyers tried to prevent The case was not broadcast via Zoom, which opponents say is an attempt to suppress the attention it is receiving.

Meanwhile, the distraction of a major court case is also likely to have an impact on day-to-day operations.

Google's case comes as its search engine faces a growing threat from artificial intelligence. The company has declared an internal «code red» due to the emergence of ChatGPT. Engineers have warned that the company has «no moat» against the rise of free and open-source models, and many of its artificial intelligence experts have quit, citing a stifling culture that discourages innovation.

Even if Google wins In a battle with the US government, this meeting could cause long-term damage.

Shivaun Ruff, co-founder of price comparison service Foundem, who has been campaigning against Google in Europe for more than a decade, says of the US legal battle: “This is the first step. I believe they have a few arrows in their quiver, but it's just the beginning.»