{"id":59928,"date":"2023-09-12T06:26:25","date_gmt":"2023-09-12T10:26:25","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/googles-antitrust-trial-starts-today-heres-what-it-all-means\/"},"modified":"2023-09-12T06:26:28","modified_gmt":"2023-09-12T10:26:28","slug":"googles-antitrust-trial-starts-today-heres-what-it-all-means","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=59928","title":{"rendered":"Google’s Antitrust Trial Starts Today. Here’s What It All Means."},"content":{"rendered":"
\n

The Justice Department\u2019s long-anticipated antitrust case against Google, which accuses the company of illegally monopolizing the internet search market, kicks off on Tuesday in Washington, D.C. <\/p>\n

The case is expected to last until mid-November.<\/p>\n

\n

At issue is whether parent company
\n Alphabet
\n (ticker: GOOGL) has used steps to solidify its dominance of the search market in a manner that violates federal antitrust law. Google says that its overwhelming market share advantage in internet search reflects the utility of the product, rather than any nefarious behavior.<\/p>\n

\u201cGoogle has helped make the world\u2019s information easily accessible to billions of people,\u201d Kent Walker, Google and Alphabet\u2019s president of global affairs, wrote in a blog post last week. \u201cOur engineers work to offer the best search engine possible, making thousands of improvements every year so that we deliver the most helpful results, for free.\u201d\u00a0<\/p>\n

The case, which was filed by the Justice Department in conjunction with a group of state attorneys general, will focus partly on Google\u2019s search distribution relationships with
\n Apple
\n (AAPL), Samsung, and other mobile phone providers.\u00a0<\/p>\n

\u201cWe plan to demonstrate at trial that our Search distribution agreements reflect choices by browsers and device makers based on the quality of our services and the preferences of consumers,\u201d Walker wrote in the blog post. \u201cIn sum, people don\u2019t use Google because they have to\u2014they use it because they want to.\u201d<\/p>\n

The case will be a bench trial, to be decided not by a jury but by District Court Judge Amit Mehta, an Obama appointee who has been on the court since 2014. The government\u2019s case will be led by Justice Department attorney Kenneth Dintzer, a veteran prosecutor who has been working for the government for more than three decades. The defense is led by John Schmidtlein, an attorney who leads the antitrust practice at the law firm Williams & Connolly.<\/p>\n

On Friday, Judge Mehta denied a request by some advocacy groups to make an audio feed of the trial available, though Tuesday\u2019s opening statements will be the exception. There will be three opening statements\u201445 minutes from the Justice Department, 45 minutes from the state attorneys general, and a 60-minute statement from Schmidtlein on Google\u2019s behalf.<\/p>\n

J.P. Morgan analyst Doug Anmuth estimates that Google will pay out close to $30 billion to search distribution partners this year, with about $20 billion of that to Apple, $8 billion to Android phone companies and carriers, and the rest to smaller browser companies. <\/p>\n

His view going into the trial is that Wall Street could look at this as a win\/win for Google: The company could win the case, and preserve the status quo. Or, if Google loses, it could recoup the billions it pays to distribution partners, with potentially only negligible impact on market share or search volumes.\u00a0<\/p>\n

Anmuth wrote that an outright win would be the best outcome for Alphabet shareholders, since it would solidify the company\u2019s very attractive position in search, even though it might not be the best outcome in terms of earnings growth. On the other hand, he estimates that if Google loses the case, it could give up 20% of its search advertising before seeing a negative impact on earnings, given the high-cost associated with maintaining some of that market share.<\/p>\n

On the other hand, Anmuth notes that a loss for Google introduces risk that
\n Microsoft
\n Bing could become a default search provider on some devices where Google now rules the roost\u2014or that Apple could develop its own search engine. And he notes that there is risk that new options could emerge as generative AI chatbots gain traction.<\/p>\n

\u201cOverall, while there are clearly scenarios in which Google could \u2018lose\u2019 multiple claims and have higher earnings, those scenarios also result in greater risk and uncertainty,\u201d he wrote. \u201cIn this case, we think \u2018winning\u2019 for Google really is preserving the status quo.\u201d<\/p>\n

Write to Eric J. Savitz at eric.savitz@barrons.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Justice Department\u2019s long-anticipated antitrust case against Google, which accuses the company of illegally monopolizing the internet search market, kicks off on Tuesday in Washington, D.C. The case is expected to last until mid-November. At issue is whether parent company Alphabet (ticker: GOOGL) has used steps to solidify its dominance of the search market in […]<\/p>\n","protected":false},"author":1,"featured_media":59929,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-59928","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nGoogle's Antitrust Trial Starts Today. 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