Adi Robertson

Mehta asks the DOJ’s attorney why Microsoft would bother paying for placement if Google weren’t able to bid, echoing the claim from Google’s lawyer.

Ban Google from bidding for default search engine placement, says Schmidtlein, and Microsoft will just roll up with its own wheelbarrow of cash for a similar exclusive deal with Bing. “This would be one of the most invasive remedies I can imagine, and it would also harm all of these adjacent markets,” he says. He adds that companies are “competing just fine with Gemini” as well.

That’s Google’s attorney’s description of how OpenAI launched ChatGPT as a “lark.” The underlying argument is that the judge doesn’t need to impose long-term restrictions, since the market moves so fast — and now, of course, OpenAI is raising billions in funding.

Mehta seems dubious that any conventional search engine will ever come to rival Google. If a competitor emerges, “it’s not going to be DuckDuckGo,” he says. It won’t even be Microsoft. It will be, he says, likely an AI service that includes search.

Mehta brings up an issue Apple’s Eddy Cue raised during his testimony. Cue said that if Google was banned from cutting exclusive deals, Apple would still be forced to use it as the default because it’s the only viable option, while Google would simply stop needing to pay it for that placement. Is that a valid problem?

Mehta poses a weighty question to the DOJ: how seriously should he take the dire warnings that companies Google pays for default placement, including Mozilla, have made during testimony? “Every single distribution partner ... has said, this would harm us. This would harm us. Some have gone so far as to suggest this would put them out of business,” Mehta says. “Is that an acceptable outcome to fix one market at the risk of harming others? Because that’s what these other folks are telling us.” Mozilla, for instance, has said its Google deal provides the vast majority of its revenue.

Dahlquist makes the case for banning Google from offering payments for default placement on platforms, singling out its “astronomical” revenue-sharing deal with Apple. “If we continue to let Google pay for distribution, it will continue to win every contract,” he said. “Nobody can pay as much as Google.” He extends this to how Google is handling Gemini default placement.

Lunch now concluded, the DOJ’s Dahlquist is discussing the “monopoly flywheel” that keeps Google dominant, particularly the deals that have given Google default placement on places like Safari. Google has, as Mehta pointed out, offered some concessions here. “Their remedy as I understand it is, drop the word ‘exclusivity” in these deals,” Dahlquist says, and the DOJ agrees with that. But he says Google “doesn’t go nearly far enough” in including Gemini in its proposals.

We’ll be back in 45 minutes for more.

Or more specifically, the lack of a detailed plan from the government about how to preserve it. “How much detail do I need to put on paper?” Mehta asks DOJ attorney Adam Severt. Right now, he says, he’s got “zero.” The DOJ is aiming for a committee that could decide, which Google strenuously objects to. Mehta runs through a series of steps the committee might have to take and asks how long it would require. A “couple of weeks to month to set up the experiment,” and then “a day or two to run the experiment,” Severt says.