Regulation

Schmidtlein says not only is it not justified by the law, the tangible harms outweigh “speculative benefits” to the competitive landscape. There’s “voluminous evidence” Chrome succeeded through innovation.

We’re currently hearing from a lawyer for the state lawsuit against Google, and Mehta is drilling down on a fairly salient issue: will Chromium employees actually move from Google to whoever buys it? The attorney says it’s common industry practice for workers to come with a company. That might be a reasonable claim, but it’s not a hard rule — and if it turns out not to apply here, that’s a potentially big temporary hit to Chromium’s maintenance and all the browser makers that rely on it.

Mehta asks whether a Chrome buyer would need to demonstrate it was capable of maintaining the open source Chromium project that powers numerous other browsers. “There are very few that could actually demonstrate it today,” he says. The DOJ’s attorney says there could be a negotiation with the future buyer to ensure a commitment, and people who are currently working on Chromium at Google would come over to the new owner.

Back after a short break, Dahlquist is arguing for why Google should have to sell its web browser. “Browsers are the way users get into the internet,” he says, and a huge part of that is search. He recaps the basics about Chrome’s popularity, including that 35 percent of Google queries come through Chrome.

We’re nearing the end of the day and currently on break. A few broad highlights:

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.

Schmidtlein is tearing into the government for not hammering out how to handle sensitive data before and during this hearing, and instead trying to kick it down the road for a decision later. “There’s an extraordinary amount of user data here,” and everyone “admits that it implicates privacy,” he says. Google previously argued that revealing search query data would undermine user trust, and he reiterates that search queries can reveal detail about individual people even if you try to remove personal identifying information. “We have a rough idea of a standard of privacy, but no idea about how to solve it,” he says. “It’s not even begun to be resolved.”

Schmidtlein is coming back, starting where the government left off, with search data syndication and who might get access to it — which he emphatically says shouldn’t include AI companies. “It could not be more clear, they are not trying to out-Google Google. They’re going about it in a different way. They are not a search engine,” he says. “The only person who would qualify right now under their definition is Microsoft” with Bing.

Judge Mehta is zeroing in on the possibility Google could only share those long-tail queries. The plaintiffs say the approach might make sense, but that it’s not always obvious how to define a long-tail query. Mehta objects to that, saying it seems like something competitors should figure out. “They don’t have access to the same data ... that’s the problem,” he says — not that they can’t figure out what they are.

Mehta has been pushing on ways Google could share its search data without including significant amounts of user data or kneecapping Google and still give rival search engines enough to improve their products. He’s pressing the government on whether witnesses really focused on comprehensive user data, or if they were more interested in Google’s index. He cites an amicus brief from Brave, which suggested limiting the shared data to unusual and hard-to-get “long-tail” results that can supercharge search quality. Also, how often should Google have to provide fresh results, and how much should it cost competitors to access them? “We’re trying to kickstart competitors, we’re not trying on Day 1 to put them on equal footing with Google,” he says.

“I understand this is now forward-looking, but I don’t know that” there’s an argument that would “allow the court morphing the market” this way, he says. “What case can you look to that has that kind of quality to it that can address that kind of emerging market and put it in this box of qualified competitor?” Judges’ questions don’t always indicate how they’ll rule, but that might bode ill for some of the companies Google is most worried about — generative AI providers — getting access to valuable data.

Mehta asks the question to the government. “I don’t think they’re interested in competing as a search engine qua search engine,” he says, elaborating. They “want to have better grounding in search” to have the best model in the world; is that sufficiently related? “It feels like to me the definition ought to be changed” of a general search engine if so, he says. The government disagrees, saying AI companies are clearly aiming to compete in the same areas. Mehta points out a contradiction: the government wanted to exclude a bunch of other search-engine-like services to establish Google had no meaningful search competitors during the liability trial, and now it wants to add new ones during remedies. “I’m not sure it quite fits,” Mehta says.

We’re still arguing about why data sharing is important, and whether Google’s “quality gap” of information compared with competitors is both significant and unfairly obtained. Data sharing and AI are emerging as two of the biggest elements of these arguments, which isn’t surprising: the former is something Google sees as potentially catastrophic, and the latter is where it sees the future of search.

We’re taking a 15-minute break before getting back to arguments — after a little chitchat, it’s near-silence on the teleconference line.

The DOJ’s lawyer is back up for rebuttal — arguing that Google might say its remedies are extreme, but a truly extreme remedy would be something like requiring it to sell search. The goal is denying Google the fruits of the monopoly it’s established and making sure there are “no practices” left to help it unfairly maintain it, he says.

“I don’t believe you have a factual basis to ... suggest there was a causal connection” between Google’s multibillion-dollar deal and Apple not developing a competing search engine, says Schmidtlein — and Google is still going to get the most traffic on Apple’s Safari browser even if it’s competing for placement on a non-exclusive basis. Yahoo catches a stray here: “Yahoo can’t even keep its own users” using its search engine, he says.

Mehta asks: what kind of legal framework should he be using to think about generative AI product remedies? “GenAI products are not in the relevant market ... there is no evidence that generative AI products were harmed” by any of Google’s conduct in this case, Schmidtlein says — they didn’t even exist during the period covered in the original trial. “The notion that these AI rivals have been harmed at all is... whatever,” he says. But Google is willing to address the question about forward-looking impact by avoiding bundling or exclusive deals like the ones it used for search. “You can rest assured that at least in that sense it can be addressed.”

Google’s attorney starts by emphasizing all the privacy and competitive problems he sees with the DOJ’s overall proposal, but concedes that some limited data syndication could be feasible. “None of this reverse-engineering” products or “feeding all of our data into an LLM”, Schmidtlein says, but the syndication could help improve search results marginally. (You may recall that Sundar Pichai claims unlimited data sharing could essentially kill Google search.)

Mehta and Schmidtlein are still arguing about what kind of hypothetical world would have existed without Google’s exclusionary deals, and how drastic a market intervention that would justify. Google, you may remember, is pushing hard to focus purely on ending the exclusivity requirements of its deals while scrapping other proposals like data-sharing with other search engines — but Mehta expresses concerns that this approach “sells the remedies portion of this short.”

Schmidtlein and Mehta are going back and forth over how much Google’s monopolistic conduct — particularly its exclusionary deals with companies like Apple — let it gather data that gave it an unfair leg up over other competitors, and whether without that conduct, other search engines would have become meaningful competitors. “We had witness after witness come in and say data helps improve search quality,” Mehta notes.

Google attorney John Schmidtlein is rebutting the government’s case — calling the proposed remedies “invasive and broad and market reengineering.”

Judge Amit Mehta just wrapped up a long line of questioning about how generative AI should play into the search trial. “We spent a lot of time in this remedies phase talking about AI,” Mehta began. “There’s an argument to be made perhaps that all that is not relevant because it’s not a market that was discussed during the liability phase.” Mehta asked Dahlquist to defend why a tool like Gemini should be considered part of the overall search market, not something separate and new. Dahlquist, in turn, emphasized that AI “is a new search access point. That is a gateway to search.”

DOJ attorney David Dahlquist is laying out the governments’ case for changes that would help “pry open the market to competition” in search. He’s accused Google of providing “milquetoast remedies that it knows will maintain the status quo,” instead mainly arguing in preparation for its appeal.

Closing arguments are starting in US v. Google, the antitrust trial that could determine whether Google is forced to sell its Chrome browser and dramatically change its search business. We’re not in court today, but we’re listening on a dial-in line for this final stage of the trial.

Last month, the European Commission ruled that the App Store’s “anti-steering” policies — which put restrictions on developers pointing to external purchases — violate the Digital Markets Act. That ruling has since been published in full, stating that Apple must pay the €500 million within three months, or it will incur interest. Apple must also come into compliance with EU laws by the end of next month.

“The line between professional and personal is increasingly blurred,” says a LinkedIn document shown in a video deposition. Then-LinkedIn product executive Kumaresh Pattabiraman explains in the video that in the wake of the pandemic, “we observe that people are bringing their personal and their professional lives a lot closer together,” with people posting about everything from completing a marathon to their views on politics on LinkedIn. This seems to undermine the FTC’s claim that LinkedIn does not compete with Facebook and Instagram for personal social networking. He says friends and family have always been part of the LinkedIn experience, but even more so now.

In a video deposition Judge Boasberg watched a few weeks ago and the media is now being shown, former Morgan Stanley investment banker Ali Esfahani describes the whirlwind few days in which the $19 billion deal came together. The deal followed none of the usual steps Morgan Stanley would typically take contacting buyers and negotiating price on the company’s behalf, he says. Instead, after being called on a Saturday night, he showed up to a meeting to hammer out the deal, but “when we arrived, we realized the price had already been negotiated, the buyer had already been selected.” Esfahani says he felt like he was basically “being thrown a bone because of all the preemptive work that we had done.”

After six weeks, the FTC’s anti-monopoly trial against Meta is finally over. The parties will need to file post-trial briefs, including Meta’s argument to strike FTC expert Hemphill’s testimony, and then it will be up to Judge Boasberg to write his opinion. Boasberg says he plans to “take a welcome respite from thinking about this” until the first brief is due. He thanks everyone for their “hard work over the last four and a half years” — a stark reminder of how long this case has been in the works — and adds that the “issues are certainly interesting, and I’ll await final submissions and get you my decision as expeditiously as I can.”

The company plans to move to strike Hemphill’s testimony, saying he prejudged Meta’s antitrust liability even before he was retained as an expert witness by the FTC. Huff pulls up a more full version of the 2019 presentation that Hemphill and former Biden official Tim Wu gave to the agency urging an investigation into Meta’s potential monopoly power, just a week before it opened its probe. Huff suggests that the agency ultimately took Hemphill’s litigation strategy advice, though the expert disagrees that’s what he offered. Huff shows a slide suggesting the FTC interview many of the witnesses that appeared in this case, including the founders of Instagram and WhatsApp. Hemphill says “it’s hardly brain surgery to talk to all the founders.” Huff also pulls up a post Hemphill and Wu wrote after the FTC filed its case, calling Meta a monopolist.

When lower engagement correlates with users being served more ads, Meta suggests that might actually mean that users like the ads so much that they’re clicking them and spending their time on the advertiser’s site — not that they dislike ads so much that they leave. Hemphill concedes that he didn’t parse out how much of the decreased engagement was due to people liking or disliking ads, but says the distinction doesn’t seem important.