Aldo A. Badini Discusses the Google Search Trial on ABA Panel

On May 6, 2024, Antitrust/Competition partner and Co-Chair of the Technology Antitrust Group Aldo Badini spoke on a panel sponsored by the ABA Antitrust Law Section’s Unilateral Conduct Committee titled “Google Search Trial: Closings Recap & Reactions.” In October 2020, the U.S. Department of Justice and 38 state attorneys general accused Google of using exclusionary contracts to maintain its monopoly in the general search and search advertising markets. After a 10-week bench trial before Judge Amit Mehta, closing arguments were presented in May 2024. During the ABA program, panelists shared their perspectives about the historic trial, including the most compelling evidence developed by the DOJ and Google’s responses, how the facts align with the law, and the role economics played in the trial.

Key Takeaways

• Aldo highlighted Judge Mehta’s inquiries about the proper standard of liability, noting that because this is an injunction case, plaintiffs could have spent more time arguing that they needed only to demonstrate a threat of harm rather than actual harm.
• Echoing the Microsoft case from two decades ago, the issue of defaults and their significance is important here. Google defended its contracts with partners making Google the default search engine by arguing that users could switch to another search engine. However, the panelists noted that behavioral economics data shows that defaults are “sticky,” and users are often reluctant to bother changing them. The court’s decision on the issue of defaults could have repercussions across the tech industry.
• On the question of market definition, the court pushed back on both sides’ arguments as to whether Specialized Vertical Providers (SVPs) such as Yelp and Amazon should be included in the search market. Plaintiffs argued that the market should instead include only “one stop shop” general search engines like Google and Bing. On the search ad market definition side, the question of substitutability depends on whether advertisers switch to other channels for ads or simply switch within search engines when their Return on Investment (ROI) is low. The outcome of this debate, and the court’s ultimate decisions about how to define the search ad market, could impact the separate DOJ case against Google alleging a digital ad tech monopoly, which is pending in the Eastern District of Virginia and set for trial in September 2024.
• With respect to Google’s ad tech business, plaintiffs argued that Google’s search ad price hikes were monopolistic, while Google countered that these increases were matched by quality improvements, necessitating an evaluation of quality-adjusted pricing. However, the judge struggled with the concept of measuring quality increases. Panelists discussed the debate as to whether to consider only price or additional factors such as privacy concerns. Judge Mehta’s take on this debate could provide additional clarity to future litigants attempting to quantify “quality” and its impact on antitrust analysis.
• On the issue of procompetitive justification, plaintiffs countered Google’s claim that the exclusivity provisions in its contracts were procompetitive by arguing that the competition for these contracts did not prove the provisions themselves were procompetitive. The Judge questioned whether, as a matter of law, he could consider alleged benefits in one market as justifying conduct in another market, casting doubt on Google’s “pass-through” justification, which asserts that the money that Google pays its partner device makers will trickle down to users and benefit them by ultimately lowering the price of mobile phones, for example.