Big Tech on Trial
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Reporting for BIG on the Google Search and Ad Tech antitrust trials, and generally confronting the power of Big Tech. Edited by @matthewstoller and @leehepner .
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Bloomberg reporter Leah Nylen then stood up from the gallery, prompting Judge Mehta to ask who she was and why she was standing up. She identified herself as a Bloomberg reporter and said the posted exhibits provided important public access to the trial,
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Google’s witness just let leak that it shares 36% of its search revenue with Apple. Probably the biggest slip of the entire trial.
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and she wanted an opportunity to get a lawyer in the courtroom if the court was considering not allowing them.
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Dramatic moment at the end of court today in
#USvGoogle
. During an argument over the admission of an exhibit, Google pointed out that DOJ was publicly posting admitted exhibits on its website. Judge Mehta said he didn’t know DOJ was doing this. (cont.)
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Judge Mehta said he wasn’t necessarily opposed to them being posted and that they were a part of the public record as long as they were submitted. For now, it seems like he’s leaving it to the parties to work out.
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Incredible: In 2017, Google considered spinning off DoubleClick, but the tie was too valuable: “The value of Google’s ad tech stack is less in each individual product, but in *the connections across all of them.*”
As close to a silver bullet as it gets.
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This is the site where DOJ had been posting the trial exhibits: . It seems like they’ve already taken down the exhibits they had previously posted.
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DOJ suggested providing the exhibits it wants to post to Google 24 hours before they went up. It remains unclear if this is the practice they will adopt.
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Judge Mehta just ruled against redacting transcripts of inadvertently disclosed information (presumably the 36% Google-Apple revenue share figure) finding a lack of competitive harm.
Makes you wonder why it was deemed confidential in the first place.
#USvGoogle
🤷♂️
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…80% of his income comes from doing this sort of expert testimony, with only around 20% coming from his actual job.
This was striking and effective impeachment of Mark Israel’s credibility as a witness.
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Google’s cross-examination of Google ad executive Jerry Dischler has focused on the ways Google tries to bring value to both users and advertisers in its search ads.
At one point Dischler said: “We believe it is actually a worse user experience to not have ads on the page.”
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Stepping out of court at US v. Google for a quick update that was too crazy not to post.
After 4 hours and 35 minutes (!) of direct examination of Google expert Mark Israel by Google lawyer Bill Isaacson, cross examination began.
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DOJ apologized for posting the exhibits without letting Judge Mehta know, and said they would would take the exhibits down until they reached a resolution with Google and the court.
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Here’s what I have to report on today from
#USvGoogle
today — although we got less than two hours of open court testimony.
Court started in a closed session with Google Finance VP Mike Roszak on the stand. Court didn’t re-open to the public until after lunch.
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Tomorrow begins US v Google II, the Ad Tech trial, and we’re beginning to imagine a post-Google world.
We’ll be in Court every day for the duration. Follow along at bigtechontrial dot com and get up to speed with this excellent
@matthewstoller
analysis.
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A fair auction would have returned 100s of millions of dollars to publishers, according to experts whose testimony we'll hear in the coming weeks.
And Google knew it. In an email shown to the court today, Chris LaSala acknowledged that Google's exchange didn't justify a 20% fee.
Big Q that is still unanswered—in some instances, publishers made more money with Google.
But could they have made even more in a fair auction?
We keep hearing phrases like “auction pressure”
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Is there a "crisis of expertise" in antitrust, as
@JusticeATR
Chief Kanter recently cautioned in a historic speech at Fordham Law?
If so, the government's impeachment of perennial expert Dr. Mark Israel was a fitting capstone to the Google Ad Tech trial.
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Teitelbaum then read quotes from the decisions in these cases, in which judges described his expert testimony as “not credible” and having “misunderstood antitrust law.”
Teitelbaum also asked him to confirm that he’s never held a tenured faculty position, and that…
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Why does Google pay $26.3 billion per year to put its search engine on phones, browsers, and wireless carriers?
Google says they're just promoting their product. But the government says it's about something else:
User data. And Google knows a LOT about you. /🧵
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Murphy argues rival search engines exert competitive pressure on Google, even if they can't win default status.
A telling Q from Judge Mehta to Murphy: “If competitors are able to influence price but not ultimately win the competition, is that really a competitive market?” /fin
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Good morning from the final day of
#USvGoogle
. The lone, final witness today is MIT economist Michael Whinston, who has previously testified twice in this hearing.
Let's celebrate 10 weeks by live tweeting as much as we can! /🧵
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DOJ walked Lehman through a number of slide decks he had made during his time at Google. One was titled “Google is Magical”, another was titled “Life of a Click.” The general theme of DOJ’s questioning seemed to be that user data was a critical component of Google’s “magic.”
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DOJ also displayed the top 20 search queries ordered by revenue that Google earned for a week in 2018. The actual revenue amounts were redacted. Here’s what the top of that list looked like:
1) iPhone 8
2) iPhone 8 plus
3) auto insurance
4) car insurance
5) cheap flights
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In an audio recording introduced by the DOJ on Day 5 of
#USvGoogleAds
, a publisher using Google AdX asked a Google executive directly:
“You have made it impossible for any of us to discover yield with anyone but Google. Isn’t that a monopoly?”
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This is the exhibit from
#USvGoogle
that sparked the initial dispute over the DOJ’s public posting of exhibits.
Still waiting to see the unsealed testimony for context, but it was presented during DOJ’s examination of Google VP of Finance Mike Roszak.
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In which a former Google exec asks, "Is there a deeper problem with us owning the platform, the exchange, and a huge network?"
And on that note, the government closes its affirmative case in
#USvGoogle
ad tech.
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There’s really been a noticeable shift in Judge Mehta’s attitude towards closing court.
Today he was actively pushing the lawyers to do more of their questions in public. And he wants to unseal closed-session testimony even though DOJ never filed a motion for him to do this.
Judge Amit Mehta told Microsoft and the lawyers in the case that he wants as much of Nadella's testimony to be public as possible (yay!)
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Judge Mehta ended up siding with DOJ on both of these issues — one of several wins for the DOJ/States today during their crosses of Google executive Prabhakar Raghavan.
The biggest news from today: in 2021, Google paid ~$26.3 billion dollars to partners like Apple, Samsung, etc.
to make public the 20 search queries Google makes the most revenue off of as well as Google’s traffic acquisition costs related to search (the total amount of money Google paid to partners in search distribution revenue shares).
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(IQVIA, Kroger-Albertsons, US v. Google I (search case from last fall), JetBlue/AA, etc.)
The framing here by the government is that Israel is a serial “expert“ for companies facing anti-trust challenges and always finds that the companies “explained away” market definition
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DOJ also asked Lehman about a slide on “Sensitive Topics” that instructed employees to “not discuss the use of clicks in search…” Lehman testified that everyone knows Google uses user data in search but
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Apple executive Eddy Cue faced about an hour of direct-examination in open court from the DOJ this morning. Now they are back in closed session — I would guess for most of the rest of the day — but here are some highlights from Cue’s testimony:
Cue confirmed he was the lead
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The direct examination went pretty well for Google, so the government needed to come in heavy.
Government lawyer Aaron Teitelbaum is handling the cross.
He began by listing off the sheer number of antitrust trials Israel has been an expert in (seemingly always for the company)
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Summary of days 4 and 5 of the US v. Google adtech antitrust trial is now out:
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Most damning exhibit yet in
#USvGoogleAds
trial just posted. From a 2018 email from Chris LaSala, Google's Director of Publisher Advertising:
"I think we are all in agreement that 'exchange functionality' is not worth 20% and value comes from sourcing demand."
Dead to rights.
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One other powerful nugget that DOJ elicited during this exchange: the amount of money Google spent for R&D on search in 2021 was “many times less” than the $26.3 billion it spent in traffic acquisition costs to secure default status on multiple search distributors.
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Day 16 of
#USvGoogle
comes to a close with Judge Mehta announcing that he would be unsealing much of the closed-session testimony from DuckDuckGo CEO Gabriel Weinberg and Apple executive John Giannandrea.
Judge Mehta said he did a line-by-line reading of the transcripts
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DOJ posted a number of the exhibits it used during its cross-examination of Alphabet CEO Sundar Pichai. Here are some of the exhibits DOJ focused on in court.
Google’s 2005 letter to Microsoft re: Internet Explorer’s bundling of search:
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that “we try to avoid confirming that we use user data in the ranking of search results.” I didn’t get great notes on this, but I think the reason had something to do with not wanting people to think that SEO could be used to manipulate search results.
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Judge Mehta never addressed the exhibits being publicly posted on DOJ’s website — so as of now, we don’t have any clear resolution on that. That means we also don’t know what is in this apparently “embarrassing” document for Google.
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My last article for Big Tech on Trial with
@matthewstoller
looking back on the first 9 weeks of the
#USvGoogle
trial — “Is Google’s Reckoning Finally Here?”
@LeeHepner
will continue covering the finals days of trial on the Big Tech on Trial Substack!
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We're now looking at a 2011 email from Chris Barton regarding the importance of Google getting defaults:
"Without the exclusivity, we are not getting anything. Without an exclusive search deal, a large carrier can and will ship alternatives to Google."
Murphy is getting upset.
Good morning. Day 40. We're back with DOJ's cross exam of Chicago School economist Kevin Murphy.
First fact: In Apple's 2012 proposal to Google, Apple proposed setting the Google default as an *option* alternative to allowing users to choose their on default search provider. /
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Here’s my write-up from the first day of action!
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This morning, lawyers for The New York Times filed a motion seeking public access to admitted trial exhibits in
#USvGoogle
that have yet to be publicly posted. The motion acknowledged that “the Court has taken steps to make the trial more option,” but argued that “in several
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Judge Mehta said he didn’t want to stop the trial and asked if he could declare the DOJ attorneys “essential”. Dintzer said he thinks they will have to be deemed essential if their motion is denied. So if it’s up to Judge Mehta, the trial will continue through the shutdown.
DOJ lawyer Kenneth Dintzer just told
@Google
search trial judge Amit Mehta that they will have to ask the court to stay the historic
#monopoly
trial if/when a government shutdown takes place.
@JusticeATR
The total trial time set originally is 10 weeks, ending mid-November.
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On Day 12 of
#USvGoogle
, Microsoft executive Jon Tinter testified that Microsoft’s efforts to obtain a default search engine agreement with Apple included offers to share in excess of 100% of revenue/gross profit. Microsoft was willing to take a multi-billion dollar loss in the
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Some highlights/quotes from Microsoft CEO Satya Nadella’s testimony in
#USvGoogle
this morning. He will re-take the stand after lunch for additional cross examination from Google in the afternoon. (Quotes are from handwritten notes so may not be 100% verbatim.)
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Long day of court just wrapped in
#USvGoogle
with Judge Mehta hearing argument on the motion filed by The New York Times this morning.
A number of issues were discussed but the biggest question the court still seems to be considering is whether to require the parties to
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In
#USvGoogle
, DOJ has just called Google’s VP and GM of Ads Team Jerry Dischler.
Before beginning his examination, DOJ’s lawyer argued the redactions in this slide from DOJ’s opening statement presentation should be made public.
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On Day 39 of the Google Search trial, one of the most guarded numbers got leaked, and the Chicago School reared its head. From
@LeeHepner
.
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DOJ re-called economist Michael Whinston to continue his expert testimony today. Whinston added three high-level opinions to his earlier testimony in the case about relevant markets and Google’s monopoly power:
1) Google’s search distribution contracts give it exclusive
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Summing up today at US v. Google (more to come in article):
1.) The day was dominated by Robin Lee’s extremely long cross examination. It lasted about 4.5 hours and he (along with much of the Court) was exhausted by the end. I thought Bill Isaacson landed some punches, but…
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The Eastern District of VA “rocket docket” is real: Google intends to rest its case by next Thursday, which means the ad tech trial will have lasted just 2.5 weeks. Compare that to the 10 week Google Search trial. Incredible.
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Most of the Google trial will not be audio-streamed outside of the courthouse. But the opening states will be. If you’re interested in listening, there’s a phone number you can call for dial-in access. Opening statements start at 9:30 AM ET.
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Quick lunch break thoughts on
#USvGoogle
- The government’s direct examination of Stephanie Layser of News Corp. was very strong. She testified Google’s DFP was not preferred, in fact it was “clunky and slow” using old technology, but due to dominant ad demand, it was necessary
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issue of publicly posting exhibits quickly. He also ruled that he would be unsealing testimony about a previously admitted document that may be somewhat embarrassing to Google — but was not confidential.
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"the govt’s prosecution has received much more coverage than Google’s defense"
Big Tech on Trial has attended every day of the Google Search trial in person and summarized testimony from both sides. It could be that Google's defense provides a less compelling narrative.
The DOJ’s big 10-week antitrust trial against Google is almost over.
If you’ve been reading about the trial in the news, you may not have gotten the whole picture.
That’s because the govt’s prosecution has received much more coverage than Google’s defense…
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current Google employees. The trial didn’t go into a single closed session throughout the week and Judge Mehta unsealed the closed-session testimony of multiple previous witnesses.
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That’s a wrap for Week 2 of
#USvGoogle
. Court opened up to the public for about five minutes today to deal with some housekeeping issues — but we didn’t get to hear any testimony from Apple senior exec John Giannandrea.
Judge Mehta told the parties he’d like to resolve the
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Week 4 of
#USvGoogle
concludes with testimony from Google employee Amit Varia in the States’ case and continued expert testimony from economist Michael Whinston.
This week I believe we heard from a total of 8 witnesses including Microsoft’s CEO and several former/
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When court re-opened, Google’s lawyer carried on with public cross-examination of Roszak. They finished up with Roszak quickly, and then DOJ called former Google software engineer Eric Lehman. Lehman worked at Google for 17 years on search quality/ranking until he left in 2022.
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Google’s opening statement focused the court on two issues it would fight the DOJ hard on: 1) whether companies like Apple made Google the default because Google is the best product and enhanced user experience (not merely because Google could afford to pay billions of dollars);
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It's been nearly six months since the close of trial proceedings in US v Google, but we're back for closing arguments this week.
The delay provides a useful reminder: Time is on the side of the monopolist.
How we got here, and what comes next, below.
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One other tidbit from the first 30 minutes of Dischler’s testimony: DOJ put up an exhibit showing that in 2019 Google earned over $98 billion in revenue from ads on its owned and operated properties. Dischler said this number did not include ad revenues from YouTube.
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DOJ just completed its cross examination of Pichai. States will ask Pichai questions on cross after lunch break.
During last hour, DOJ asked Pichai about a meeting he and other Google executives had with Apple executives including CEO Tim Cook in 2018. DOJ presented Pichai
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New motion by Google seeks to enforce original trial schedule, which DOJ is now apparently trying to extend.
It also included as an attachment a list of DOJ’s expected witnesses. Not sure if this was public before.
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After more than a week of back and forth in
#USvGoogle
about DOJ's public posting of admitted exhibits, the site with the exhibits is now back up:
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The unspoken implication of this line of questioning: Google marketed the fact that companies could apply legal holds to Google chats to “meet legal or preservation obligations” but didn’t apply these legal holds to its own employees’ chats.
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Just posted my recap of the first week of action in
#USvGoogle
— and a preview of what lies ahead:
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The US v. Google ad tech antitrust trial just ended!
At the start of the day, each side had their full legal teams in court and Julia Wood and Karen Dunn thanked and recognized them, making clear this would in fact be the last day, which Judge Brinkema too acknowledged
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The Google Search monopoly trial is taking place in the same federal courthouse where Microsoft lost its monopoly trial in 1998.
There’s an exhibit about the Microsoft trial in the hallway that Judge Mehta walks by every day.
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Murphy likens a search engine to the tires on a car. If the tires don't work, it reflects poorly on the automaker. Apple and Samsung are incentivized to choose the search engine that works best.
(Note to self: Investigate potential foreclosure in automaker-tire agreements.) /2
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We’ve just hit the lunch break in
#USvGoogle
without any open court yet so far today. The trial was scheduled to stop at 12:30 pm on Fridays, but they said they would continue at 1:15 pm today — presumably to wrap up the testimony of Apple senior exec (and former Google head
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DOJ continues its examination of Google ad executive Jerry Dischler by asking questions about whether Google ever increased revenue by raising search ad prices by 5, 10, or 15%.
I don’t have verbatim notes for this whole exchange, but (continued below in thread
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He also commented that it might be “embarrassing” for Google or Roszak but that didn’t substantially outweigh the document’s probative value.
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This is a trial about Google's Search monopoly. This is an antitrust trial. And the virtue of antitrust is that it protects competition.
If Google and Apple are splitting markets, or if Google is effectively paying Apple not to enter, that's patently illegal. And on that note...
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Court just wrapped for the day in
#USvGoogle
with brief argument over how to handle the document Judge Mehta ruled to admit yesterday that he acknowledged may be “embarrassing” for Google.
DOJ argued that the closed-session testimony about the document should be unsealed on the
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The Google Witness Factory has some credibility issues...
My summary of Day 13 of the
#USvGoogle
ad tech trial.
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Rangel will face additional cross-examination from Google after lunch break ends.
Later today, DOJ is expected to call Jim Kolotouros, Google’s VP of Android Platform Partnerships. Kolotouros was mentioned several times in DOJ’s motion to sanction Google for its chat practices.
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Excited to be kicking off this account by sharing the first article I wrote on the Google antitrust trial:
I’ll be at the courthouse bright and early tomorrow to cover the start of the trial. Stay tuned for more updates.
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Whether Google has a superior search engine is not on trial. The DOJ case says that Google search *is* better, precisely because it has access to user data and scale benefits.
And that's why Google pays $26.3B+ per year for default status across devices, browsers and carriers. /
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- More to come in an article, but the picture was painted of a non-innovative firm dominating an industry merely because no other firm could compete on ad demand.
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No court for
#USvGoogle
tomorrow so Week 5 of the trial is now complete. The DOJ has been wrapping up its case this week and only has a couple more witnesses to call. For the next two weeks we will be hearing primarily from the States’ witnesses before Google begins its defense.
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The Justice Department today introduced evidence that when Google faced competitive threats to its digital ad business, it acquired potential competitors like DoubleClick and AdMeld instead of competing on the merits.
From
@leah_nylen
and
@daveyalba
:
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Today, one witness said publishers can choose not to use Google's ad exchange to sell their ad space the same way we all have "the option to starve to death.”
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After re-opening court to the public, DOJ turned its questioning to focus on Kolotourous’ communication practices at Google — namely, copying Google lawyers on business emails and keeping his Google chats on the history-off setting after he was put on a litigation hold.
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At
#USvGoogle
today, we're hearing from Google's final witness, expert economist Kevin Murphy. The thrust of Murphy's argument is that default agreements actually *enhance* competition, because they reflect the priorities of partners like Apple, Samsung, Mozilla, etc. 1/
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First break of the day in
#USvGoogle
with Sundar Pichai on the stand.
Google’s direct examination of Pichai lasted only about 45 minutes so we’re already into DOJ’s cross examination.
DOJ presented Pichai with a letter sent by Google’s former general counsel to his counterpart
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Proposed findings of fact, conclusions of law, and post-trial briefs due on February 9. Replies due on March 22.
Closing arguments will take place May 1-3, 2024. A ruling sometime thereafter...
We're adjourned.
#USvGoogle
/fin
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Week 2 of
#USvGoogle
begins with DOJ calling Verizon executive Brian Higgins to the stand. We only got about 20 minutes of open-court testimony before court went into closed session for discussion of the confidential details of Google and Verizon’s agreements.
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- She revealed that it was impossible to negotiate with Google, and that repeated support and feature requests were ignored and not acted on. They would accept “little to none” of her redline in contract negotiations.
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Line for
#USvGoogle
courtroom already formed an hour before court is set to start for the week with Alphabet CEO Sundar Pichai taking the stand.
Beyond his general oversight of Google and its dealings, Pichai will likely be asked about his specific
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DOJ has passed over its expert witness Antonio Rangel to Google for cross-examination. Google’s questions so far have tried to push Rangel on his qualitative conclusions about the power of defaults.
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A good amount to unpack from the morning session in
#USvGoogle
, which included testimony from both former Google engineer Eric Lehman and DuckDuckGo founder/CEO Gabriel Weinberg.
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respects the degree of public access still falls short of what the law requires.”
The New York Times’ memorandum in support of their motion is available here:
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DOJ has continued to press Google chief economist Hal Varian for downplaying the significance of scale in Google search’s success.
DOJ also showed an email where Varian wrote: “I agree with the point that defending Google’s profits is difficult, but I’m going to try anyway.”
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Week 6 of
#USvGoogle
ends with close to an hour of argument about public access to the trial.
Things got testy at times — at one pointed, Judge Mehta said to counsel for The New York Times: “You’ve shown up in Week 6 of this trial and demanded the sky…”
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