Google’s exclusive deals to be the default search engine on mobile devices and PC browsers block rivals from as much as half of all queries conducted in the US, the Justice Department’s economic expert said at the company’s antitrust trial Monday.
(Bloomberg) — Google’s exclusive deals to be the default search engine on mobile devices and PC browsers block rivals from as much as half of all queries conducted in the US, the Justice Department’s economic expert said at the company’s antitrust trial Monday.
“The power of the defaults is very significant,” said Michael Whinston, an economist and professor at the Massachusetts Institute of Technology, in his second day of testimony. Whinston, who was hired by the Justice Department to conduct an empirical analysis for the case, previously testified on Oct. 6. “When you see Google paying billions and billions and billions, there has to be a reason. That’s the first thing that, as an economist, slaps me in the face,” he said.
The Department of Justice, in a landmark case, argues that the more than $10 billion that Alphabet Inc. pays to companies including Apple Inc., Samsung Electronics Co. and others to ensure it’s the default allows it to maintain a monopoly on search. Those agreements bar Google’s rivals – like Microsoft Corp.’s Bing and DuckDuckGo – from tapping into one-third to 50% of all searches that take place in the US, Whinston said.
Another 20% of searches in the US are made through Google’s Chrome browser, which people download themselves, he said. Google sets its own search engine as the default in Chrome.
About 33% of all US searches will always go to the default, Whinston estimated, meaning that a rival search engine could only ever hope to garner about 17% of US search traffic.
Whinston based his estimates on internal numbers from Google, Microsoft and other search engine operators that were provided to the Justice Department in the case.
Whinston said he conducted calculations based on data that showed when users shifted their defaults. That included information on how people responded when Apple dropped Google Maps as its default service on iPhones in favor of its own app — estimates that Google itself has relied on for years, he said. It also involved information on desktop searches, where users can more easily switch browsers, comparing Macs – where Apple’s Safari is the default browser with Google as the search engine – versus Windows PCs where Microsoft’s Internet Explorer and Edge are the default with Bing.
Whinston also examined how users responded when Russia and the European Commission required Android mobile phone manufacturers to offer a choice of search engines in response to antitrust complaints. In the Russia case, Yandex NV gained more than 20% in market share after the choice screen was introduced, Whinston said, “a complete reversal of share” between Yandex and Google within three years.
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