Google only improves products under pressure, US argues

Google — under fire in court for allegedly resting on its laurels thanks to its 90% market dominance — only made an effort to beef up the quality of its search engine in the European Union after being hit by a record antitrust fine, according to internal documents revealed in the US Justice Department’s monopolization case against the tech giant.

The Justice Department is arguing at a trial in Washington that Google’s failure to improve its products – unless put under pressure – proves that it’s illegally maintaining its monopoly.

Alphabet Inc.’s Google planned to improve its European search results only after a record 2018 European antitrust fine, according to the documents, which revealed that Google executives discussed a plan dubbed “Go Big in Europe.” The plan aimed to improve results in France and Germany in 2019 and 2020 with changes such as adding post-game soccer video highlights, more local content and news, pronunciation practice for different languages and more information on local television options available for streaming.

The catalyst was a 2018 EU antitrust order that forced Google to offer a choice screen giving Android phone users five search engine options to choose from, according to US antitrust enforcers trying the case.

“‘Go Big in Europe’ is product investments above and beyond business as usual to make sure Google is top of mind for EU users,” one presentation from 2020 introduced as evidence by the DOJ showed.

Google intended to hire more than 80 new employees and spend more than $200 million on the initiative, according to additional documents shown in court last week. The plan was to roll out the updates subsequently in the UK, Spain, Italy, Poland and the Netherlands. 

“We didn’t know what would happen” with the choice screen, testified Ben Gomes, who was head of Google’s search team at the time. “This was trying to figure out what would happen.”

In the antitrust trial, which is in its ninth week, the Justice Department alleges that Google illegally maintained a monopoly over internet search by paying billions of dollars a year – as much as $26 billion in 2021 – to be the default search engine on web browsers and mobile phones.

Google has denied the allegations, saying it spends billions of dollars on research and development each year and has incorporated new technologies like machine learning and AI to improve results. Google declined to comment on its “Go Big in Europe” initiative or how much it has been implemented.

In his testimony, Gomes rejected the idea that Google only made the improvements in response to the EU choice screen. “We were making investments in Europe all the time,” he said. “We invest in those countries in a very big way.”

With the choice screen, Google wanted to launch “new things that are visible that we could use in marketing campaigns,” he said. “Some of these things like soccer and so on may be more appealing in a marketing context against other people marketing things at us.”

The choice screen was developed by Google in 2019 to assuage EU competition concerns after the bloc’s regulators told the company to stop squeezing out rivals from the mobile search market. Google has a final appeal pending at the EU’s top court, asking to either annul the EU’s 2018 decision or cut the fine to a “significantly lower amount.”

In 2021, Google scrapped its initial choice screen, which fell short in addressing the EU’s concerns. The current version provides access to the most popular search engines across European countries.

The Android case was one of a series of antitrust clashes between the EU’s antitrust arm and the search-engine giant that’s already led to a trio of penalties totaling more than €8 billion ($8.8 billion) for abuses across other Google services.

The Justice Department’s main economic expert, Michael Whinston, offered evidence of how the choice screen impacted Google’s market share in various European countries. He estimated based on the rate of switching in Europe that if there were a choice screen in the US, only about 10% of US users would move to a different search engine.

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