The federal government’s first monopoly trial in the modern Internet age is less than a week old, but a central figure is already emerging: data. His role, his commitment and his power are central issues in the Justice Department’s case against Google.
The government alleges that Google bribed and bullied smartphone makers like Apple and Samsung, as well as browser maker Mozilla, into being its preferred search engine, thereby funneling far more data to Google and cutting off competitors.
According to the government, data is the engine of Google’s success. Data is added with each search query, improving search results and attracting more users, generating even more data and advertising revenue. And Google’s ever-growing data lead is an insurmountable obstacle for competitors, the government claims.
Data is “oxygen for a search engine,” said Kenneth Dintzer, the Justice Department’s lead attorney, in his opening statement Tuesday.
The government is not arguing that Google broke the law when it became a search giant. Instead, the government claims that after Google’s dominance, the company broke the law with its tactics to defend its monopoly. Contracts with industry partners as the default search engine were the weapon – exclusive deals that eliminated competitors, the government claims. So Google is now protected from competition by a fortress built from data.
Google responds that the government’s case is a figment of misleading theory that is not supported by facts. The government has chosen to “ignore inescapable truths,” said John Schmidtlein, Google’s lead attorney, in his opening statement.
This truth, according to Google, is that the company achieves its leading position in search due to its technical innovation. It competes with others for default placement contracts and wins primarily because Google is the best search engine. Google argues that these contracts help lower smartphone prices and benefit consumers.
Google emphasizes that the government overstates the importance of data. In a brief filed this month, the company said: “Google does not dispute that user data can improve search quality, but Google will demonstrate that returns to scale are diminishing.”
The trial continues this week, with the Justice Department continuing to argue its case. The first witness scheduled to testify Monday is Brian Higgins, a Verizon executive in charge of mobile device and customer marketing. The process is scheduled to last ten weeks. A verdict by Justice Amit P. Mehta will be delivered next year.
Google has 90 percent of the search engine market in the United States, while Microsoft’s Bing is a distant competitor with less than 5 percent. According to Google, the difference is explained by the intelligence of its engineers and not by the size of its extensive data trove.
To make its point, Google will interview an expert, Edward Fox, a computer scientist at Virginia Tech. Professor Fox conducted a “data reduction experiment” on behalf of Google to estimate how much Google’s search quality would decline if far less data was used – roughly the amount of data available to Bing. The result, according to Google’s filing, was that the data difference only explains part of the difference in search quality between Google and Microsoft.
Google’s public messaging on this issue has been consistent over the years. But the government claims the messages were fraudulent. In his opening statement, Mr. Dintzer said Google had “misled the public about the importance of data.”
To demonstrate the deception, the government introduced as evidence last week emails among senior Google employees arguing the point. Hal Varian, Google’s chief economist, was the first Justice Department witness questioned about outages and data.
At issue were comments Mr. Varian made in a 2009 interview with the technology news site CNET.
In the article, Mr. Varian said: “The scale arguments are quite wrong.”
By way of explanation, he added in the article: “It’s not the quantity or quality of the ingredients that makes the difference. It’s the recipes.” It was a clever analogy, where the ingredients are the data and the recipes are the clever algorithms were written by Google’s engineers. It reached a wider audience when Mr. Varian’s statement was picked up in a Time Magazine article.
But soon after, Udi Manber, a senior engineer on Google’s search team, expressed objections to the economist’s description in an email to Mr. Varian. “It is absolutely not true that size doesn’t matter,” Mr. Manber wrote. “We make very good use of everything we get.”
In an email to other Google employees, Mr. Manber wrote: “I know it reads well, but unfortunately it is factually incorrect.”
A lot has changed since then. The government introduced the emails to cast doubt on the credibility of what Google says in court. These are a few excerpts at the start of a lengthy non-jury trial that will produce reams of evidence, testimony and rebuttals that Judge Mehta will have to weigh and consider.
However, it is already clear that the debate over data in search – whether or not it has market-determining power – is a central issue that both sides will most likely have to return to again and again in the process.