Google v Justice Department; Pichai Sundararajan v Judge Amit Priyavadan Mehta

Silicon Valley 3.15pm / DC 6.15pm

A U.S. judge hearing the Justice Department's antitrust lawsuit accusing Google of unlawfully maintaining monopolies in the internet search market let stand key claims made by the federal government. This case moving forward is a big win for consumers & DOJ Antitrust Division. US DoJ vs Google set for trial starting September 12 (five weeks from Tuesday) in DC court. And a reminder, this is the search engine monopoly case. The AdTech case is moving quickly through a different federal court (EDVA).

Google, a unit of Alphabet, had asked for summary judgment on all the government's claims in the case.

U.S. Judge Amit Priyavadan Mehta, in a decision made public in Washington on Friday, granted Google's request on some grounds but allowed the remainder of the claims to proceed to trial next month.

Google breathes a sigh of relief as a federal judge narrows the scope of the antitrust case against them. Turns out, they can promote their own products in search results without it being labeled as a monopoly. But the DOJ can still argue that Google is abusing its power.

Just around 37 hours ago, the US Judicial Panel on Multidistrict Litigation has issued an order denying Google’s motion to stay the transfer of a Texas-led multi-state adtech antitrust lawsuit. The stay on the lawsuit going back to Eastern Texas from Southern New York expires in seven days.

The Justice Department sued Google in 2020, accusing the $1.6 trillion company of illegally using its market muscle to hobble rivals in the biggest challenge to the power and influence of Big Tech since it sued Microsoft Corp in 1998.

Department of Defense’s Joint Pathology Center has millions of tissue samples from servicemembers & veterans. Google came dangerously close to landing a monopoly on these samples, letting them charge DoD for its own data. 9 Days ago, Senator Elizabeth Ann Warren want answers on these shady dealings.

Back to Judge Amit Priyavadan Mehta. Mehta is also hearing a case brought against Google by the attorneys general of 38 states and territories.

Mehta tossed out accusations brought by the states that Google made it harder for internet users to find specialized search engines, like Expedia for travel or OpenTable for restaurants, saying the states "have not demonstrated the requisite anticompetitive effect in the relevant market."

Google said Friday it appreciated the court's "careful consideration and decision to dismiss claims regarding the design of Google Search" in the case brought by the states.

"We look forward to showing at trial that promoting and distributing our services is both legal and pro-competitive," added Kent Walker, Google's chief legal officer. Not yet a comment from Pichai Sundararajan (born June 10, 1972), better known as Sundar Pichai, CEO of Alphabet Inc. and its subsidiary Google.

Google has denied any wrongdoing in both cases.

Google has a (quasi-)monopoly in digital advertisements. Charlie Munger once stated that Alphabet has one of the widest moats he has ever seen.

- FCF Margin: 21.2%

- ROIC: 20.9%

- FCF Yield: 3.5%

- Exp. FCF Growth (3 yr): 19.0%

- CAGR since IPO: 23.8%

Colorado Attorney General Phil Weiser said he was pleased with Mehta's opinion, adding: "We will continue to evaluate how to best press forward and establish Google’s pattern of illegal conduct that harms consumers and competition."

Mehta noted Google LLC operates the largest U.S. internet general search engine whose "brand name has become so ubiquitous that dictionaries recognize it as a verb." He noted Google in 2020 had nearly 90% market share and advertisers spend over $80 billion annually alone to reach general search users.

"A company with monopoly power acts unlawfully only when its conduct stifles competition," Mehta wrote.

Mehta also said that the government would have to show that each particular action - for example how Google handles search advertising - is a violation of antitrust law. This means that the government cannot show a string of actions and argue that these cumulatively break antitrust law.

The government, which filed its lawsuit in the waning days of the Trump administration, has argued that Google illegally paid billions of dollars each year to smartphone makers like Apple, LG, Motorola and Samsung, carriers like Verizon and browsers like Mozilla to be the default search for their customers. Mehta declined to throw out that argument.

The Justice Department did not immediately comment.

In late April, a U.S. judge in Virginia denied Google's motion to dismiss a separate Justice Department antitrust case focused on advertising technology, saying the government's case was strong enough to go forward.

The government has argued that Google should be forced to sell its ad manager suite. Google has also denied any wrongdoing in this case.

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