“Google paid large sums of money to smartphone manufacturers such as Samsung and Apple to monopolize the Internet search market.” (U.S. Department of Justice)
“The payment was made to ensure that Google operates properly on the smartphones of that manufacturer. “It was a measure for consumer convenience.” (Google CEO Sundar Pichai)
On the 30th of last month (local time), Google CEO Pichai, who publicly testified in court three years after the U.S. Department of Justice filed a lawsuit against Google for violation of the anti-monopoly law in 2020, engaged in a fierce battle with the Department of Justice. At the trial held today in Washington DC federal court, CEO Pichai testified for over three hours.
Previously, the U.S. Department of Justice reported that Google paid $26.3 billion (approximately 36 trillion won) to mobile phone manufacturers and wireless carriers such as Samsung and Apple in return for setting Google’s web browser ‘Chrome’ as the default search engine for smartphones. They filed a lawsuit alleging that they maintained an illegal monopoly by using profit sharing as leverage.
CEO Pichai, who appeared in court that day, acknowledged that he paid money to the smartphone manufacturer, but explained, “I paid it to ensure that Google operates properly on the smartphone devices of that manufacturer.” The idea is that there were concerns that Apple, which already operates its own web browser ‘Safari’, would try to reduce the usability of Chrome if it did not provide financial incentives. According to the New York Times (NYT), of the $26.3 billion paid by Google to manufacturers, the majority, or $18 billion, went to Apple.
In response to Microsoft CEO Satya Nadella, who appeared as a government witness on the 2nd of last month, saying, “Competition is virtually impossible due to Google’s dominance,” CEO Pichai said, “Microsoft’s Internet Explorer provides updates once every 1-2 years. For a long time, Chrome released a new version every six weeks. “Chrome’s search dominance is the result of innovation and early investment,” he countered.
American media outlets, including the Wall Street Journal (WSJ) and NYT, predicted that Google had a high chance of winning the case, but said that if it lost, the company could be split up. In the United States, if it is proven that a company has violated anti-trust laws, the company can be divided into several companies and their ownership can be restricted.
If the court rules in favor of the U.S. Department of Justice, there is a possibility that the Fair Trade Commission or Korea Communications Commission will begin a related investigation in Korea as well. The Fair Trade Commission previously cleared Naver and Daum of Google in 2011 for preloading search services and apps on smartphones based on the Android operating system (OS).
However, unlike at the time when Google’s market share in the domestic search market was only around 10%, the situation is different, with Google’s domestic search market share from January to September of this year reaching 30%, quickly catching up with Naver (58.1%), which ranked first. lost. In fact, in 2021, the Fair Trade Commission imposed a fine of over 200 billion won along with a corrective order in relation to charges that it forced manufacturers such as Samsung Electronics to use only Google OS.
There is also an analysis in the IT industry that if Google loses, Samsung Electronics and Apple (iPhone) will not be free from responsibility. Currently, Samsung Electronics smartphones come with Google apps such as Chrome and Gmail (e-mail) installed as standard. Samsung Electronics has not released an official position regarding this lawsuit.
Some say that governments around the world have recently drawn their swords against large platform companies. In Korea, Google was fined 40 billion won by the Fair Trade Commission in April this year for interfering with the launch of competitors’ games by mobile game companies in order to strengthen the monopoly position of the app market ‘Google Play’. Naver and Kakao Mobility were also fined 20 billion won for abusing their market-dominant positions in open markets and taxi calling services, respectively.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.