- The US government accuses Google of illegally paying an estimated $10 billion annually to smartphone makers
- Google defends itself by saying the revenue share agreements are legal and reasonable
Google CEO Sundar Pichai is going to testify in a major U.S. antitrust trial which aims at Google’s dominant position in search and related advertising sector on Monday, according to Reuters.
Gov: Google illegally paid an estimated $10 billion annually to smartphone makers
As a giant with a 90% market share in the search market, the government alleges that Google defends about $10 billion annually to smartphone suppliers such as Apple and the largest wireless carrier in America AT&T.
The government charged that Google paid the fee to keep its default search engine on mobile devices, thus allowing the search giant to monopolize the lucrative advertising market and boost profits.
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Google: The revenue share agreements are legal and reasonable
Google argues that the revenue-sharing agreement is legitimate and that it has made investments to keep its search and advertising business competitive. It also argues that people can switch to another search provider on their own if they are dissatisfied with the default settings.
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Reuters says that Pichai will likely be asked about the company’s investments aimed at keeping its search competitive, especially as smartphones took over, and innovation in search advertising. The government, in cross examination, may ask why the company pays billions of dollars annually to ensure that Google search is the default in smartphones.This is not the first time Google has been put on trial due to its monopolistic behaviour. This time, however, the result could have major ramifications. Previously, Eddy Cue, Apple’s senior vice president of services, and Satya Nadella, Microsoft’s chief executive, both cited a search deal with Google as evidence to confirm the company’s efforts to secure its position as the default search engine for devices.
