Today, Explained - In Google we antitrust

Episode Date: September 12, 2023

Google is headed to court over allegations its search engine violates federal antitrust law. The Verge’s Adi Robertson breaks down the case, and David Pierce explains how Google Search came to rule the internet. This episode was produced by Amanda Lewellyn, edited by Matt Collette, fact-checked by Laura Bullard, engineered by Patrick Boyd, and hosted by Noel King. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Lawyers for the Justice Department and for Google squared off today for opening arguments in a courtroom in Washington, D.C. To find information about the trial, I went to Google News. Then I googled Google antitrust trial stakes to find tape for my show Open. This court battle, it really matters because essentially it comes down to the way you and millions of people are searching the Internet on your smartphone. This is at the heart of the U.S. government's case against Google. Google is enormous. Is it so big because it's the best or because it tech blocked its competitors? It's the biggest antitrust trial in the U.S. in almost a generation, I learned on Google. But as regulators and legislators and regular people have grown annoyed and disturbed

by how much power big tech has, it won't be the last. Coming up on Today Explained, hot girl summer is over. We're kicking off hot antitrust fall. Google that. You won't find it. Amanda made it up. The all-new FanDuel Sportsbook and Casino is bringing you more action than ever. Want more ways to follow your faves? Check out our new player prop tracking with real-time notifications. Or how about more ways to customize your casino page with our new favorite and recently played games tabs? And to top it all off, quick and secure withdrawals.

Get more everything with FanDuel Sportsbook and Casino. Gambling problem? Call 1-866-531-2600. Visit connectsontario.ca. Hey Google, play today explained. Gambling problem? Call 1-866-531-2600. Visit connectsontario.ca. Hey, Google. Play Today Explained. Okay. Playing Today Explained. Addie Robertson is a senior editor at The Verge. She's in Washington, D.C. for hot antitrust fall covering U.S. versus Google. So over the next 10 weeks in Washington, Drust trial as the government looks into business deals,

making Google the default engine, search engine for things like Apple's Safari web browser. We're probably going to hear a lot from not only Google executives, but from executives of the companies that Google is working with and that the government is alleging it's cutting deals with in order to maintain its search dominance. We're probably going to hear from Sundar Pichai, the CEO of Alphabet, and potentially a lot of other figures in Google. So it's going to be a lot of the people

making the big decisions around Google search. The two sides are bringing enormous assets to bear with the DOJ authorizing additional resources for its team and Google hiring three outside law firms to bear with the DOJ authorizing additional resources for its team and Google hiring three outside law firms to prepare for the case. This case represents one of the first attempts in years for the U.S. government to go after a big tech company for monopolistic behavior in a really powerhouse industry like search. The question is, is Google too powerful?

Is it a monopoly that should be broken up? The allegations here are that Google search, which is still after more than two decades, the core of Google's business, has managed to corner the market on search engines by cutting deals with Apple and other companies that other potentially more innovative search engines can't compete with. Google is the gateway to the internet and a search advertising behemoth.

Google achieved some success in its early years, and no one begrudges that. But as the antitrust complaint filed today explains, it has maintained its monopoly power through exclusionary practices that are harmful to competition. So it's not illegal to have a dominant position in the market and really nobody, including Google, argues that it doesn't have a dominant position in search. The argument here is that Google is managing to sustain this position through means that violate antitrust law, through means that are anti-competitive, that are discouraging people from innovating in ways that have nothing to do with the government says Google making a better product. It just says that it's buying its market

share rather than innovating. If the government does not enforce the antitrust laws to enable competition, we could lose the next wave of innovation. If that happens, Americans may never get to see the next Google. Okay, so this is interesting. If you are competitive, if you're doing something better than your competitors are, then you deserve their business. Cool. Good for you. You've done it. But the allegation is that Google isn't doing anything better. It's just what? It's like buying its customer base? The argument really is that, yes, Google is buying its market share. So, for example,

if you have an iPad and you open up Safari and you want to search for something, then Google has struck a deal with Apple that makes it the default search engine. And it spends allegedly billions of dollars on this placement. And this means that you're not necessarily consciously choosing Google whenever you go to search something. You're just getting directed there because Google has a lot of money to spend. That's sort of the core of the argument here. How does Google respond? Google responds that even if there are these default agreements, that it's very, very easy to choose another search engine and that people are picking Google because Google's good. Their slogan is competition is just a click away. And so they point to the fact that some of the places that have made these agreements,

like Mozilla with Firefox, actually have tried to break away from Google and use other search providers, and they've come back, Google argues, because the customers just weren't satisfied. And so they're saying that people are really actively choosing Google and that Google is just providing the best service. And so these deals are helpful, but they're not the reason that it's dominant. Among people like you, people who have expertise in this, who would a betting person say is going to win? Is there a sense that one side here is definitely a lock? I don't think that there's one side that's a lock here, but I will say that it is seen to be fairly difficult to win an antitrust case in the United States, that the United States has for a long time based

antitrust rules on what is known as the consumer welfare standard, which is basically are there things you can point to that are specifically harming consumers of a service, not necessarily other companies. And in a lot of cases, that means are there prices going up for consumers or are they being actively denied something? And when you have a tech sector where a lot of services are free and a lot of allegedly anti-competitive behavior is these sort of gentle nudges, then it can be really difficult to prove anti-competitive behavior. And so I think that this certainly isn't a lock for Google, and certainly search is a huge business. It would be potentially very damaging if something restricted it. But I think that it's a case that could be difficult for the Justice Department to win. Let's say that the government does win. What can it demand Google do? A potential option is just it tells Google to stop doing the behavior

that it's largely complaining about in the suit, which is making these deals with companies to prominently place its search engine somewhere as the default. And so it could say you are really, if you open up Safari, you should be asked to pick a search engine, that it shouldn't be able to strike these deals. In a really extreme case, it shouldn't be able to strike these deals. In a really extreme case, it could do something like break up the company. That's something that is potentially on the table in antitrust trials. That seems like something that would be pretty far on the end of things it could ask for. Are there any precedents for a case like this? In the U.S., the clearest comparison point for this is probably really going all the way back to the 1990s to Microsoft.

It's Reno time. Okay, who wants a piece of Reno? The Justice Department has charged Microsoft with engaging in anti-competitive and exclusionary practices designed to maintain its monopoly in personal computer operating systems and attempting to extend that monopoly to internet browser software. Microsoft was found to be acting anti-competitively in locking out access to competing web browsers in order to favor Internet Explorer. The case revolves around Microsoft's control of the so-called operating system, the basic software that acts as the brains of today's computers. More than 90% of computers today use Microsoft's Windows operating system.

The Justice Department alleges that Microsoft tried to use that dominance to gain control over the market for so-called browsers, the software that connects users to the Internet. And that was really just one of the biggest antitrust trials in tech. And people who are looking at this trial are definitely seeing echoes of Microsoft's case. Microsoft's actions have stifled competition in the operating system and browser markets. But most importantly, it ended up with Microsoft being found to have acted anti-competitively, but then it ended up going to a settlement where the really severe remedies that were on the table, like breaking up Microsoft, never actually came to pass.

And there's an open debate over whether this meant that really not that much happened or that while the strictest legal remedies were put into place, it put Microsoft on notice. That it made Microsoft more cautious and made it less likely to crack down on potential competitors like Google that were operating in this new web space. What does the past and what does the current moment tell us about what exactly the stakes are for Google in this trial? The stakes are that Google is a company that was innovative for very long that did some really tremendous things for the tech industry, but now is a pretty settled incumbent. And I think that we're seeing now that the government is trying to shake up its dominance a little bit. And I think that precedent does tell us potentially that this could change Google's behavior if it feels like it has to be more cautious. It could also show that really there's not necessarily a great way under U.S. antitrust

law to break up large tech companies, that some of the biggest tech antitrust cases have ended up just, they've changed things for a while and then the industry has consolidated again. That was Addie Robertson of The Verge. Coming up this year marks 25 years of Google search. We're clicking history. Support for Today Explained comes from Ramp. Ramp is the corporate card and spend management software designed to help you save time and put money back in your pocket. Ramp says they give finance teams unprecedented control and insight into company spend. With Ramp, you're able to issue cards to every employee with limits and restrictions and automate expense reporting so you can stop wasting time at the end of every month.

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BetMGM operates pursuant to an operating agreement with iGaming Ontario. It's Today Explained. Google us. There was a time, not so long ago, when to get information, one would turn to Encyclopedia Britannica or some such. But like Pitbull, Google changed the game. How did it happen?

I asked David Pierce, friend of the show, editor-at-large of The Verge, to take us back to the early days of Google Search. The sort of ancient internet history version of this story starts in about 1997, 1998, when two PhD students at Stanford have this idea about a different kind of way to search the internet. Search engines didn't really understand the notion of, you know, which pages were more important. If you type Stanford, you get sort of random pages that mention Stanford. This obviously wasn't going to work. It obviously wasn't going to scale. One of the big problems with the internet in the 1990s was there were lots of new websites,

there was lots of stuff happening, and there was just no way to find it. Like Like there just literally wasn't a way to discover new things on the internet without just aimlessly typing in URLs to your browser. That was a bad experience. So they had this idea, built out a search engine, they called it Google, they did a demo for one of their professors where they searched the name Gerhard Kasper, which was the president of Stanford at the time, in both AltaVista and their new thing, which they called Google. In AltaVista, it came up with a picture of Kasper, the friendly ghost, which was a bad answer. Boo? And their search engine came up with the right guy.

And so almost immediately, they launched this thing into the world. They're like, okay, we've built this new tool. We think it can help people discover information around the Internet. And almost immediately, it starts to grow really fast. I mean, in history, you have never had access to just, you know, pretty much all the world's information in seconds. And we have that now. And to make it really useful, you have to have a good way of finding whatever it is that you want. And that's precisely what we work on at Google.

It wasn't the biggest thing for a long time. Google as this dominant force on the Internet is really a phenomenon of the last 15 years, not the last 25 years. But you really could make the case that that moment in 1998 was a sort of inflection point for the rest of the internet ever since. I didn't know this story about Larry Page and Sergey Brin testing it with the name of Stanford's president. You said they put it into AltaVista also. So there were other search engines at the time. They weren't inventing something. They weren't inventing something new. No. Google gets a lot of credit for, I think, doing a thing better rather than kind of inventing a new thing out of whole cloth.

Right? This idea that the internet is big and sprawling and full of lots of things and those things are hard to find was a pretty well-known phenomenon even many years before Google came out. And at the time Google started to come up, there were three real players, but really just two. So the three were AltaVisa, Yahoo, and Google. And Yahoo was kind of a separate thing. It was essentially just a phone book for the internet. They had a bunch of weird ideas about human editors who would put cool new websites in, and if you wanted new websites, they had things categorized. It was the white pages for websites, which made sense when the internet was very small and pretty quickly didn't make any sense anymore.

What AltaVista had done, it was the first company to go out and essentially discover the whole internet. It built this thing called a crawler that could go from link to link and webpage to webpage and start to actually ingest all of the information on a website. And when you do that, now you have this big database of files that you can actually search through

when somebody looks for something. So it became an actual searchable document in essentially the internet. And AltaVista was hugely successful. And then it had a bunch of disastrous corporate maneuvers and bad ideas about how things should work. And it kind of slowly fell apart. Why does everyone in this town use AltaVista? Is it 1997?

But AltaVista had a lot of really, really, really good ideas before Google had them. But what Google did right was show up. And it was very fast. It was very simple. It just kind of worked. And Google had a couple of different ideas about how to rank things in search results that made it, in this sort of ineffable way, just feel better. Like, Google understood the internet better than AltaVista did. In the same way that, like, when you start using TikTok, TikTok has this feeling of it just gets you in a way that nothing else does. Google felt like that compared to all the other search on the internet. Does Google search still work the same as it did 25 years ago, 20, 25 years ago? No. Google is vastly more complicated than it was 25 years ago. The early thing that really worked for Google was this thing called page rank. And the idea essentially was that instead of ranking something by how many times a word

appears on that page or how many times a person has visited that page, which are both decent metrics of success, but not actually really great. Google's idea was, what if we take into account the number of websites that link to this page as a metric of success. I wanted to find, you know, basically say, you know, who links to the Stanford homepage? And there's 10,000 people who link to Stanford, so you can only show 10. You know, and we ended up with this way of ranking links based on the links. If I am going to link to a news article in my news article,

odds are that news article is good and worth your time and worth reading? Or an informational page. If lots of folks are linking to that, that's probably a strong signal that it's a good informational web page. This is a vast oversimplification of how Google worked even then. But Google essentially built the whole search engine around this idea of relevancy rather than just kind of popularity or keywords. And that was one of the things that really worked. That is still true for Google. But Google now is this massively more

intensive thing to try to figure out. Google cares about everything from page speed to the order and structure of the page. Google cares about where things are and the size of the headings and how things are located. And it's this black box that everyone is perpetually trying to figure out because ranking high in Google results is so important. But it used to just be that if you wrote a very good web page, you could at least sort of hope that people would link to you and that would send a strong signal to Google and all would be well and good. That is no longer how it works. No one really knows how it works, I think, potentially, including the people who build the system at Google. It's very hard to fully understand, but it is wildly complicated now.

I want to bring this back around to the issue that's at hand this week, which is the accusations, the allegations of antitrust, of monopolistic behavior. Once upon a time, human beings just did stuff. Reporters wrote stories, scientists wrote papers, and on and on and on. And now we want that stuff to come up on Google. We want that stuff to be the first thing that people see. Did we change our behavior in significant ways to make ourselves visible on Google in ways that are maybe coming into play in this question of how big is Google and is it too big? Yes, in huge, huge, huge ways. I think recipe websites are probably the best example of this.

Do you want to know the secret technique that food bloggers use to show up at the top of Google search results? The thing you see on every recipe website is it has a big title with a very simple sort of straightforward, you know, chocolate chip cookies recipe. And then it has 2000 words of someone telling you about like what they did that day and all their feelings about the world. And then it has a bunch of subheadings that say, you know, what to replace flour with or how to make this vegan or whatever. And then you get all the way down to the bottom of the page, past a bunch of ads, past a bunch of videos, past a mountain of texts you didn't ask for. And then it gives you this very simple recipe card. Every single thing on that page from the way the recipe card is structured, like literally the underlying data is written on that web page in a way so that

Google can index it and understand what the ingredients are, what the steps are all this stuff, all the way up to how long the pages what the headings are, whether they're h twos or h threes, like literally the size of the font on the page, all of that is dictated by these guides to how to get to the top of Google search results. Because a lot of people search chocolate chip cookie recipes. And if you can be one of the first couple of links that shows up when people do, you're going to make a lot of money.

It's truly that simple. And there is a really huge diminishing return between being the first link and the fifth link and the 10th link and like god help you the 50th link you're nowhere basically google decides how well your website is answering the searchers questions addressing their problems or deepest desires if you want to show up on top of google's search results page then follow these principles like these are the things that have totally changed the way the internet looks and works because of Google. And what Google would say is it's just optimizing for good web pages and good content. So something like that's true,

but it's stuck in this game where it says, here's what we think success looks like. And then people go and just absolutely game the crap out of that system to make success look like whatever they want it to look like. And then Google has to change the rules and people chase those rules. And so we're now stuck in this place where the internet looks like what everybody thinks Google wants. Whether that's true or not, by the way, is actually hard to know because Google doesn't share a lot about how the search rankings actually work. So everybody is just kind of throwing spaghetti against the wall and trying to see what sticks and then making these massive inferences based on what happens, whether they're right or not. All right. So now we have the U.S. government saying, not just in this lawsuit, but in all

of the cases, in all of the ways it's digging around Google, this company simply has too much power. It cannot dictate, it should not be able to dictate what we see on the internet, everything down to what a chocolate chip cookie recipe looks like. Yeah, I think that's right. And I think one of the things that the DOJ is going to argue in this case is that what we need is a more competitive search landscape, right? That if AltaVista 25 years ago had continued to make good decisions and had continued down the road of, frankly, having a lot of Google's ideas before Google did, there's a world in which there were real competitors here. But Google, at first, out-innovated all of them and spent a decade just being much better at this than anybody.

They moved faster. They figured out it was a huge moneymaker. They did the interface right. They made a lot of really good decisions. And then Google spent tens of billions of dollars a year making sure that it was hard for you to get to other search engines. And they made themselves the default on the iPhone, and they built the Chrome browser with Google built in. So what the DOJ, I think, is going to argue, and what I think is fair to say in a lot of ways, is that we'd be better served if there were lots of different ideas about how to find information

on the internet, and that what Google has done is not just reshape the internet kind of in its own image, but make it very hard for there to be other ideas about how the internet can work. David Pierce, editor at large, The Verge. Thank you, as always. This was great. My pleasure. Thank you. Today's episode was produced by Amanda Llewellyn. Three L's if you want to Google her. It was edited by Matthew Collette and engineered by Patrick Boyd. Senior fact checker Laura Bullard subscribes to Encyclopedia Britannica. I'm Noelle King. It's Today Explained.

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