Google lost its first antitrust case, so what happens next? | The Vergecast

Intro (0s)

• The podcast begins with a humorous introduction, referencing Elon Musk's understanding of contracts.
• The host, Eli, emphasizes his knowledge of contracts, contrasting it with Musk's perceived lack of understanding.
• The podcast features a regular cast, including Alex Cranz, Alex Heath, and Lauren Goode.
• The episode will focus on Google's antitrust case and other news, despite the initial expectation of a quiet week.

Google's Antitrust Case (1m19s)

• The Department of Justice (DOJ) won its antitrust case against Google, finding that Google Search is a monopoly. The case was filed in 2020 under the Trump administration and continued under the Biden administration.
• The judge found that there is a distinct market for general search engines, separate from other types of search, such as social media or vertical search engines.
• The judge determined that Google is the only competitor in this market, and that even large companies like Apple have no other options for general search.
• The judge also found that Google's deals with Apple, where Google pays Apple to be the default search engine on Apple devices, are anti-competitive and contribute to Google's monopoly.
• The judge's ruling was 286 pages long and included detailed analysis of the search market and how Google's practices have harmed competition.
• Google argued that it is not in the market for search engines, but rather in the market for answering queries, and that any platform that answers questions competes with Google. The judge rejected this argument, finding that Google's search engine is distinct from other platforms.

Apple and Google's Lucrative Deal (10m36s)

• Google was found to have a monopoly in search and search text ads, and the judge ruled that Google acted anti-competitively by raising prices without considering competitors.
• The judge found that Google's exclusive contract with Apple, which pays Google $20 billion annually to be the default search provider on iOS, is anti-competitive. This contract includes conditions that prevent Apple from improving its own search capabilities and competing with Google.
• The case is in the "remedies phase," where the court will determine the punishment for Google. Possible remedies include fines, structural changes (breaking up Google), or behavioral changes (oversight of Google's behavior).
• Google has already stated it will appeal the ruling.
• The judge dismissed arguments that TikTok or AI are competitors to Google search, and he emphasized the importance of user data and feedback loops in search engine development.
• The text highlights the historical context of the case, drawing parallels to the Microsoft antitrust case from the early 2000s.
• The text emphasizes the impact of the Google-Apple contract on the tech industry, arguing that it has shaped the development of both companies and the broader tech landscape.

Implications and Future of Antitrust Actions (31m21s)

• The text discusses the implications and future of antitrust actions against Google, drawing parallels with the Microsoft antitrust case from the early 2000s.
• The speaker argues that Google's recent acquisition of AI company Character AI, without a traditional acquisition process, demonstrates their skittishness towards antitrust scrutiny and their desire to maintain their dominance in the market.
• The speaker suggests that Google's potential antitrust issues could lead to a similar situation as Microsoft faced, where they were forced to focus on compliance and legal battles, potentially hindering their ability to innovate and compete in emerging markets like mobile.
• The speaker highlights the role of Apple's resurgence in the tech industry, arguing that Microsoft's antitrust issues allowed Apple to gain a foothold in the market with the iMac and later the iPhone.
• The speaker emphasizes the importance of competition in the tech industry, arguing that Microsoft's antitrust case ultimately forced them to become more competitive and invest in areas like cloud computing.
• The speaker acknowledges the difficulty in predicting the future of the tech industry, particularly with the rise of new players like OpenAI and TikTok, and the potential impact of antitrust remedies on these companies.
• The speaker discusses the potential remedies that the government might pursue, including structural remedies like breaking up Google or behavioral remedies like restricting certain business practices.
• The speaker suggests that the government's focus on preventing Google from buying its distribution could significantly impact the tech industry, potentially forcing companies like Apple to invest more in their own search products.
• The speaker concludes by discussing the potential impact of the antitrust case on Google's internal operations, suggesting that the company will likely face significant changes and scrambling as they navigate the remedy phase.

Google's Big Bet on Gemini (43m12s)

• Google is heavily investing in its artificial intelligence (AI) project, Gemini, as a way to remain competitive and innovative in the face of potential antitrust challenges.
• Google sees Gemini as a key differentiator, aiming to make it a central part of its products and services, including the Pixel phone, Android, and the Nest lineup.
• Google hopes that Gemini will re-establish its position as an innovator in the eyes of consumers, as search has been a dominant force for the company for the past decade.

X's Antitrust Lawsuit Explained (45m5s)

• X, formerly known as Twitter, has filed an antitrust lawsuit against the World Federation of Advertisers (WFA), a marketing trade association, and several large companies, including Unilever and Mars. X alleges that these entities are withholding revenue by boycotting advertising on the platform.
• The lawsuit is widely seen as a desperate attempt by X to generate revenue after a significant decline in advertising revenue under Elon Musk's leadership.
• The lawsuit is based on the claim that the WFA has an enforceable contract with advertisers that prevents them from advertising on X. However, there is no evidence of such a contract, and the lawsuit is widely considered to be frivolous.
• The lawsuit is also seen as an attempt by Elon Musk to deflect blame for the decline in X's business and to intimidate advertisers into spending money on the platform.
• The lawsuit is likely to be unsuccessful, as there is no legal obligation for advertisers to spend money on any particular platform.
• The lawsuit is a reflection of Elon Musk's increasingly erratic behavior and his desire to create a platform that allows for the spread of misinformation and hate speech.
• The lawsuit is likely to have a negative impact on X's reputation and further erode its user base.

Lightning Round (1h4m5s)

• Disney+ is raising prices and cracking down on password sharing. The company has realized that streaming content costs money and that they need to increase prices to recoup those costs. They are also following the lead of other streaming services by adding live content, such as ABC News, to their platform.
• Microsoft and Delta Airlines are blaming each other for a recent flight cancellation issue. Delta Airlines experienced a major outage after a CrowdStrike attack, and the company's CEO blamed the issue on Microsoft's software. Microsoft, however, claims that their software was not the cause of the problem and that Delta Airlines refused their help because their systems were outdated.
• Humane, the company behind the AI pin, is facing financial difficulties. Internal sales data suggests that more pins are being returned than sold, and the company is reportedly struggling to refurbish the devices. There are rumors that Humane is trying to sell itself to HP.
• The Vergecast hosts participated in a TV shootout, judging the picture quality of various TVs. The shootout was a blind test, with judges comparing the TVs to a reference monitor. The Sony A95 OLED TV won the overall competition, while the Sony Mini LED TV won the mini LED category.
• Google is discontinuing the Chromecast dongle. The Chromecast protocol, which allows users to cast content to their TVs, will still be available, but the physical dongle is being discontinued. Google is now focusing on building Chromecast functionality into TVs and streaming boxes.