In a pivotal antitrust trial, the U.S. Justice Department slammed Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, the leading search engine, for channeling billions to quash competition and safeguard its online search monopoly.
The outcome may seek remedies, potentially separating Alphabet's search business from other products like Android and Google Maps.
Influential tech giants, including Amazon.Com Inc (NASDAQ: AMZN), also face similar lawsuits from global regulatory authorities.
The heart of the case is a profound question: Which is more vital for a successful online search business: the algorithm that governs search results or the data tracking user clicks?
Google's Chief Economist, Hal Varian, a key figure since 2002, has maintained that the algorithm takes precedence over data quantity.
Varian argued that it's not merely the quantity or quality of ingredients but the recipe that matters. He asserts that knowing how to utilize data is a critical factor.
However, some of his Google colleagues, including former Head of Search Quality Peter Norvig, believe that more data is paramount.
They argue that Google's dominance is underpinned by the sheer scale of data it accumulates. This internal dispute has now become a focal point in the trial.
The ongoing antitrust trial against Google centers on the scale of data it collects and whether this dominance stifles competition.
The U.S. government contends that Google's extensive expenditures maintain its monopoly by paying up to $10 billion annually to become the default web browser and smartphone search option.
These agreements allegedly hindered rivals like Microsoft Corp (NASDAQ: MSFT) and DuckDuckGo from acquiring enough data to compete effectively.
According to the Justice Department, Google obtains 16 times more data than its closest competitor, Microsoft's Bing. The trial will likely last until mid-November.
Previously, Meta Platforms, Inc.'s (NASDAQ: META) Instagram drew attention for connecting pedophiles and guiding them to content sellers via recommendation systems.
Amazon.Com faced a U.K. class-action lawsuit for allegedly using a "secretive and self-favoring algorithm" algorithm to abuse its dominant position in the online marketplace.
Price Action: GOOG shares traded higher by 1.20% at $139.15 on the last check Thursday.