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Wednesday, June 12, 2024

Apple lodges confidentiality protest on Day 2 of Google antitrust trial

The second day of a landmark anti-monopoly trial against Google began on Wednesday with a protest from Apple against two numbers that the Justice Department mentioned in its opening statement the day before.

It underscored the tense confidentiality restrictions surrounding the trial, which transparency activists have decried as shrouding the dealings of one of the world’s most powerful companies in secrecy.

U.S. District Judge Amit Mehta will determine at the end of the trial if Google has abused monopoly power in its search and search advertising businesses and if penalties are warranted. That decision is months away.

In the meantime, lots of details of Google’s business are likely to emerge under rules intended to preserve confidentiality of sensitive business information. On Wednesday morning, Ryan Travers, an attorney representing Apple, which is not a party to the antitrust case, complained that government attorneys may have violated those rules in regard to Apple. Travers said that two numbers mentioned in passing in the Justice Department’s opening statement might create a “misperception” that they came from Apple’s confidential information. “That would be a violation of the rules of engagement here,” he said.

Google attorney John Schmidtlein chimed in. “The remark that was made would leave the public with the impression that that number either came from them or from us.”

Justice Department attorney Kenneth Dintzer told Mehta that the two numbers he had said quickly on Tuesday were based on external sources, not from privileged information provided by Apple or Google. “This one slipped out,” he said. The Justice Department did not provide further clarification.

Significant portions of the evidence in the trial have been sealed as trade secrets, despite activists’ push for greater transparency in a trial that could affect how billions of people interact with the internet. The court set up a public telephone line for Tuesday’s opening statements, but the rest of the months-long trial, including Wednesday’s session, will be accessible only in person.

Mehta acknowledged Apple’s protest but said that he would leave the matter for now.

“From where I’m sitting, everyone has been quite diligent,” Mehta said. “There’s a large volume of material here.”

None of the lawyers specified what numbers were in question on Wednesday. The complaint appeared to refer to Dintzer saying, “In 2020, Google paid 4 to 7 billion dollars under the ISA,” on Tuesday morning, according to a court transcript. Dintzer was discussing the search giant’s Information Services Agreement, or ISA, with Apple, in which Google pays for its search engine to be the default on iPhones and other Apple devices.

Dintzer also said in his opening statement that Google pays more than $10 billion per year to device and browser makers to attain default status for its search engine. That broader statement did not draw objections from Google or Apple.

Ahead of the trial, activist groups had criticized the court’s decision to reject requests for a public telephone line so people around the country could listen in on the trial.

“The public has a very real stake in this case, and neither Google nor the Court should be allowed to shroud it in secrecy,” Katherine Van Dyck, senior counsel at the American Economic Liberties Project, said in a statement.

Some of the witness testimonies in coming weeks are expected to be closed to the public because of concern they’ll be discussing trade secrets. This is not uncommon in trials about companies’ business practices.

After the Apple interjection, the Justice Department resumed its questioning of witnesses. First on the stand Wednesday was Chris Barton, a former Google executive who had negotiated default search-engine deals with mobile carriers for the company. Prosecutors then recalled Google chief economist Hal Varian who had testified on Tuesday.

In response to public interest in the case, the E. Barrett Prettyman federal courthouse in Washington, which sits just northwest of the Capitol, set up an overflow room for members of the public to watch the trial, as well as two media rooms with seats for at least 100 reporters.

The courthouse was less frenetic on the second day of trial, with fewer viewers in the overflow rooms. The courtroom’s six rows of wooden benches remained full of lawyers, reporters and other spectators.

The Justice Department will have the next four weeks to present its case, question witnesses and present evidence. After that, the state attorneys general will have two weeks to make a supplementary case. Google will have three weeks starting Oct. 25 to make its defense.

A judgment in the case likely will not come until well into next year.

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