Google Antitrust Trial Reveals Search "Economics Only Cigarettes or Drugs Rival"

Google has been criticized for its insistence on keeping much of the evidence in the trial and its proceedings under wraps. And now we know why they wanted that. 

Testimony from one of its executives reveals that Google believes its search advertising is one of the greatest business models ever created, with "economics that only illicit businesses selling cigarettes or drugs could rival." Which probably does not make for sympathetic court room. JL 

Ashley Belanger reports in ars technica:

The US Department of Justice has finally posted what judge Amit Mehta described at the Google search antitrust trial as an "embarrassing" exhibit that Google tried to hide from the public. The document in question contains meeting notes that Google’s vice president for finance, Michael Roszak, "created for a course on communications."  In his notes, Roszak wrote that Google's search advertising "is one of the world's greatest business models ever created" with economics that only certain "illicit businesses" selling "cigarettes or drugs" "could rival."

The US Department of Justice has finally posted what judge Amit Mehta described at the Google search antitrust trial as an "embarrassing" exhibit that Google tried to hide from the public.

The document in question contains meeting notes that Google’s vice president for finance, Michael Roszak, "created for a course on communications," Bloomberg reported. In his notes, Roszak wrote that Google's search advertising "is one of the world's greatest business models ever created" with economics that only certain "illicit businesses" selling "cigarettes or drugs" "could rival."

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At trial, Roszak told the court that he didn't recall if he ever gave the presentation. He said that the course required that he tell students "things I don’t believe as part of the presentation." He also claimed that the notes were "full of hyperbole and exaggeration" and did not reflect his true beliefs, "because there was no business purpose associated with it."

According to Bloomberg, Google repeatedly objected to the document being shared in court, claiming it was irrelevant to the DOJ's case. Then, after Mehta allowed the DOJ to present the document as evidence, Google tried to seal off Roszak's testimony on the document, which Mehta granted, but later said that Google's request put him "in a pickle."

“This doesn’t contain anything confidential,” Mehta told Google. “I understand it’s somewhat embarrassing for the witness.”

 

Sealing Roszak's testimony made it harder for the public to understand the context of the document, Mehta worried. Ultimately, Mehta not only denied Google's request to redact portions of the document but also "said he would unseal the portion of Roszak’s testimony related to it," Bloomberg reported.

Beyond likening Google's search advertising business to illicit drug markets, Roszak's notes also said that because users got hooked on Google's search engine, Google was able to "mostly ignore the demand side" of "fundamental laws of economics" and "only focus on the supply side of advertisers, ad formats, and sales." This was likely the bit that actually interested the DOJ.

"We could essentially tear the economics textbook in half," Roszak's notes said.

Part of the DOJ's case argues that because Google has a monopoly over search, it's less incentivized to innovate products that protect consumers from harm like invasive data collection.

A Google spokesman told Bloomberg that Roszak's statements "don’t reflect the company’s opinion" and "were drafted for a public speaking class in which the instructions were to say something hyperbolic and attention-grabbing." The spokesman also noted that Roszak "testified he didn’t believe the statements to be true."

According to Bloomberg, Google lawyer Edward Bennett told the court that Roszak's notes suggest that the senior executive's plan for his presentation was essentially "cosplaying Gordon Gekko"—a movie villain who symbolizes corporate greed from 1987's Wall Street.

The debate over how much of Roszak's notes could be shared with the public ended with an agreement between the DOJ and Google on all trial exhibits. By 9 pm every trial day, Google or other third parties can object to the DOJ posting trial exhibits like Roszak's notes online. Otherwise, the DOJ can post trial exhibits "as soon as it is reasonable to do so," Mehta ruled.

The DOJ posted the trial exhibit yesterday, so now you can read Roszak's "embarrassing" notes here.