Google on Trial in 2023: A Year of Scrutiny
Forbes Middle East: Earlier this month, Google was dealt a devastating blow: Epic, maker of the hit video game Fortnite, trounced the tech giant in a high-stakes antitrust trial. After just three hours of deliberation, a jury in San Francisco unanimously found that Google violated California and federal competition laws, raising questions about the future of the company’s app marketplace and the lucrative business around it.
The worst part for Google? That wasn’t even the most important court case the company faced this year.
For the tech behemoth, which celebrated its 25th anniversary in September, 2023 was a year of judgment. For years the trillion dollar company’s legal woes have been mounting in a variety of arenas. But this year, instead of just facing fines and settlements, Google actually headed into the courtroom for a number of historic trials, defending its competitive practices, hiring policies and industry contracts in an array of widely watched cases.
“It’s like nothing I have ever seen before,” Donald Polden, antitrust law scholar and dean emeritus at the Santa Clara University School of Law, told Forbes. Polden, who followed landmark tech antitrust cases involving AT&T and Microsoft in the 1980s and 1990s, added that Google seems to be in a “once-in-a-century storm” fighting an array of legal battles.
Google’s grueling year in court illustrates the company’s expansive reach and outsize power, which has rankled rivals in several markets and highlighted pay disparities in Silicon Valley. It also underscores a new phase in the reckoning for big tech companies: In the Trump era and the years immediately following, the reining in of big tech mostly involved congressional hearings, regulatory investigations, and lawsuits that could often be settled with dealmaking behind closed doors. Now the scrutiny has moved to open court, a dramatic forum that could spur actual reform in an economy-defining industry.
Reached for comment, a Google spokesperson pointed to previous statements for each trial, noting that the company would challenge the Epic ruling and disagreed with the juries in lost cases.
The Epic case, Google’s most recent setback, centered around the dominance of Google’s Play Store, and the 15% to 30% tax the company levies against software developers for subscriptions and in-app purchases. To circumvent those rules, Epic tried to charge its customers directly. In 2020, Google kicked Epic off its app store for doing so, and Epic sued it for anticompetitive behavior in reply.
The outcome of the Epic case was particularly notable because Apple had fought a similar one against the video game maker in 2021 and largely won. But there were some key differences in the judgements. First, Apple’s was decided by a judge after both companies waived their right to a jury trial. The Google trial was left to a jury, though the search giant had sought to bar a jury verdict. Neither side was allowed to reference the Apple trial—or the fact that Apple won—during the proceedings. (The Apple suit is still under appeal. In September, Epic asked the Supreme Court to hear the case.) Google’s defense was also undermined by evidence that it had deleted chats and messages related to its app store dealings, perhaps making it look to the jury like the company had something to hide—a point the Department of Justice has also made in its antitrust trial against Google.
“This is an example of the greatness of the American justice system,” Epic CEO Tim Sweeney posted on X hours after the verdict was announced. “A billion dollar company challenges a trillion dollar company over complex antitrust practices, and a jury of 9 citizens hears the testimony and renders a verdict.” In another post that night, Sweeney crowed, “Victory over Google!”
The presiding judge will hold hearings in January to decide on remedies for the case, which could include allowing rival app stores or lowering fees charged to software developers.
Despite the importance of that case, the biggest trial of the year for Google—and the rest of the tech industry, for that matter—was a landmark DOJ case over the distribution of Google’s iconic search engine. At the heart of the lawsuit, which was first filed in 2020 by the Department of Justice and a handful of states, are Google’s contracts with device makers, lucrative deals that make Google search the default option on phones. The crown jewel among them is a contract with Apple worth at least $10 billion, which makes Google the default search engine on the iOS software that powers iPhones and iPads.
The case was a spectacle that drew a number of high profile witnesses, including Google CEO Sundar Pichai, Apple head of software and services Eddy Cue, and Microsoft CEO Satya Nadella. The trial put the inner workings of Google’s business on display, including internal presentations touting the power of defaults. And the company’s rivals pulled no punches during their testimony. When Nadella took the stand, he said Google’s claim that consumers have a search engine choice was “bogus.”
Google’s most lowkey trial may have been the longest brewing. In October, the company began proceedings on a gender pay discrimination case brought on by Ulku Rowe, a Google Cloud engineering director—the first-ever salary discrimination case to go to trial in the company’s history. Rowe alleged that she was hired at Google at a lower “level” than several men in her role with similar backgrounds and experience and denied promotions because of her complaints.
The case was able to go to trial because of seeds planted years ago. In 2018, 20,000 Google employees staged a worldwide walkout to protest issues of misconduct and labor inequality. One of the demands from walkout organizers was an end to forced arbitration, which required employees to settle disputes outside of court. After the walkout, Google abandonded that rule, first for cases of harassment and assault, and later expanding it to all employee disputes.
Rowe, who participated in the walkout, filed her suit in September 2019. After two weeks of proceedings in October, a jury sided with Rowe, awarding her $1 million in damages. She said she hopes her case will galvanize other women to speak up.
“There are a lot of people that are saying, ‘I’ve been through this. I’m still going through this,’” Rowe told Forbes. “That has validated for me that this is not unique. This is happening at all levels, from the very junior to the very senior people. It is happening to women.”
This may just be the beginning of Google’s new legal reality. As the company heads into the New Year, it still faces remedy proceedings for the Epic case and awaits a decision on the DOJ case (and a remedies trial if Google loses). The company is also staring down another whopper of a trial expected next year: An antitrust case targeting Google’s advertising tech, and whether or not the company elbowed out competition with its services for ad auctions. In terms of legal woes, 2024 may not be much better than 2023. And the complaints headed to trial could also inspire new waves of private class action suits, Polden said.
“Google is immensely financially successful. They have to figure out the best course of action for these legislative onslaughts,” he said. “That’s just the price of doing business.”
