Google steals DOJ tactic to dodge owing damages by paying DOJ upfront.
Last week, Google sent a cashier’s check to the US government that it claimed in a court filing covers “every dollar the United States could conceivably hope to recover” in damages during the Google adtech monopoly trial scheduled to start this September.
According to Google, sending the check moots the government’s sole claim for damages, which in turn foils the government’s plan to seek a jury trial under its damages claim. While Google disputes liability for any of the government’s claims, the payment serves to “prevent the tail from wagging the dog,” the court filing said.
It’s unclear just how big the check was. The court filing redacted key figures to protect Google’s trade secrets. But Google claimed that testimony from US experts “shrank” the damages estimate “considerably” from initial estimates between $100 million and $300 million, suggesting that the current damages estimate is “substantially less” than what the US has paid so far in expert fees to reach those estimates.
According to Reuters, Google has not disclosed “the size of its payment” but has said that “after months of discovery, the Justice Department could only point to estimated damages of less than $1 million.”
“Rather than require the court to wade into DOJ’s uncharted and unwarranted demand for a jury trial, and to prevent the waste of resources that would result from defending against a damages claim worth far less than a fraction of the cost of litigation, Google has tendered the United States payment of the full amount of damages it seeks, trebled, plus prejudgment interest,” Google’s court filing said.
It seems like Google is banking on buying its way out of a jury trial, preferring instead for a judge to weigh the trial’s highly technical and unusually complex facts.
Stanford Law School professor Mark Lemley told Reuters that he felt “skeptical Google’s gambit would prevail.” Lemley suggested that Google may be overlooking that “a jury could ultimately decide higher damages than whatever Google put forward.”
Google told the court that the DOJ’s plan to devote a significant portion of the trial to educating a jury could prolong the litigation, while mooting the damages claim and ordering a bench trial “streamlines the litigation.”
The Department of Justice is unlikely to back down from this fight after joining 17 states in filing the antitrust lawsuit against Google last year.
In a recent court filing, the DOJ maintained allegations that Google violated the Sherman Act when it “stymied competition in open web display ad tech markets for over a decade,” harming rivals as well as consumers.
Additionally, the DOJ “separately” requested a jury trial—which Google flagged as “unusual” for an antitrust trial—because it had “standing to seek damages from Google as a direct purchaser of Google’s ad tech services.”
The government initially estimated that federal agency advertisers (FAAs) had “spent over $300 million on open web display advertising.” These were allegedly overpayments stretched over a decade of Google allegedly charging supercompetitive prices while “suppressing competitive bidding from rival ad exchanges.”
Google argued that the US scrambled to throw together this damages claim as an “afterthought” at the last minute before filing its complaint, while the FAAs testified that they “found lots of value” in Google’s advertising services.Advertisement
To moot damages, Google cited a 2023 case where the US government was sued by a citizen demanding a tax refund. In that case, the US argued “emphatically” that a full payment of the tax refund mooted the plaintiff’s damages claim, while insisting that the court agree that the case be mooted even if the check was never cashed, because a “plaintiff may not prolong a case merely by refusing to accept a valid tender.”
It would seem hypocritical if the US opposed Google’s motion to moot the damages claim, Google suggested, since the US government in the tax refund case “assured the court that the same mootness rule would apply if the parties’ positions were reversed.”
The government has not yet responded to Google’s motion or made any indication that it has accepted Google’s payment, Reuters reported, but a response is expected within the next month.
However, the day after Google’s court filing, the DOJ filed a motion opposing Google’s request for summary judgment. In that filing, the government noted that “while direct evidence of monopoly power is ‘rarely available,’ this is one of those rare cases because Google has flexed its power to ‘control prices’ for over a decade.”
The US has accused Google of trying to get the lawsuit tossed “based on an incorrect recitation of the law and a myopic retelling of the facts” that is also “contrary” to “economic reality.”
Google’s market share “is more than nine times larger than its next biggest rival and twice as large as the next nine largest rivals combined,” the DOJ argued last week.
The DOJ hopes to convince the court that Google should be forced to sell its ad manager suite. Otherwise, “Google’s illegal scheme to monopolize certain digital advertising technologies” will only further entrench Google’s control over the open web display ad tech markets that “fund the news media, content creation, and free expression of ideas that underpin the open Internet as we know it,” the DOJ alleged.
