Newsletter Thursday, November 14

At around 7 p.m. on May 16, a courier working for Google hand-delivered a cashier’s check to the US Department of Justice.

The amount was for $2,289,751.

That sum would cover the damages for one of the claims the Justice Department — and 18 states — brought in its sprawling antitrust lawsuit against the company’s advertising practices.

But more importantly for Google, it would mean the case would never see a jury.

The antitrust trial, which began on Monday and is expected to last another month, has been configured as a bench trial. There’s no jury. US District Judge Leonie Brinkema, an appointee of former President Bill Clinton, is deciding the facts and the law of the case from a Virginia courthouse.

The Justice Department accuses Google of running a monopoly in the digital advertising market, illegally crushing rivals and trapping clients in its ecosystem to drive up prices for everyone. The case is different from a different Google antitrust trial decided earlier this year, where a judge found the company illegally monopolized the search market.

Google says the Justice Department has overstated the power the company has in digital advertising. If Brinkema decides Google is an illegal monopoly in the market, it could force the company to break itself up.

Only one of 5 counts required a jury

While criminal defendants have a constitutional right to a jury trial, the rules for civil cases are more nuanced.

The Justice Department brought five different counts against Google under the Sherman Act, the landmark 1890 law that allows for the Justice Department to break up monopolies.

The first four acts called for “injunctive relief,” meaning the judge could later order Google to change its practices.

The fifth was for damages, meaning money.

How much money? After some back-and-forth in court, the Justice Department said the monetary damages would amount to the sum that eight different federal agencies overpaid for online ads they purchased through Google’s marketplace between January 2019 and January 2023. That amount would then be tripled, consistent with the Sherman Act. And then they’d add on interest.

According to a couple of professors who the Justice Department hired to do the math, that all added up to $2,289,751.

For context, Google’s parent company Alphabet, is worth $1.9 trillion.

Lawyers at the Justice Department’s antitrust division were caught off guard by the check, one said at a later court hearing. The check was paid the night before a major filing was due. Google didn’t admit to any wrongdoing on the fifth count, but their lawyers at Gibson Dunn said they “voluntarily tendered to the United States payment for the full amount of monetary relief it could receive” to make the issue “moot” and “streamline” the rest of the litigation.

And besides, Google’s lawyers said, it was cheaper than the legal fees the company would incur for continuing to fight it.

“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 lawyers wrote.

But the real victory for Google was avoiding a jury.

Juries are less predictable than judges, and may not be sympathetic to a massive tech company.

“There’s a more robust public sentiment against big tech now than there maybe has ever been,” Rebecca Allensworth, a professor of antitrust law at Vanderbilt University, told BI.

The Justice Department “virtually never” brings antitrust cases to juries, Allensworth told BI. But in this case, they wanted one. The government lawyers complained to Brinkema, the judge, arguing the fifth count should stand and the damages ought to be decided by a jury. The amount Google gave them in the check was wrong, they said, citing court documents that they said showed the damages should be calculated differently.

In the end, Brinkema sided with Google. The $2,289,751 figure came from math done by the Justice Department’s own experts, she noted in a ruling. And the fact it was a cashier’s check, issued by Wells Fargo, gave the Justice Department no excuse for refusing the money to keep the issue open, she said. (The precise check amount was initially redacted in court documents, but Brinkema later made it public.)

“It’s an absolute ‘here’s the money,'” she said at a June 7 hearing. “If they could have given you a wheelbarrow of cash, it would be the same thing.”

The trial, she said, would be sans jury.

A Google representative directed BI to an earlier statement the company issued in response to the judge’s decision.

“DOJ’s contrived damages claim has disintegrated,” the company said in a statement at the time. “We’re glad the Court ruled that this case will be tried by a judge.”

Representatives for the Justice Department didn’t respond to a request for comment.

At the end of June 7 hearing, Brinkema applauded Google and the Justice Department for their clever legal arguments.

“I want to commend counsel. Your arguments are great,” she said. “I’m looking forward to this trial because the quality of the lawyering has been excellent.”



Read the full article here

Share.
Leave A Reply