Friday, October 14, 2022

European Commission authoring Statement of Objections (antitrust charges) against Google's ad business while DOJ is rumored to be preparing its second antitrust lawsuit and Google announces summary judgment against the pending one

This is a transatlantic story. Let's start in the European Union and then cross the Pond.

Brussels-based Reuters antitrust expert Foo Yun Chee reported yesterday that the European Commission's Directorate-General for Competition (DG COMP) appears to be readying a Statement of Objections (SO) against Google's $100B+ ad business. The preliminary antitrust ruling, against Google can then defend itself through further written argument and at a hearing (and a final decision could still be appealed), may be handed down in early 2023, though there appears to be considerably greater uncertainty about when than if it will happen.

Foo Yun Chee always has great sources in the EU antitrust community, one of whom told her that "the Commission has asked third parties to delete confidential details in their submissions, usually a precursor to allowing Google to access documents following the receipt of a statement of objections." Indeed, in Brussels antitrust circles this is commonly considered a harbinger of an SO.

The European Commission has already ruled against Google three times, and has defended two of those decisions (one in full and other for the very largest part) in the EU General Court, from which Google can appeal on to the European Court of Justice, but all factual findings are final after the EUGC has spoken.

Exactly one month ago--on September 14--the EU General Court (which used to be called the Court of First Instance) affirmed almost the entire Google Android ruling. The aspect that matters most to me--because app developers like me are now totally dependent on competition enforcement against both Apple and Google (in that order--is that the EUGC also agreed with the Commission's finding that competition at the device level doesn't discipline the platform duopolists' treatment of developers.

Google's ad tech business is also facing a $25 billion class action brought by Geradin Partners (here's the antitrust boutique's press release, which points to a decision by the French competition authority concerning Google's ad tech business) on behalf of publishers. Technically, those are two parallel cases: one in the UK and one in the Netherlands, with the latter covering the entire European Economic Area (EEA), which consists of the EU's Single Market plus a few smaller countries.

Europe may not be the only continent on which Google will have to defend its ad tech terms and practices: In August it was reported by Bloomberg--and picked up by other media, such as TechCrunch--that the United States Department of Justice is preparing a second antitrust lawsuit against Google, which it may bring on behalf of the United States in the District of Columbia or the Southern District of New York. The focus of that second case will be Google's digital ads business.

There are structural differences between the two jurisdictions, but definitely some parallels between an SO in the EU and a governmental complaint in the United States.

That second complaint hasn't been filed yet, though at the time it looked it was potentially even going to happen in September. This is obviously just a subjective feeling, but I believe it would look better if the DOJ first--or at least shortly after a second Google lawsuit--brought a case against Apple that it's reportedly working on. Suing Google twice but not doing anything about Apple's conduct wouldn't strike the right balance in my humble opinion. To be fair, it is very meaningful that the DOJ will support Epic Games against Apple in a week from today. Here's my preview of the Ninth Circuit appellate hearing: I'm optimistic.

Meanwhile Google will try to defeat the first United States v. Google lawsuit in the months ahead. A joint status report filed by the DOJ, 36 states, and Google mentions that Google is going to seek an extension of the page limit for summary judgment motions from 45 to 50 pages, and intends to bring such motions against the federal government's lawsuit as well as against that of the 36 states. I doubt that those motions will put an end to the proceedings in district court, but it will, at minimum, be interesting to read the parties' legal argument at the summary judgment stage, and a streamlining of the case is less unrealistic than a complete rejection of the complaints.

Here's the filing the parties made with the United States District Court for the District of Columbia yesterday:

United States and 36 States v. Google: Joint Status Report