Antitrust Lawsuit Against Google Expected

in its complaint. We really don't. The only thing that we have is just broadly that it sounds like, at least what's been reported in the news, that they're looking at advertising and I think that's not a surprise because in Europe, Google some of its conduct within its advertising realm has already been penalized in Europe for abuse of dominance, so that isn't surprising. But but it could be that

they're also looking at other conducts. You know, these investigations really dive into the nitty retty of a company's business and really get into the weeds, and they could be looking at just about anything. There was a study done that gave a sort of a roadmap for what a complaint might look like, what do these studies authors suggest should be some of the components of the complaint right now?

That study did focus on the advertising world, and you know what they really said is that at this point, through developing its own business and through acquiring other companies, Google is not only a major displayer of ads. Let's say, on on its own websites that it owns, like Google Maps or YouTube, or just through a search when somebody's using Google to search a topic, but it also controls a lot of the products that are needed, you know, sort of across the whole supply chain to link up

an advertiser with a publisher. Let's say, you know, a third party website like The New York Times that wants to have ads displayed on its website. UM. And that because it has so much control of so many of the products need it is to link a publisher with an advertiser and get an appropriate ad put onto a website or connected to a search on the website, that it's able really to extract profits out of that chain and the prices that ought to be going to the

publishers and the advertisers. Um. And they're just looking at the way that toole supply chain works from publisher to advertiser, and how Google might extract sort of let's say, extraordinary, uh, super competitive fees out of that supply chain. And they don't really make any suggestions with respect to what the remedies should be. Um. But but they just show how Google has market power and how some of its practices could be considered unreasonably exclusionary under our anti trust laws.

Jen does Google have market power because it's the most popular search engine or doesn't have market power because it made acquisitions to increase its power? You know, June, It is probably a combination of both. Uh. Certainly, a company can gain market power by being desirable and again consumers like it, and so they gain all the business um, and they can gain a lawful monopoly in that way. Um. They can also gain market power by acquiring other entities.

But the issue really is that it's just the market power alone isn't enough to violate the laws against illegal monopolization. There needs to be market power shown, and that's why in this paper they focused on how to show market power. But then they need to show that there's been some sort of a conduct that can essentially leverages that market power. And excludes rivals. There needs to be unreasonable conduct that's exclusionary that helps to maintain that market power. That's where

it starts to cross the line. So what this paper did was it talked about the market power that Google has with certain ad products, and then some of the conducts that might help to maintain that market power, such as exclusionary contracts with certain third parties UM, a lack of interoperability with some of its functionality that might be needed for rivals. It's a way to keep the rivals out and to keep companies using their own product and

maintaining their market power. So it's those two steps, and and having that market power by itself isn't necessarily unlawful. What has the US been investigating Google on? Well, it's likely that the US has been been investigating Google's um conduct and activity in an advertising market. And I say it's likely because we know that Google has already been found to have abused its dominance by the European Commission in a couple of different areas, and one of those

areas is advertising. So it's kind of um handing some suggestions, so to speak, to the Department of Justice, which started looking at Google after the European Commission had already drawn its conclusions. Um Our laws from a nopolization are different from the European Commission's rules against the use of dominance, but there are a lot of similarities and the same kind of conduct can violate laws on both sides of the ocean. So if the conduct violated europe lause, there's

a possibility it also violates US law. And it certainly seems like that would have been a good place for the Department of Justice to start. It doesn't mean that they stopped there, you know, you know, once they issued what's called the civil investigative demand, which is like a

large subpoena. They're now getting into the company's documents, emails, text messages, things like that, and they're looking at the way they operate and do business and the decisions they make, and they could find some other area that Europe didn't focus on that they also believe, uh could be an example of Google, you know, exercising its dominance in an improper manner. So jan they're in the drafting stage right now, but doesn't seem likely that they will in fact file

the lawsuit. Well, it makes it pretty likely that it's going to bring a lawsuit, it will have to complaint and get itself prepared to go to trial if it does believe that the law has been violated. Once that complaint is drafted, of course, there could be a settlement. I mean, this is what happens in most cases, not just when a company is being investigated for violating the antitrust laws, but also let's say when a merger is

being investigated for potentially violating antitrust laws. The Department of Justice could conclude, yes, that it does, but then the companies can offer a settlement and I can get filed along with that complaint or after that complaint. So if the Department of Justice does draft a complaint get itself prepared to go to trial, there could be a settlement before it goes any farther than that, or in fact, that complaint could get filed in court and it could

start litigation. Is it surprising at all that this might be happening during the pandemic or do you think that most of the work, most of the investigation was done well before. Well, I think the investigation was started well before. I mean, I mean, this was this was all happening and all in the cards and on the way when the pandemic pandemic happened, It just happened to occur, I

think in the middle of this investigation. But the Department of Justice and the FTC for that matter, which is investigating Facebook, made it clear that their work is continuing, maybe from home, you know, and virtually, but it's continuing,

and that they weren't really dropping anything. Um. And the Attorney General, Bill Bard, did stay back in December that he had hoped that the Department of Justice would be able to reach some sort of a decision with respect to what was going to happen with its investigation of Google by this year, he had said, by this summer, and maybe that possibly could get pushed back slightly due to delays from the pandemic. But it's really been business

as usual, UM. With respect to the ongoing investigations that both the SEC and the Department of Justice, so the state attorneys general are also investigating Google. Is their investigation different? Is it parallel or is it different? It seems like from what's been reported that so far it's it's parallel

as well as combined. UM. It seems that there is some sharing of information and documents between the state attorneys general and the Department of Justice, and that the the state attorneys general are also sort of looking on their own and I think that's pretty typical and investigations that are really big, and like this Google investigation, I suspect at the end it'll probably all get combined and come together. Um that the if the Department of Justice files the lawsuits,

that the states will join into that lawsuit. Now they can also file their own independently if they want to go on different grounds or don't agree with the Department of Justice, but I think it more likely that they'll probably all end up coming together in the end. The FTC closed in investigation in into Google. Is there more evidence now or is it a change in administer rations. I don't think that it's a matter of more evidence.

I think that was actually a pretty exhaustive investigation back then. But really what it is is a change in that It could be a change in many things. It could be a change in the competitive dynamic, a change in the industries with respected different companies having entered or exited, or perhaps acquisitions have small ocquisitions having been made since then. And in addition, it could be a change in conduct.

You know, at that time they closed that investigation and there wasn't really any formal settlement with Google that require them in any legal sense to behave in a certain way. So Google has pretty much been free to behave and engage in its business in the way it's wanted to since then. And so it may be doing things differently now that do violate the law that at that time they simply weren't doing. For instance, June, A lot of

times exclusive exclusive agreements can violate the law. You know, if if a company with the dominant position or that's vertically integrated, it say, has access to some input that it's it's competitors need um and it it it or it exclusively ties up an input that its competitors need, let's say, with exclusive agreements, and now these competitors simply can't operate because they need access and they can't get access because there's exclusivity just for let's say Google. You know,

this can violate the law. And it's possible that Google has agreements like this that they didn't have back in two thousand thirteen. How significant would it be if the Justice Department decides to file a case against Google well, I think it's significant because, you know, it raises the

prospect of potentially requiring a breakup of the company. Now I think that that's unlikely, but it's not outside the balance of possibilities that if the d o J does feel it needs to file a suit, UH, it has to seek a remedy, and that remedy could be something that impacts Google's business significantly, UM, be it a breakup or restricting the way it does its business. UM. You know, the d o J did try to break up Microsoft many years ago and they were unsuccessful, but they came close.

And you know, both the Joe Simons from Sederal Trade Commission and UM the antitrust headed Department of Justice has said that they're all sorts of remedies they could seek, including breakup, and that they're not ruling that out. So it certainly raises the risks for Google if the d o J susan the company has to go to court.

Has Google made any acquisitions in the last few years that they could divest you know, I don't know about the time frame and and specifically the last three years, but they have made acquisitions over let's say, the last ten years in this ad in I'll call it the ad intermediary space. You know, these all of these sort of business to business products that are needed to connect

a publisher with an advertiser. One of those acquisitions, for instance, was double click um, which is one of these ad products. And it is certainly possible that one of the remedies the Department of Justice could seek would be the unwinding of the acquisition of one of these products needed along that supply chain. Are the House committees still investigating Google

and the other tech companies. Yes, they are, and they had said that they had hoped to publish their findings I believe fairly soon, like even this month or next month, but that has been delayed due to the pandemic. Now, you know, the House Committee investigation, I think ultimately has a bit of a different role or goal in mind

than the Department of Justice investigation. I think what they're looking at is whether or not there might be some new legislation or amendments to current legislation needed to deal with policing these big tech platforms and sort of this new digital economy that we live in. I think they've questioned whether or not the current antitrust laws that we have and the precedent that's been built up over the years, it's sufficient to tame the kind of behavior that the

d o J may be looking at. So their goal is is more about the legislative goal than an enforcement coal. Thanks Jen, that's Bloomberg Intelligence Senior Litigation analyst Jennifer Ree. Bloomberg Law editor Jordan Rubin joins me now to discuss those historic live Supreme Court arguments that wrapped up last week. I would say overall it went very well, I think,

possibly even better than people expected it to go. Obviously, there were probably one notable instance that got some people's intention of what sounded like a toilet flushing, But besides that, I think, you know, really the whole session went pretty well. The only problem that seemed to occur over and over was the justices forgetting to un mute their mute button. Some of the justices exactly, so they're sort of experiencing the same working from home issues that all of us

are working on conference calls, people on muting. So kind of stuff is far from the core us just happens to be in a Supreme Court argument. But on the whole that didn't really detract too much from the substance of what was going on, and really, given all that could have gone wrong, it went pretty well. So you mentioned the one thing, the flush heard around the country in the middle of an argument, and the justices didn't

say anything about it. They just kept going. It's been taken out of the permanent record, it's been taken out of the audio files as well as the transcript. Do we know any more about who did that? Well, as you can imagine, the Supreme Court isn't coming forward saying anyone in particular is responsible for the alleged flush. The

flush in question. There's some speculation perhaps that it could have been Justice Brier, given the timing of it and how he was interacting during the rest of the argument, But we really don't know, and it's unclear whether there's going to be a serious congressional investigation into this uh incident.

You know, there's some speculation. I think we look back on it kind of just as a funny thing that happened, showing that, you know, the justices are are human too, and if that's the worst thing that came out of this argument, I would say that kind of just underscores how much of a win the whole process was. So let's talk about some of the first Well, the first time we've heard Justice Clarence Thomas speak in ten arguments in a row. Oh yeah, that was certainly something that

and certainly not everyone was expecting. The last time Justice Thomas asked questions that an argument was last term, and before that, it was many years before that, and so there was some speculation perhaps that because Justice Thomas's reasoning that he said in not questioning during the arguments is that he doesn't want to take away time from the lawyers making their arguments. But one notable thing about the way that the Court carried out these arguments was that

the justices had turned to question in order. So really there was a set time for Justice Thomas and the rest of the justices to ask questions. And so it seems that in that setting he was more comfortable and perhaps didn't feel that he was detracting from the rest of the argument as opposed to just participating it, which he which he did, And the justices piggybacks off of his questions, saying, you know, following up on Justice Thomas's questions.

So from their view, it seemed anyway that they thought of the questions he was asking, we're good ones. He also had what I consider one of the most memorable moments. Maybe that's because I'm a fan of the Lord of the Rings. He referred to Frodo Baggins in one of his questions. Yeah, certainly another thing that you know, if you had that one on your coronavirus pandemic Supreme Court argument, bingo card, you can cross that one off. To Justice

Thomas referencing Frodo Baggins during the Supreme Court argument. That one came in the arguments over the electoral college, and that wound up spunning out all these hypotheticals of could you write in a candidate or as an elector could you wind up voting for Frodo Baggins over the person who your state actually essentially told you to vote for. And that was a fun hypothetical that the Justice Thomas

came up with. So certainly by the end of the session when that argument took place, he was feeling comfortable enough to have a little fun with it. It sounds like so the first case that Justice has heard, which involved Booking dot Com and a trademark dispute that featured two women attorneys. Was that a first for the Supreme Court? It wasn't the first ever for the Supreme Court, but

it's certainly a rarity. And if you were a uh, someone who doesn't follow the Supreme Court regularly and you tuned in for that argument, certainly you would be a bit misled into thinking that that's the normal representation of gender at the court. It's certainly Supreme Court arguments are

a male dominated phenomenon. But you had the first argument kicking off in this historic session of two female advocates Erica Ross from the Solicitor General's Office representing the federal government and veteran Supreme Court at to get Lisa Black arguing for the company. And so you had really two great advocates to female advocates launching off this historic session, and they certainly did very well as the test subject,

so to speak, for this new process. Any other first that you can think of Jordan's, well, there were some other advocates who are making their High Court debut interesting enough during this session. And you know, certainly your first Supreme Court argument is something that you'll remember, but certainly all the more during this pandemic, For example, in the

mcgurd against Oklahoma case. Uh, the Oklahoma State Solicitor General Mith and Monston Connie was making his High Court debut in that elector's case that we were talking about, the Frodo bag Ins case, let's call it. You had an attorney Jason Harrow making his High Court debut in the Trump's Tobcoena cases. You had Carry Dunne from the Manhattan

DA's office making a debut as well. So certainly it was first for them, and I'm sure it made it all the more interesting having that being one's first Supreme Court argumists. So, Jordan's which case did you find the most exciting? I choose the arguments over Trump's financial records. Well, certainly, you know you can't go wrong with that. These are historic cases, it's ones. These are arguments certainly that will

be remembered for a long time. Going back to looking at cases for example, in the Nixon tapes case, this is certainly a case in line with that precedent, and so certainly just the fact of the historic issue before the court is exciting and its own right. Um, I'll go ahead and pick on a different case that maybe is a little lesser known and perhaps lesser watched out

of the rest of the ones in this session. And that's the one I referenced a little earlier called McGirt against Oklahoma, And that's the case that we've talked about about whether essentially the eastern half of Oklahoma is technically sitting on Indian reservation land. And that's the case that has a lot of implications for criminal jurisdiction and civil and tax and regulatory implications. And there were four lawyers arguing in that case, as I mentioned, Solicitor General Monston

Honey being one of those lawyers. And that was a really exciting argument in one with very interesting implications that I'll be very interested to see how the justices sort that case out. And what would you say was the dullest argument, the dullest argument? Oh wow, you know you can't. You can't say that about your children, right, you know you have to uh, the dullest argument, Well, probably, you know, aside from the the flush in a case involving robocalls,

that probably was not the most exciting issue. Maybe, you know, trying to get more attention to the issue. Maybe that's why someone did the flush. I don't know, maybe that's the new theory that'll be out there, but that was probably on the lesser watch spectrum of all these cases. It did seem as though there was a mix of kind of high profile cases and lower profiles cases that the Court shows. It wasn't immediately clear in terms of every case that was put on for this session why

the Supreme Court put it on for this session. Obviously, of something like the Trump's subpoena cases and the so called faithless electors cases about the Electoral College, obviously there's election implications in both of those cases and they're very important, So it's clear why the Court picked something like that. But for example, you know, the trademark case that we

talked about, they kicked off the session. In terms of the significance of that case relative to some others that were pushed off the next term, it's not immediately clear, but it did give a nice kind of mix of different types of issues and cases to have throughout the session.

You know, I would pick the trademark case as the dullest, and I think they picked it first because they wanted something that was going to be you know, lawyers who knew what they were doing, and a topic that was pretty dull it is, I think so, but it's also one that was I think somewhat accessible. You know, whether you can trade more this generic brand and so, you know,

certainly not. You know, they're they're complicated aspects of every Supreme Court case, but for people who are turning into the first one, it had some fun hypotheticals in that

case too, and so it was relatively accessible for a case. Also, there were only two lawyers arguing in that case, and in the first two days of the session, there was only one case on for each session, So it did seem like the justices wanted to focus on just maybe one case each day to kind of roll out this new platform, to see how it went, and not start off with these high level four lawyer arguments like we

saw in the second week of the session. So at the beginning of these arguments, Chief Justice John Roberts was keeping things moving, he was cutting some people off so that you can move to the next justice. But the argument seemed to get longer and longer as the weeks went on. Certainly, some of the arguments did go over the one hour allotted time, and you know, you want under why does an argument just have to be one hour.

Certainly we're all seeing in the virtual meetings that we're having and working from home that just the fact of using this technology can make things go a little longer than they otherwise would. And so, just as an other aspects of life, I think the Supreme Court is kind of just in that mess with the rest of us

of technology up ending things. And so maybe an argument did go for about a half hour longer, But you know, these are important cases, and so I think that if the justices need a little more time, another half hour to sort out something like the presidential power in the Trump's Satoina cases, you know, I think we can afford to give them that time, even if the Chief Justice maybe wished that some of the arguments moved along a

little more briskly. Good point Jordan's you listen to these arguments all the time in person a lot of the time. Did you get a sense of the justice is personalities from these ten arguments? You know? I think you still did? You have? You know, Justice Brier, who's always a lively questionnaire and he spins out all these long hypotheticals that

take up pages of the Supreme Courts transcripts. He didn't necessarily speak for as long as he usually does, but just the fact that he's jumping into the argument and saying good morning, which not every justice, then you could tell he was kind of just happy to be there, whether or not he was the alleged flusher in this robot call case. He made a robocall joke about how he had an un muting issue or some kind of

phone issue during that argument. Now he had to go, and so he wasn't immediately available when the Chief called on him, and he made a joke about, oh, I wasn't getting a robocall or something of that nature. So you had the justices personalities shining through. I think you have someone who Justice bry Or, you have him shining through anyway, And just as you mentioned the Chief kind of trying to keep things moving and orderly to some extent,

that's his personality shining through. And so I think the answer is yes, maybe not to the extent that some of the justices might have wanted, But if you were to put the question to them, they would say, you know, it's just about kind of figuring out the issue, not so much about their their personalities. But I do think even someone who has never turned into a Supreme Court argument before. Did get a sense of really the serious

business that the Court undertakes on a daily basis. And speaking of serious business, it seemed to me that Justice Alito was consistently the most no nonsense, no frills question or among the justices. Yeah, I think that there. I think that that's right. Uh. You know, I mentioned Justice Brier and some of the other justices they would start by saying good morning. Certainly that's not a requirement. I

don't recall Justice Alito ever starting that way. Not that he was the only one, but he was ready to get down to business. He's kind of a no nonsense guy. And so going back to your previous question, I think his personality shown through in in that way as well. So the more I think about it, I really do think that the country did get a look or a

liston anyway at the justices. I think you also got a sense of what an attorney who has argued so many times before the court, how their arguments go so much smoother, and there's a sort of a sense of respect from the justice, for example a Paul Clement. Oh, for sure, you could definitely tell all the work that goes into these arguments and the respects that all of these lawyers have, and listeners really did get to tune into some of these great advocates really from the start.

As we mentioned, uh, Lisa Blad is a very well respected in long time Supreme Court advocate. And you had an interesting mix too of kind of newer advocates and more veteran ones. And on the whole, everyone did a pretty good job, you know, going into it, all these lawyers know that maybe there's gonna be a little more

attention on these cases than there otherwise would be. Not that there isn't reason enough to be well prepared for an argument in itself, but you could tell that everyone was on the whole anyway, ready to rise to the occasion. And it also showed the inexperience of some of the

attorneys arguing before the court. I believe it was the attorney who was arguing in the faithless electors case who some of the justices seem to be really frustrated with, especially Chief Justice John Roberts, because the Chief Justice asked for limiting principles, and you know, he said anyone could vote,

a giraffe could vote. You mean, you know, June. It's interesting you bring up this notion of a limiting principle, because I think someone who even just casually was listening to all the arguments in this two weeks session, that was kind of the theme, and it's almost the theme of the Court's work in general. They're looking to draw lines. Obviously, any party that brings the case to the Supreme Court

they want to win pretty much anyway they can. But the Supreme Court is more interested not necessarily just in who wins or loses a particular case, but the legal principle that's going to come out of it. And so whether it was in that faithless Selector's case, whether it's talking about the line or the limiting principle of congressional subpoena power into the president in the Trump subpoena case, this was a topic that was clearly on the Justice's mind during the session, and it was kind of a

through line through all of these arguments. And not that that's unique to to these cases, but that shows really what the work of the Court is for the most part, in trying to make these clear legal rules to apply in all cases going forward. So in your Cases and Controversies podcast, didn't you speak to the lawyer who was

involved in that fact as elector's case. Yes, we spoke to Jason Harrow about the Frodo Baggen's example and how it was his first time arguing, and that was a really interesting insight that we got from him to being able to talk to someone who had just come off of one of these arguments. So that was a treat How did he feel about how the argument went. We didn't get too much into the substance of the argument. We kind of talked more generally about the issue and

what it was like arguing at the court. You know, I think it seemed unlikely coming out of that argument that the justices were going to grant these electors the ability need to vote for whoever they wanted, or to put it differently, it seemed likely that the justices were going to prevent states from taking steps to make sure that electors vote in the way that their states actually wanted. So it might have kind of just been a tough

argument to make in some ways. You know, as the lawyers, sometimes you have the the case that's in front of you, right, and so you know, I think searching for this limiting principle was a through line that we saw throughout the week, and we saw a lot of frustrations again, you know, perhaps the most frustrated that the justices have been, or

at least some of them. Anyway, we're in these trumps topoena cases when it was the lawyer for the House of Representatives who it seems was perhaps unable to come up with a clear line at least to a majority of the court satisfaction to the line for what congressional power could be in terms of investigating the president with these topoena's. Thanks, Jordan's that's Bloomberg Law editor Jordan Rubin, and that's it to this edition of Bloomberg A. I'm June Russell and this is Woolburg