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Google: 'Settlements 'R' Us?' Is Google Choosing Regulation?

Has Google shifted its legal strategy from its scorched earth legal tactics to more brand-friendly 'Settlements 'R' Us' political tactics?

  • And is Google politically ramping up its lobbying against "search regulation" to try and minimize the restrictions it has to abide by in order to settle the phalanx of serious law enforcement investigations and lawsuits it is facing on antitrust, privacy and intellectual property?

I. There is emerging evidence that Google may be in settlement court-regulation-submission mode.

  1. EU Antitrust: When asked by the Sunday Telegraph if "Google Inc. wants to avoid a lengthy legal battle with the European Union regulators over its market dominance," Google acting CEO Eric Schmidt said: "We certainly want to avoid that."
  2. Google-DOJ Hiring Collusion Settlement: Google and five other companies settled with the DOJ for colluding to limit job opportunities for their employees, and agreed to court-supervised regulation of its hiring practices for five years.
  3. Google-ITA Software: The WSJ reported that Google is trying to negotiate conditions to get DOJ approval of its acquisition of ITA Software.
  4. Google Book Settlement: The DOJ opposes the settlement as a violation of three bodies of law: antitrust, copyright, and class action. One explanation for the interminable year-plus wait from the court reviewing the settlement is that Google is trying to negotiate a settlement.
  5. Google-WiSpy State Probe Settlement: Last week Google cut a deal with the ~40 state AG's investigating Google's WiSpy collection of tens of millions of Americans private information without permission by admitting guilt but not having to comply with the states' subpoena.
  6. FTC-Google WiSpy Settlement: The FTC dropped its WiSpy investigation after Google blogged that they would not do it again and would start privacy-sensitivity training for new Googlers.
  7. Google-DOJ Sherman Settlement? In addition to the EU antitrust investigation, Google obviously wants to prevent the DOJ from launching its own broad monopolization case against Google. The apparent logic here is cooperate on the narrow items to avoid a Sherman Antirust case from the DOJ. If this is true, the DOJ will realize their leverage -- in Google-ITA or the Book Settlement to block outright or extract very tough conditions/behavior precedents -- went up exponentially.

II.  Why may Google be in 'Settlements 'R' Us' mode?

  1. Google learned that discovery in the Viacom Undisputed-Facts instance was deadly, because Google has so much information that they never want law enforcement or the public to see. They don't want a repeat of that nightmare as they have too much they need to hide.
  2. Google understands that others subscribe to the "cockroach theory" meaning that if law enforcement can see many legal-Google-cockroaches out in the open on the public's counter-tops, they know there are ten times more hiding behind the walls out of the sunlight.
  3. Google is terrified that law enforcement will connect-the-dots of all these cases to put together a damning broad pattern of monopolistic behavior in a Sherman 1 & 2 monopolization case against Google.
  4. Google hopes to take advantage of its extreme closeness to the Administration and also the Administration's economic focus on promoting innovation, to secure special treatment or a more lenient law enforcement standard for innovation-darling Google.

 

III.  What are the dangers of Google submitting to multiple consent decrees?

 

  1. It will be hard for Google to continue arguing against the need for search neutrality and against search regulation if it chooses to submit to law enforcement sanctions and restrictions (which Google politically characterizes as 'search regulation for obvious reasons) rather than drop the actions that are prompting the legal ire or defend their rights in court.
  2. Google will have to effectively admit guilt in multiple forums, which will bolster private antitrust, privacy and IP cases against Google and encourage many more to file.
  3. If it becomes known Google is in 'Settlements 'R' Us' mode, the normal balance of negotiations could shift considerably meaning the cost of negotiating settlements could skyrocket and more complainants could be encouraged to come out of the woodwork.
  4. The biggest risk to Google of antitrust settlements is admitting that they are a monopoly that has abused its monopoly power. That is the legal precedent Google is loathe to agree to because that means that antitrust officials can extract conditions that effectively ban Google from doing the monopolistic behavior in question in the future, and because that makes it easier for antitrust enforcers to ask for a permanent decree that does not sunset.

In sum, if Google is indeed changing its tactics as some evidence suggests, it changes the whole game for everyone.

 

  • Given Google's many 'Settlements 'R' Us' signals, everyone negotiating with Google could feel more confident that Google is bluffing with a weak legal hand rather than holding a hand full of aces that they have always claimed.

 

 

 

     

       

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