Top Takeaways from Google’s Appeals Court Loss to MS State AG Jim Hood

For the last year, Google was above state law in the U.S.; fortunately, it no longer is.

The U.S. Fifth Circuit Court of Appeals just ordered dismissal of the Machiavellian preliminary injunction Google won in Federal Court over a year ago that squashed a 2014 Mississippi State Attorney General subpoena and state law enforcement investigation of Google’s alleged facilitation of “dangerous and illegal activities through its online platforms.”

Forty State AGs backed MS AG Jim Hood in Court because the Federal injunction that Google won effectively neutered all State AGs from investigating or prosecuting Google for most any alleged Google violation of most any State consumer protection law.

Simply, the Appeals Court ruled that Google faced no “irreparable injury” in having to comply with the MS State AG’s broad subpoena, and that “[T]he normal course of state criminal prosecutions cannot be disrupted or blocked on the basis of charges which in the last analysis amount to nothing more than speculation about the future.”

In a nutshell, this court decision affects the Google big picture in three strategically important ways.

First, Google is again subject to state rule of law after a year of ill-gotten de facto immunity from state law enforcement investigation or prosecution.

Second, it exposes that Google has a lot to hide and cover up, because it is again subject to legal discovery, the law enforcement process which has provedperilous for Google in the past.

Third, this Google piracy-related case brings attention to a potential ‘perfect storm’ of Google-piracy vulnerabilities, in that it resurrects a fourth major potential Google-piracy vulnerability, on top of the May 2016 Oracle v. Google copyright-infringement trial deciding the amount Google owes Oracle in copyright-infringement damages; the April 2016 pending decision of whether the Supreme Court will hear the Authors Guild v. Google petition that Google Books is not fair use; and the 2016 FCC-Google AllVid proposal that would force open-sourcing of all American video programming inviting mass piracy.    

How does this strategic court decision affect the Google big picture?

First, Google returns to effectively being subject to U.S. rule of law again in the U.S.

For the last year, Google’s Machiavellian legal machinations amazingly gained Google de facto sweeping, practical immunity from U.S. State law enforcement investigation and prosecution.

Never before has one company finagled one decision that effectively corralled and neutered all U.S. state law enforcement from even investigating allegations of serious crimes like aiding and abetting illegal drug sales, human trafficking, credit card and ID document fraud, mass-copyright infringement, etc. and that potentially threatened the public safety of tens of millions of Americans daily.  

The combination of Google’s Machiavellian neutering of State law enforcement in Federal Court, coupled with Google’s apparent Machiavellian politicaldomestication of the DOJ Antitrust Division and the FTC since the 2012 election, has sadly meant Google has been able to operate largely above the law in the U.S. for the last year.

Now with at least 41 State Attorneys General apparently interested in, and freed to, co-enforce the rule of law under the U.S. Constitution, the DOJ and the FTC again have some healthy inter-governmental accountability and public rivalry to subject Google to the rule of law like every other corporation is in America.   

Second, this Appeals Court decision is big reminder of how much Google has to hide, i.e. Google’s established Federal criminal record and the evidence-rich-allegations of ongoing Google criminal behaviors. (See some of the evidence here, here, here, here, & here.)  

If Google did not have an abundance of incriminating evidence to hide, why would Google -- the company that famously expects that everyone else’s information of most every imaginable type must be completely open to Google’s search discovery, collection, analysis, and monetization -- fight in court to effectively deny state law enforcement in all fifty state jurisdictions from even doing the most basic functions of their sovereign duty, i.e. legal discovery -- investigating allegations of “dangerous and unlawful activity” that potentially endangers tens of millions of Americans every day.

Very simply, Google’s de facto stance here is that the world must be totally open to Google’s pervasively invasive surveillance and discovery, but Google alone is entitled to be totally closed to any scrutiny, even legitimate state government subpoenas investigating evidence-rich allegations of Google aiding and abetting criminal behavior endangering the public.

The obvious and epic incongruity and hypocrisy of this Google double-standard, combined with Google’s characteristic neediness for obsequious media coverage, reeks of a Google guilty conscience here.

Innocent companies have no need to, nothing to gain from and everything to lose from, pursuing a Machiavellian legal strategy designed to publicly emasculate the overall state law enforcement process.           

Tellingly, Alphabet-Google Chairman Eric Schmidt famously implied that any Google users that expected their privacy to be protected by Google must be guilty of something, in preaching to CNBC’s Maria Bartiromo: “If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."

At this point some readers are thinking that Google is innocent until proven guilty. Of course it is.

But of course as the Appeals Court just ruled, Google has no legal right to prevent sovereign state law enforcement from even investigating a criminal case against Google, because that would prevent law enforcement from any due process opportunity to prove in court that Google is guilty of crimes that harm public safety.

It is important to note here that Google has an established Federal criminal record, in having admitted to knowingly profiting from violations of Federal drug laws for several years warranting a $500m criminal forfeiture disgorgement penalty of Google’s ill-gotten, illegal drug import profits.

Tellingly, MS AG Jim Hood seeks to investigate allegations and evidence that Google continues to violate criminal and civil laws in similar ways that Google criminally behaved in the past.

Third, this court decision helps spotlight a potential upcoming Google-piracy liability ‘Perfect Storm.’

Few appreciate that Google faces a ‘perfect storm’ of piracy liability in 2016 from four different fronts, in four different forums, from four different groups of actual and potential Google piracy victims, alleging four different types of systematic piracy by Google – MS AG Hood at the State level, Oracle v. Google in Federal Court, Authors Guild v. Google before the Supreme Court, and the Future of TV Coalition versus Google in the FCC AllVid proceeding.

Consider this.

What is the likelihood that a company (Google) is totally innocent of the multiple piracy or theft allegations against it, when four current different groups simultaneously are willing to take on the huge business risk and extraordinary legal cost/risk of challenging the world’s most powerful company and the world’s monopoly search and search advertising provider on which their businesses depend, for a period of years, when they have little to gain and a huge amount to lose, if they are either wrong on the law or are advancing inaccurate or frivolous allegations, and when these four current groups can point to roughly eighteen other groups who have charged Google with similar systematic theft of their intellectual property in the past, but either have already settled or could not afford to fight Google in court, e.g. Yelp, Viacom, Apple, Microsoft, business directories, wire services, newspapers, broadcasters, movie studios, publishers, visual artists, software providers, photographers, artists, graphic designers, illustrators, and filmmakers.


This strategically important court decision begs a big picture view of Google and its many piracies and apparently rapidly growing piracy liabilities.

Please consider this one last question.

With all this smoke, with all these fire alarms, with all these firefighters, fire trucks, and fire hydrants engaged in firefighting activities all over the place, with all the people willing protect their property from the fire and expose the burns they have suffered to the public, are we to believe no fire exists?


Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.