Google, Texas antitrust case over ad technology gets first day in Plano court

04 Feb 2021 8:54 pm by Mike Swift, Dave Perera

Google

Lawyers for Google, Texas and nine other states had their first in-person skirmish in a US federal courthouse today over antitrust litigation filed against the Internet giant’s display advertising-technology business, with early signs suggesting a fast-moving case that will stay in the Texas court.

The preliminary hearing before US District Judge Sean D. Jordan in Plano focused on how the states and Google will safeguard evidence and communicate clearly with the court over the long term, particularly in the wake of a leak of redacted elements of the complaint to selected members of the news media in recent weeks.

Jordan said he will schedule oral argument late this month or in early March on Google’s motion to transfer the case to federal court in the San Francisco Bay Area, giving no hint whether he’ll grant Google’s motion to move the case to California. Lawyers for the states said after the hearing that they hope the case can go to trial as soon as early 2022.

Jordan spent most of today’s hearing focused on how he wants the two sides to run the case in his courtroom in future months, and perhaps years.

“I do want to keep this case moving,” Jordan said at one point, saying he won't allow either side to have a slow burning “fuse” to draw out the litigation process.

In a complaint filed on Dec. 16, the states allege Google violated Section 2 of the Sherman Act by illegally monopolizing the highly complex array of services that, in the blink of an eye, use consumers’ personal data to allow advertisers to target their ads to people most likely to be interested in them.

Google lawyer R. Paul Yetter and W. Mark Lanier, lead counsel for Texas Attorney General Ken Paxton and the other nine states, battled over which side is the greater risk for revealing or leaking sealed information in the case — specifically over who was responsible for the leak of redacted elements of the complaint to the Wall Street Journal and New York Times.

Texas shared a draft of its complaint with 35 other attorneys general offices before filing the final version, Lanier told reporters after the hearing, avowing then and beforehand in court that the leak didn’t come from Texas, its state partners or third-party experts. “It’s not from us. I can represent that to the court,” he told Jordan.

Lanier, a prominent Houston trial attorney in private practice who is lead counsel for Texas, said in court and during the press conference that the states are concerned Google will use Gmail and other services to “data-mine” their private communications.

It’s “against the law for them to snoop in the email for litigation purposes, but it’s certainly not [illegal] to data mine. And, would they do that? Frankly, I’d be shocked if they don’t do that,” he told reporters. For proof, he urged reporters to use Google to search for “Tesla cars.”

“You Google — right now — you Google ‘Tesla cars,’ and I’ll bet you one of your webpages before 48 hours is up you’re going to have an advertisement from Tesla to buy Elon Musk’s car.”

Google attorney Yetter scoffed in court at Lanier’s suggestion that the Silicon Valley giant would use its commercial services to monitor states’ private communications. “This issue about data-mining, I have no idea where that’s coming from. It has nothing to do with this case. I don’t know why that’s being suggested,” he said.

Yetter also pressed the matter of the leaked draft complaint. “We’ve had a disclosure here and it obviously came from that side. There’s nothing we can do about it,” Yetter told Jordan. “We asked counsel [for the states who leaked it] and they simply said 'we’re not telling you.' They do know.  . . . We can’t let this happen again, so we’re trying to get to the bottom of it.”

Yetter and Lanier said the protective order they are negotiating is modeled on the agreement between the Department of Justice and the states, including Texas, that have sued Google in federal court in Washington DC over exclusivity agreements in its search business. They said the order in the ad-tech case would have additional elements, including a disclosure of which consultant has access to what confidential data, which the sides said would have a “prophylactic” effect to prevent future leaks.

“I do think a protective order needs to be robust — and quite robust — here,” Jordan said. “I was aware of that unfortunate leak, so I think that underscores the point on how robust the protective order needs to be.”

Joining Texas in the suit are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah — all states headed by Republican attorneys general. Lanier told Jordan the states will strive to unify communications from the individual states and the court. Jordan, who was nominated to the federal bench by President Donald Trump, was confirmed by the Senate in August 2019.

Lanier told reporters he expects additional states to join the Texas suit but said he's unsure about whether the newly constituted Biden administration Justice Department might do so. “I’m not sure they know what they’re going to do,” he said.

He refused to say how Texas chose to approach the 35 out of the 56 attorneys general that could have signed onto the complaint, including those representing territories such as Puerto Rico and Guam.

Google’s bid to move the case nearer to its headquarters in Mountain View, California, is a long-shot in the view of some experts. At a court hearing this morning from San Jose, California, on private class-action antitrust litigation over Google’s ad business, US District Judge Beth Labson Freeman said she doubts Jordan will transfer the case.

“I’m not going to hold my breath on the Texas action coming here,” she said, after noting earlier: “When was the last time the ED of Texas gave up a case voluntarily?” — meaning without an order from an appeals court. “I know those judges well; we all know them by reputation.”

The case should be brought to trial by this time next year, Lanier asserted, accusing Google of wanting “to drag this out as long as possible.” Google attorneys have responded to approaches of a trial date by saying “it’s premature to even discuss a trial setting,” he said.

“I’ve got the burden of proof, that means I'm the one who’s got to do the work to prove to a jury ... They're the ones who are supposed to say it takes six months,” Lanier said.

“This is a Defcon-3, at least, matter and needs to be treated as such,” he added.

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