Judge Leonie Brinkema has pushed back against Google’s arguments that a breakup of its digital advertising assets would inherently harm its customers.
Karen Dunn, counsel to Google at Paul Weiss Rifkind Wharton & Garrison, told the US District Court for the Eastern District of Virginia on Friday that there was no legal basis for forcing Google to divest any assets and that doing so would harm advertisers that are reliant on Google to reach consumers.
Judge Brinkema questioned why a divestiture would be detrimental to Google’s customers. The judge said publishers use Google’s DoubleClick for Publishers tool because it provides them access to a plethora of marketers on Google’s Ad Exchange (AdX).
Dunn specified that she was referencing harm to advertisers, not publishers, but the exchange represented Judge Brinkema’s most pointed remarks about the scope of remedies during Friday’s scheduling hearing.
Judge Brinkema ruled last month that Google had illegally maintained digital ad servers and ad exchanges on the open web and that the company had illegally tied DoubleClick for Publishers to AdX.
Both sides made their opening pitch to the court on Friday.
DOJ attorney Julia Tarver Wood insisted that forcing Google to divest certain assets was necessary to restore competition and deter companies from illegally maintaining monopolies.
Divestitures are “clean, sure and effective”, Wood said, adding that it is “frankly, too dangerous” to only punish Google with behavioural remedies, or rules that are designed to limit future anticompetitive conduct.
Wood acknowledged divestitures would include technical challenges but said that the DOJ is prepared to detail three phases in which the process can go smoothly, including making certain aspects of Google’s advertising business open source.
Judge Brinkema asked how important it was for her court to consider the remedies the US District Court for the District of Columbia is considering regarding the Google Search case.
Wood said that they are two completely different cases and that there is no direct relationship between the two outcomes.
Dunn told the court that forcing Google to divest assets would “eviscerate and eradicate” security for Google’s platforms.
Judge Brinkema asked what Google meant by “security,” to which Dunn replied that selling businesses risked exposing customers and the general public to more spam, fraud, and attacks from hostile actors.
Dunn said none of the DOJ’s witnesses at trial were interested in purchasing Google’s assets or launching their own. The only companies with the resources to buy Google’s assets are very large technology companies, she said.
Dunn insisted that forced divestitures have always been tied to a court finding that purchasing those assets harmed competition, but Judge Brinkema found that Google’s acquisitions of DoubleClick and AdMeld were not anticompetitive.
Dunn said that the US Court of Appeals for the District of Columbia Circuit ultimately rejected the possibility of requiring Microsoft to divest assets after concluding there was no direct relationship between the products it would sell and its anticompetitive conduct.
“We don’t think a divestiture is legally viable at all,” Dunn said.
Dunn said Google was prepared to commit to several behavioural remedies, including allowing rival ad servers access to its “real-time bidding” information.
Google is also willing to allow publishers to set higher prices on AdX than on other platforms and promise to not re-implement policies that allowed it to take a first or last look at the final prices of a sale before its completion, Dunn said.
Judge Brinkema questioned how long Google expected these remedies to be implemented and whether it would resist requests to appoint a monitor to oversee the process, given the large amount of mistrust created by Google, among other things, attempting to hide emails from discovery.
Dunn said a one to two-year timeline would be appropriate for behavioural remedies and that it would agree to a court-appointed monitor.
Wood said the Supreme Court has repeatedly held that illegal monopolists can be forced to divest assets they acquired legally. She said that prohibiting future wrongdoing would make US antitrust law futile.
Google is only pointing to security concerns to scare the court, Wood said, and the company is not better at protecting users and customers than its rivals.
Judge Brinkema expressed some concerns that the proposed schedule for the remedies aspect of the litigation was too slow, but she ultimately accepted their joint proposal to begin the trial on 22 September.
She ordered discovery to start immediately and close by 30 June.
Judge Brinkema also encouraged the parties to try to settle, warning that the rise of artificial intelligence could upend these markets soon.
Counsel to Google
Paul Weiss Rifkind Wharton & Garrison
Karen Dunn, Jeannie Rhee, William Isaacson, Amy Mauser, Martha Goodman, Bryon Becker and Erica Spevack in Washington, DC, and Erin Morgan in New York
Freshfields Bruckhaus Deringer
Eric Mahr, Andrew Ewalt and Tyler Garrett in Washington, DC, and Justina Sessions in Redwood City, California
Axinn Veltrop & Harkrider
Daniel Bitton in San Francisco and Bradley Justus in Washington, DC
Law Offices of Craig C Reilly
Craig Reilly in Alexandria, Virginia
Counsel to the Department of Justice
Ryan Danks, Timothy Longman, Julia Tarver Wood, Katelyn Barry, Craig Briskin, Katherine Clemons, Nicholas Cheolas, David Geiger, Jacklin Chou Lem, Arshia Najafi, Brent Nakamura, G Charles Nierlich, Chase Pritchett, Andrew Schupanitz, David Teslicko and Michael Wolin in Washington, DC
US Attorney’s Office for the Eastern District of Virginia
Jessica Aber and Gerard Mene in Alexandria
