Google Ad-Tech Setback Raises Pressure To Settle, Avoid Trial

The complex facts underlying billions of dollars in antitrust claims that publishers can now pursue against Alphabet Inc.’s Google make a jury trial risky and suggest that a settlement could be on the horizon.

 

Google’s potential damages exposure is now substantial after Judge P. Kevin Castel of the US District Court for the Southern District of New York said in a September 30 opinion that there was sufficient evidence to support claims by USA Today Co., formerly Gannett, the Daily Mail and a class of about 5,000 other publishers. They allege that Google overcharged them through its advertising technology platform, AdX.

 

Castel referred in his opinion to more than $1.7 billion in damages for the publishers’ class, before trebling. The Daily Mail and USA Today allegedly incurred damages of roughly $600 million and more than $900 million, respectively.

 

“They are facing a big bill now and in front of a jury,” said Harry First, a professor emeritus at New York University School of Law who specialises in antitrust. “At some point, Google might have to do with one less data centre.”

 

The company’s track record with juries, including a major loss to Fortnite maker Epic Games in 2023, may influence Google’s approach, he added.

 

“Going before a jury is always rolling the dice a little bit,” First said. “My instinct is you want to look for a number to settle.”

 

Google, he added, also is not in the strongest litigating position amid an economic downturn and with a jury pool that knows the technology giant spends billions of dollars on data centres.

 

Companies such as Google “are not exactly struggling for cash”, First said.

 

He also noted that the publishers’ lawyers are “very sophisticated” firms that have evaluated the case closely, reducing the likelihood of an easy resolution.

 

“We are pleased that the Court has denied Google’s motion for summary judgment on the AdX publisher class’s claims,” said Philip Korologos, a partner at Boies Schiller Flexner LLP, which, along with Korein Tillery LLC and Berger Montague PC, serves as co-lead counsel for the AdX class. “We look forward to presenting the remaining issues at trial, where the class will seek to recover overcharges.”

 

Settlement Considerations

 

Statistically, most antitrust cases do settle, particularly after a summary judgment ruling of this nature that represents a “serious blow” to Google, said Christine Bartholomew, a law professor at the University at Buffalo who focuses on antitrust issues.

 

She said the plaintiffs might also prefer to settle because of the complex nature of the case. The class of publishers alleges that Google coerced them into using AdX if they used Google’s publisher ad server, DoubleClick for Publishers.

 

“The more confusing and complicated a case is, the more that helps the defendants,” Bartholomew said. “Plaintiffs like clean, straightforward stories.”

 

Losing at trial would also create a precedent for other pending cases against Google, said Alicia Batts, a former attorney adviser at the Federal Trade Commission and founding partner of Batts Legal LLP, a boutique antitrust firm in Washington, DC.

 

She predicts Google will pursue parallel strategies, with a team of lawyers preparing for trial while also seeking a settlement. “They will be prepared on all fronts,” Batts said.

 

The ruling marks a significant milestone in the publishers’ litigation, which comprises follow-on actions to a 2023 Justice Department lawsuit accusing Google of unlawfully monopolising the digital advertising market.

 

Last year, a federal judge in Virginia ruled that Google violated antitrust law in markets for advertising exchanges.

 

However, the judge in September denied the Justice Department’s request to force a breakup of Google’s ad-tech business, keeping a major part of its ecosystem intact.

 

Trial Still Possible

 

The possibility of a trial is not off the table, said Wyatt Fore, a partner at Shinder Cantor Lerner LLP who specialises in antitrust law. One person on a jury who acts as a wild card could sway the decision in either direction, he said.

 

“If you’re the defendant, you might think, ‘We’ve got decent arguments, and all we need is one juror to lock up the jury,’” Fore said. In the best-case scenario, Google wins entirely and does not have to pay, he added.

 

In the worst case, Google pays the damages but has the financial means to absorb them, he said. “It seems like a lot to normal people, but, you know, to Google, this isn’t exactly going to drive it out of business,” Fore said. Ultimately, it amounts to a business decision for Google, rather than a legal one, Fore added.

 

“Are they willing to pay the money? Are they willing to deal with the bad press?” Fore said. If the answer is yes, “you can roll the dice and see what happens.”