US government agencies only purchased digital advertising through intermediaries so cannot seek damages, Google has said in seeking to throw out the Department of Justice’s monopolisation lawsuit.
In a motion for summary judgment on Friday, Google said the Antitrust Division’s damages claim should be axed because the government cannot get around the Supreme Court’s “bright-line” rule that only direct purchasers can collect damages in antitrust cases, despite the DOJ’s claim that an exception applies.
Google said invoices produced in discovery made clear that the eight federal agency advertisers (FAAs) that the Antitrust Division seeks damages for – including the US Army, US Navy and US Postal Service – only purchased Google ads through middlemen.
While the government argued that an exception to the Supreme Court’s Illinois Brick rule applies because the FAAs directed their ad buying agencies’ purchases, Google said there is no proof that the FAAs exert this power.
“There is no evidence showing that the FAAs control the ad agencies’ purchasing decisions,” Google said. “The contracts between the FAAs and ad agencies give the ad agency discretion in making purchases”.
Google noted that the judge presiding over the case last year also flagged that the use of middlemen might be a “problem” for the government’s case.
In January 2023, the DOJ and 17 states sued Google for allegedly cornering the market for key digital advertising technologies. The DOJ claims Google used acquisitions and exclusionary conduct to restrict competition in markets for ad tools that can buy and sell “open web display advertising”.
The plaintiffs want the court to force Google to unwind its $3.1 billion acquisition of DoubleClick’s AdMeld, which the Federal Trade Commission allowed in 2007. The DOJ also seeks almost $1 million in damages on behalf of eight agencies.
On Friday, Google said the government’s damages claim must be thrown out because it cannot defeat the Supreme Court’s rule set out in Illinois Brick or accurately calculate damages. The company argued that the plaintiffs’ hired damages expert – Brattle Group economist Adoria Lim – failed to reliably calculate the amount it allegedly overcharged.
Lim’s opinions contain many unsupported arguments that are based on a hypothetical 10% overcharge that the government instructed her to assume, Google said.
Separately, Lim failed to find evidence that agencies governing Medicare and highways actually paid for their ad invoices, Google said.
Exclusions for everyone
Google also argued that the rest of the DOJ and states’ claims are “doomed” by their made-for-litigation antitrust markets that the industry does not recognise.
Google said this “open web display advertising” market definition excludes its biggest rivals Meta and Amazon. When analysed by the government’s hired economic expert, the market also yields “absurd results”, Google said in seeking to disqualify Harvard University professor Robin Lee from testifying before the jury.
Lee previously testified on behalf of the FTC in its challenge to Microsoft/Activision Blizzard; the judge in that case repeatedly challenged his calculations.
Google said Lee’s methods include certain ads but not others when they are interchangeable – giving an example that an ad on the Washington Post website is included in the market, but the same ad on its app would be boxed out.
In separate filings on Friday, the Antitrust Division and state enforcers also argued that two of Google’s hired experts must be excluded for offering unreliable opinions.
The government said Google’s cybersecurity expert Anthony Ferrante, FTI Consulting’s global head of cybersecurity, had no methodology and relied on only his personal experience. The Antitrust Division added that Ferrante’s opinions are irrelevant to the issues before the jury.
He also did not explain why this “I know it when I see it” approach was sufficient to support his opinions about when cybersecurity risks impact digital advertising choices, the DOJ said.
The DOJ also sought to exclude a survey challenging its market definition from Stanford University professor Itamar Simonson, saying many of the questions were skewed or unclear and the sample was not representative.
Counsel to Google
Law Office of Craig Reilly
Craig Reilly in Alexandria, Virginia
Paul Weiss Rifkind Wharton & Garrison
Karen Dunn, Jeannie Rhee, William Isaacson, Joseph Bial, Amy Mauser, Martha Goodman, Bryon Becker and Erica Spevack in Washington, DC, Meredith Dearborn in San Francisco and Erin Morgan in New York
Freshfields Bruckhaus Deringer
Eric Mahr, Andrew Ewalt, Julie Elmer, Lauren Kaplin, Scott Eisman, Jeanette Bayoumi, Claire Leonard, Sara Salem and Tyler Garrett in Washington, DC
Axinn Veltrop & Harkrider
Daniel Bitton in San Francisco and Bradley Justus in Washington, DC
Counsel to the Department of Justice
Jonathan Kanter, Doha Mekki, Hetal Doshi, Ryan Danks, Daniel Guarnera, Timothy Longman, Julia Tarver Wood, Katelyn Barry, Craig Briskin, Katherine Clemons Aaron Teitelbaum, 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
Counsel to the Commonwealth of Virginia
Andrew Ferguson, Steven Popps, Tyler Henry and Kevin Gallagher in Richmond
Counsel to the State of California
Paula Blizzard, Brian Wong and Henry Cornillie in San Francisco
Counsel to the State of Colorado
Bryn Williams, Jan Zavislan and Steve Kaufmann in Denver
Counsel to the State of Connecticut
Nicole Demers in Hartford
Counsel to the State of New Jersey
Yale Leber in Trenton
Counsel to the State of New York
Elinor Hoffman and Morgan Feder in New York
Counsel to the State of Rhode Island
Lloyd Ocean in Providence
Counsel to the State of Tennessee
J David McDowell and Scott Bowers in Nashville
