A Little Context: Texas Leads 50 State Coalition Investigating Google

Google is finally getting some pushback from the nation state.  Texas Attorney General Ken Paxton is leading a broad coalition of state attorneys general into Google’s business practices starting with violations of state antitrust laws.

According to the Washington Post:

The states’ investigation is led by Texas’ Paxton and seven other attorneys general, four Democrats and four Republicans in total. Every state except Alabama and California, the home of Silicon Valley, so far has signed onto the bipartisan effort, as have Puerto Rico and the District of Columbia. A spokeswoman for California’s attorney general did not immediately respond to a request for comment.  [Gee, I wonder why?]

…Another group of 11 state attorneys general — led by New York’s Letitia James — has begun their own probe against Facebook, exploring whether it violates competition laws and mishandles consumers’ personal information.

Google also disclosed in an 8-K filing with the SEC that they’d received a “civil investigative demand” from the Department of Justice:

On August 30, 2019, Alphabet received a civil investigative demand from the DOJ requesting information and documents relating to our prior antitrust investigations in the United States and elsewhere. We expect to receive in the future similar investigative demands from state attorneys general. We continue to cooperate with the DOJ, federal and state regulators in the United States, and other regulators around the world.

Sending a CID is how these things usually start.  A CID is a discovery request that is similar to a demand for production of documents, oral testimony or answers to interrogatories.  How did this whole state AG thing evolve?  A little context.

Mississippi Attorney General Jim Hood tried a similar approach with Google in 2014 and was immediately set upon by Google’s lawyers and the “policy” groups it funds like the Electronic Frontier Foundation, R Street, Engine Advocacy and others.  While General Hood didn’t exactly win that, he didn’t really lose it either.

General Hood invited me to be on a panel he moderated at the 2013 summer conference of the National Association of Attorneys General.  The panel topic was “Intellectual Property Crimes Online: Dangerous Access to Prescription Drugs and Pirated Content”.  General Hood spoke on “Google Guiding Consumers Down Illegal Paths.”  My topic was “Protecting Consumers and Advertisers from Unfair Trade Practices,”  which was essentially a briefing on how Google played a central role in brand-sponsored piracy by duping advertisers on both pirate sites and Google’s own properties like YouTube (starting with duped advertiser #1, President Barack Obama).

I have to say that speaking to 50 AGs at the same time is a rather sobering experience.  As our panel presented the case against Google, it was probably the first time that I realized my standing joke that Google opposed the nation state actually wasn’t a joke.  At all.

After talking with some of the AGs who attended our panel, it became apparent that some of them were learning for the first time of the company’s profits from piracy and selling ads against recruitment videos on YouTube for salafi jihadism.  When Google called out all of the dogs on General Hood a few months later to get an injunction that stopped enforcement of Mississippi’s CID, the company’s antics only confirmed to the AGs that it would take a village to challenge the most powerful media company in commercial history.

That epiphany led to 40 attorneys general filing an amicus brief supporting General Hood in the appeal of the aptly titled case of Google v. Hood that crystalized the issue before the 5th Circuit:

This is a case about the authority of state Attorneys General to exercise one of their fundamental powers: the ability to investigate potential violations of state law. What should be a routine discovery dispute in Mississippi state courts, resolved under established state procedures…has instead evolved into a contrivance for a company doing business in the state of Mississippi to invoke federal jurisdiction by asserting potential affirmative defenses to claims that have never been filed.

The NAAG conference and General Hood’s efforts resonated with me, too.  Not to quote myself, but I think this 2017 post about then Missouri AG Josh Hawley’s consumer protection subpoena of Google captures what just happened:

One of Google’s worst policy nightmares is that state attorneys general will wake up to their obligation under state laws to protect both consumers and advertisers from Google’s overreach.  This would potentially force Google to answer for its actions in 51 jurisdictions–some state laws that are essentially common to all 50 states plus the federal government.  These state laws include consumer protection statutes and unfair competition or state antitrust rules that are not overriden (or “preempted”) by simultaneous federal jurisdiction.

Since General Hood got the Full Google (the only thing missing was the fake petitions and Open Media tools), there have been a few efforts by state AGs like Josh Hawley (now Senator Hawley).  While the current case may seem to come out of the blue, it is really the next step in the evolution of the response of dealing with Google as a white collar crime law enforcement matter.