The judge in a pair of closely watched antitrust lawsuits against Google acknowledged the alleged harms suffered by publishers and then dismissed the amended complaints filed by Chegg and Penske Media. The order in the Penske case says that Google’s motion to dismiss was granted without prejudice and that the order is final and appealable.
Judge Acknowledges Alleged Harm
The judge’s order acknowledges that publishers and the employees of publishers are suffering and notes that he is not unsympathetic.
He wrote:
“The court does not treat Plaintiffs’ alleged harms lightly. Nor is it unsympathetic to the situation publishers now find themselves in, and the knock-on consequences to journalists, educators, and other online creators whose content Google takes and repurposes without compensation.”
What The Ruling Means
The judge did not find that publishers suffered no harm. The reason for dismissal was that the plaintiffs’ allegations did not meet the requirements of federal antitrust law. The judge noted that they failed to establish their monopolization claims.
Judge Rejects Five Categories Of Claims
The judge rejected the plaintiffs’ five categories of claims:
- Reciprocal dealing
- Tying
- Unlawful monopoly maintenance
- Attempted monopolization and monopoly leveraging
- Unjust enrichment
Reciprocal Dealing
Reciprocal dealing is when two parties agree to exchange business with each other. This refers to the idea that publishers allow Google to crawl and index their content and, in exchange, Google provides referral traffic.
The judge ruled that the plaintiffs did not plausibly allege an actual agreement in which Google provided search traffic in exchange for publishers supplying content.
That ruling was based on the logic that the plaintiffs did not assert a plausible “agreement” or allege the elements of an agreement or the circumstances under which that agreement arose. Judge Mehta also listed other elements of an agreement that were not alleged, including communications between Google and the plaintiffs showing that an agreement was negotiated or discussed.
Then he explained the key reason why the plaintiffs failed:
“Plaintiffs have pleaded only that they have an “expectation” that Google will send them search traffic if they make their content available for free. But an expectation is not an agreement.”
Tying
Tying is when a company uses its power over one product to force customers to take a second, separate product. Penske did not plausibly establish that Google Search and AI Overviews are separate products with separate consumer demand.
Unlawful Monopoly Maintenance
The judge also ruled that publishers lacked standing to challenge Google’s alleged monopoly maintenance in the general search services market. The word “standing” in this context means the plaintiffs had not suffered the kind of injury required to bring that antitrust claim.
The judge explained:
“To survive a motion to dismiss, Plaintiffs must plausibly establish that they have antitrust standing as to these claims. As with other plaintiffs appearing before this court, they have not.”
The judge offered additional details for his ruling:
“Plaintiffs claim to be participants in the general search services market with antitrust standing under two theories. First, Plaintiffs fashion themselves as “suppliers” of Search Index Data in the market for general search services and “purchasers” of Search Referral Traffic.
Alternatively, and simultaneously, Plaintiffs argue they have standing because their injuries are “inextricably intertwined” with the injuries suffered by Google’s new AI competitors in the general search services market…
Neither theory persuades.”
Attempted Monopolization and Monopoly Leveraging
The plaintiffs did not clearly define the publishing markets they said Google was trying to dominate or adequately show that Google was likely to monopolize them.
Judge Mehta explained:
“By failing to define plausible markets, Plaintiffs do not make out a necessary element of their attempted monopolization claims. Their monopoly leveraging claims fall for the same reason. Both claims also suffer from other basic pleading deficiencies.
Count V of Chegg’s Amended Complaint and Count VI of the PMC Plaintiffs’ Amended Complaint must be dismissed.”
The memorandum opinion goes into a fair amount of detail to explain the ruling:
“…Chegg’s claim would still fail because it has not plausibly pleaded that Google has a dangerous probability of monopolizing a market in which it participates.”
Of Penske’s claim he writes:
“What’s more, this market definition, even if the court were to accept it, renders implausible their attempted monopolization theory.
Indeed, the PMC Plaintiffs do not even attempt to quantify Google’s market share in online publishing or offer a single fact to support their allegation that Google has a dangerous probability of monopolizing the sweeping market they describe.”
Unjust Enrichment
After the federal claims were dismissed, the judge also dismissed the California unjust enrichment claims rather than decide them in federal court.
Judge Mehta explained:
“Having dismissed all federal claims in these actions, the court has discretion to either exercise supplemental jurisdiction over the remaining state law claims or decline to do so.
(dismissing all federal law claims and declining to exercise supplemental jurisdiction over remaining state law claims, including unjust enrichment). In exercising this discretion, the court considers “judicial economy, convenience, and fairness to litigants.
In the typical case in which all federal-law claims are dismissed, the “‘balance of factors to be considered . . . will point toward declining to exercise jurisdiction over the remaining state-law claims.'” “
Cases Are Decided By What The Law Requires
Judge Mehta’s ruling will no doubt be disappointing to publishers and SEOs around the world who feel that Google is abusing its position of market dominance in search. A careful reading of the memorandum shows that the judge dismissed the complaints because the plaintiffs failed to allege facts that met the requirements of federal antitrust law.
The judge’s ruling was not saying the publishers suffered no harm. He was saying the complaints, as pleaded, did not satisfy the legal requirements for those antitrust claims.
Featured Image by Shutterstock/PHOTOCREO Michal Bednarek
