In a surprise move, Google revealed in a status report to Judge Amit Mehta on Friday that it doesn’t intend to file a Rule 12(b) motion to dismiss the federal government’s antitrust case. Google will instead answer the Justice Department’s complaint by Dec. 21, 2020.
If successful, the case could lead to the dissolution of Google and its many properties into independent competing companies—an outcome that would trigger transformative changes in the sports industry.
The filing of a Rule 12(b) motion is a standard maneuver early in a litigation. It involves the defendant claiming that the complaint must be dismissed on account of one or more deficiencies.
One type of deficiency is when the court lacks jurisdiction. This can arise when the defendant doesn’t live or work in the state where the court resides. Another deficiency is a so-called “failure to state a claim upon which relief can be granted”—meaning, even if everything stated in the complaint is true, there isn’t a plausible legal claim. An allegation that a person acted immorally, for example, would be vulnerable to dismissal if the allegation doesn’t also explain how the law was broken. Meanwhile, a case brought after applicable statutes of limitation expire can get tossed. In some instances, certain defenses are forfeited if they’re not raised in a motion to dismiss.
There are several possible reasons why Google might pass on an opportunity to have the case dismissed.
First, as federal judges have remarked, motions to dismiss are typically denied. Google’s attorneys no doubt recognize that a case of this legal and political magnitude is unlikely to resolve so swiftly. The public relations impact of Judge Mehta denying a motion to dismiss—by far the most likely outcome and by no means the end of the case—could be exaggerated and misconstrued by Google’s critics as a sure sign Google will lose the case.
Second, there isn’t an obvious deficiency in the government’s complaint. Google is everywhere in the U.S. and could likely be sued in any court. The government also alleges ongoing violations, meaning statutes of limitation issues are unlikely to apply. Just as important, while Google’s dominance over the search engine market may or may not constitute an illegal monopoly, it’s not an implausible proposition.
Third, even if the case were dismissed on account of a pleading error, the government could be permitted to cure the error and refile the case. A ”win” on a motion to dismiss could prove fleeting.
Fourth, Google’s odds of having the case resolved prior to trial are likely higher at the summary judgment stage. Motions for summary judgment occur after the parties have provided testimony and evidence, including expert analysis. Google, which has a market value of $1 trillion, will surely hire top economists to produce empirical findings that assert, in so many words and numbers, that no monopoly exists and that consumers are better off with Google’s dominance.
Fifth, Google may genuinely believe that the government’s case is weak. The company could relish the opportunity to prove it. This would be an unusual strategy, particularly for a big business with so much on the line. But Google has never lacked confidence; even the company’s sharpest critics would concede the tech giant’s success at least partly reflects an aggressive approach. Perhaps the company wants to accelerate the litigation timeline in order to gain vindication.
Sixth, Google might be “reading the tea leaves” with President-elect Joe Biden set to take office on Jan. 20. The company could reason that the Justice Department, under the authority of President Donald Trump and Attorney General William Barr, holds antagonistic views towards large tech and media companies. Biden could mandate a more moderate approach.
This possibility seems unlikely, given statements made by Biden’s representatives. In an interview with AdWeek, Biden spokesman Bill Russo declined to address the case specifically but stressed that Biden values “an American economy that rewards true competition over monopoly power and hard work over excessive wealth.” Those words don’t telegraph a lighter hand from Biden. The President-elect’s nominee for Attorney General will share more insight.
While the ramifications of U.S. v. Google go well beyond the sports industry, the case is already attracting the attention of sports executives. The fate of the Google search engine, along with Google’s YouTube, will impact leagues’ bidding for media distribution contracts, esports streaming deals, and advertisements and search engine optimization strategies for sports tickets, merchandise and apparel.