Googlers Followed Common Practice in Avoiding Antitrust Triggers

Alphabet Inc.‘s Google taught its employees to steer clear of certain phrases that could implicate antitrust violations, but such practices are standard and don’t help the Justice Department make its case against the online search giant, analysts and in-house counsel say.

The DOJ in its blockbuster monopoly trial against Google, currently in its third week, alleges the company illegally maintained its hold over the market for search engines. As part of that argument, the agency introduced an old company memo urging employees to avoid certain words and phrases for fear they could serve as indicators of monopoly power.

In opening statements Sept. 12 at the US District Court for the District of Columbia, DOJ lead trial attorney Kenneth Dintzer laid out how Google’s behavior over the last two decades showed it had something to hide. The company “hid and destroyed documents because they knew they were violating the antitrust laws,” he said.

But former in-house counsel for Kraft Heinz Co. and General Motors Co. say such word bans are widely used to comply with antitrust law. It’s best to avoid words that have antitrust implications, as employees untrained in the discipline are prone to misuse them, creating evidence of wrongdoing where there’s nothing actually wrong, corporate attorneys say.

“It’s my impression that it’s very common, because I certainly did something similar when I was trying to instruct people when I was at Kraft,” said Ted Banks, a former chief counsel for global compliance and associate general counsel at the food manufacturing giant.

If Google can show such advice is common, it’ll undermine DOJ’s attempt to imply the company had something to hide.

Even if Google’s behavior on the matter differs from normal compliance advice, “I’d hope for the government’s sake that this isn’t their strongest argument,” said Sean Sullivan, a professor at the University of Iowa College of Law and former FTC antitrust attorney.

Full Circle

According to the evidence presented at trial, Googlers were encouraged to avoid words and phrases including “market share,” “scale,” and “dominance.” They were taught that Google didn’t “leverage” anything, “lock up” competitors, or “bundle” products. Broadly, employees should “avoid metaphors involving wars or sports, winning or losing,” according to the 2011 presentation for the search team that was shared during the trial.

In another example, Hal Varian, Google’s chief economist, wrote in 2003 that the company had “to be sensitive about antitrust considerations,” according to a missive introduced at the trial. “We should be careful about what we say in both public and private,” he wrote.

Read More: Googlers Told to Avoid Words Like ‘Share’ and ‘Bundle,’ US Says

The DOJ’s own past litigation has helped give oxygen to compliance experts who recommend employees avoid certain words.

Many attorneys became more mindful of the power of internal discussions since the last time the DOJ went to trial against a Big Tech monopoly: its case against Microsoft Corp. in the 1990s, said Steven Cernak, a former in-house antitrust counsel at General Motors and now a partner at Bona Law.

In that eight-month trial, which centered on Microsoft’s Internet Explorer and its dominance over competing web browsers, a government witness alleged an executive at Microsoft planned to “cut off Netscape’s air supply” by effectively giving away free browsers to choke off rivals’ revenue streams.

Microsoft denied the claim, but the DC federal court ruled in favor of the DOJ. The ruling was reversed on appeal, and the company eventually settled the case. But it’s shaped compliance practice ever since.

“I remember using the trial—the documents produced in the trial—as examples of words that are going to get thrown back in your face,” Cernak said.

‘Really Rotten’

Even if such advice is typical, it illustrates a bigger problem, said Lee Hepner, legal counsel at the antimonopoly advocacy group the American Economic Liberties Project.

“There are folks out there who are trying to portray this as extremely banal and insignificant, if not ubiquitous in corporate training,” Hepner said. “There’s something really rotten in corporate America if basic training on antitrust consists of how to avoid talking about antitrust, instead of how to avoid running afoul of the antitrust laws,” he said.

Hepner pointed to the counterexample of human resources trainings, which are mandatory for most employees in the US and recommend not just avoiding the discussion of sexual harassment but also preventing such issues in the first place. Antitrust compliance should do the same, he said.

“It’s not a bad point” that the effect of compliance training may be to cover up actual wrongdoing, rather than to tamp down on potentially misleading evidence, Banks, formerly at Kraft, acknowledged. But that doesn’t mean—as the DOJ may be seeking to illustrate—that policing certain language is evidence of monopoly power or lawbreaking, he said.

“Your sloppiness can create a problem where none exists,” said Banks, now a partner at Scharf Banks Marmor.

“You don’t want to give someone a red flag when it shouldn’t be. Yeah, it could be used to hide something, but I don’t think so. If someone is accused of an illegal tying agreement, not calling it a tie is not going to change anything,” he added.

Evading Scrutiny?

But evidence at trial showed that Google knew its chats could eventually be used against it, Hepner argued. He pointed to allegations that the company systematically destroyed internal chat records in an attempt to suppress evidence; a federal judge in March affirmed those accusations in an unrelated antitrust case against Google in California.

Similar evidence has helped the DOJ in the past, so Google learned its lesson, Hepner said. It’s innovating around discovery tools and tactics, he added.

“Their other innovation is evading scrutiny for anticompetitive behavior, and that makes it doubly hard to enforce these laws,” Hepner said.

Internal company discussions, especially involving executives, carry a lot of weight in antitrust trials, said Eleanor Fox, a professor at NYU School of Law.

Employees sometimes exaggerate, which is how a company would justify instructing them not to use certain words in the first place, Fox said. “If the employees of Google think it’s a monopoly, that can color whether a judge or jury is going to call Google a monopoly.”

There is a difference between colloquial usage and illegal usage. Advertising executives, for example, will mean something different when they talk about a “market” than when antitrust practitioners do, she said. But even if such advice is common in the industry, it’s still suppressing language that could be used as evidence, Fox said.

“The Justice Department would still be able to make its case: if it’s improper, then it’s improper across the board and everybody should know it,” she said. “It doesn’t whitewash it if everyone is doing it.”

The case is USA v. Google, D.D.C., No. 1:20-cv-03010.