Google spends more than US$ 1 billion in legal settlements – 03/05/2024 – Tech

In December, Google spent US$700 million (R$3.5 billion) to resolve states’ claims that its Play Store had pressured app developers with high fees and strict terms. About six weeks later, Google paid US$350 million (R$1.7 billion) to settle a lawsuit accusing it of improperly sharing users’ private information.

On Monday morning, a Massachusetts company called Singular Computing said it had settled its lawsuit with Google involving allegations that the tech giant had stolen its chip designs. Singular said in a press release that it had “entered into a patent license agreement and resolution agreement with Google.”

Google is also on the verge of reaching a fourth court settlement in three months to settle allegations that it distorted the privacy settings of its Chrome web browser.

In just a few months, Google spent well over US$1 billion (R$4.95 billion) to clear the way for legal battles that could be much more damaging to the company and could reshape the entire internet industry: two lawsuits filed by the Department of Justice, targeting Google’s search engine and advertising business.

The Justice Department has accused Google of manipulating the search market through preferential deals with phone makers like Apple and Samsung. The company will return to court in May for closing arguments in a legal test that will likely be the biggest for a technology company since the dispute between the US state and Microsoft more than two decades ago.

In the other federal lawsuit, set to go to trial in September, the Justice Department said Google “corrupted legitimate competition in the ad technology industry” by taking control of a wide range of tools that advertisers and publishers relied on to buy and sell ads. Google has denied any wrongdoing in both cases, saying its search engine promotes online competition and that its ad technology has provided financial support to publishers and other online businesses.

Google said in a statement that it was not clearing the way for future litigation and that it had won dozens of cases in US courts over the past year.

“When it makes sense, we resolve cases to avoid prolonged, uncertain and costly litigation,” said José Castañeda, a Google spokesman. “And when we need to defend ourselves and the industry, we do that.”

The Justice Department could ask the court to ban Google’s preferential deals with browser makers, and could argue that distribution platforms for its search engine, such as the Chrome browser or the Android operating system, should be separate from the company.

The department has previously argued that Google should be required to spin off its advertising technology unit, to reduce the ad industry’s dependence on the company. Any divestment would be an expensive and time-consuming process, reducing the company’s revenue and influence.

Most of the recent settlements also followed the company’s surprise defeat to Epic Games, creator of the popular game Fortnite, in a high-profile trial in December. Epic alleged that Google undermined competition for app developers through high fees and strict rules, and a San Francisco jury agreed. Google has begun its appeal of the ruling, but a federal judge may order the company to accept more payment methods and app stores on the Android mobile operating system.

Douglas Melamed, a visiting scholar at Stanford Law School, said that “at this time of pretty dramatic changes in regulatory and legal risk for all these big technology platforms,” ​​Google may have been thinking it was time to resolve smaller cases “just to not have that hanging over us.”

Google’s patent case with Singular revolved around some of its most important chips — used to run artificial intelligence — called tensor processing units. Singular had said that its founder, Joseph Bates, met with Google from 2010 to 2014 and discussed its chip designs. Years later, Google’s TPUs infringed on two of Bates’ patents, Singular argued when it filed suit in late 2019.

Singular cited an email from Jeff Dean, Google’s chief scientist, in which he wrote that Singular’s designs were “really suited” for Google’s chip initiatives. The parties agreed to settle the case in January.

Singular had sought US$1.67 billion (R$8.26 billion) in damages. The companies declined to comment on the financial terms of the deal. In its statement, Singular said that Google has agreed to a patent license. The technology giant did not admit guilt.

“As we showed in court, Singular’s patent does not apply to our tensor processing units, which were independently designed and built by Google engineers using Google technology over many years,” Castañeda said.

Bates said the company’s goal was to provide supercomputers to universities, which he hopes “can help limit the concentration of power that AI provides to big technology companies.”

In the $700 million settlement with attorneys general from all 50 states, Google agreed to allow app developers to offer their own billing systems and app stores on Android devices. But crucially, Google can continue charging fees to big companies regardless of how consumers pay, even though app developers receive a discount when processing their own transactions. If the states’ claims had not been resolved, they would have been heard during the Epic trial.

In December, Google said it would settle a class action case that alleged that the settings for its private browsing tab in Chrome, called Incognito mode, weren’t very private. The lawsuit claimed that Google had misled users by continuing to track their online activities in Incognito mode.

The case had already generated negative headlines for Google, including the disclosure that its chief marketing officer, Lorraine Twohill, wrote to Google CEO Sundar Pichai complaining that incognito mode was difficult to market because it was not “truly private, thus requiring evasive and confusing language that is almost more damaging.”

A federal judge in California ordered Google to pay sanctions for missing discovery deadlines, causing it to cover part of the legal bills for the plaintiffs’ lawyers, led by high-profile attorney David Boies. Google said in a statement that it had “cooperated with exhaustive discovery.” A trial was scheduled to begin in early February and would have brought more disclosures about Google through evidence and testimony. The company said in December it would resolve the case, and an official settlement is expected this month.

“We settled because we essentially got what we could have gotten if we went to trial and won,” Boies said in an interview.

In February, Google said it would pay US$350 million (R$1.7 billion) to settle a shareholder lawsuit over a privacy breach on its now-defunct social media site, Google+. The service had inadvertently given developers access to users’ information from 2015 to 2018, The Wall Street Journal reported in 2018, and Google was accused of hiding the problem from users and regulators even after fixing the problem.

The company had reached a settlement with Google+ users for US$7.5 million (R$37 million) in 2020, but the lawsuit filed by shareholders persisted. Google has tried several times to dismiss the case, including in 2022 when it unsuccessfully asked the Supreme Court to intervene. In the end, the only way to make the case go away was to make a deal.

In several of these cases, it’s possible that Google would have had to pay more money in damages than the amount it settled for if it had stayed in court, Melamed and other legal experts said.

“The problem with litigation is that whenever you go into court, there is an 80% chance that anything could happen, including you could be arrested,” Melamed said, recalling the words of a friend. “It’s just unpredictable.”