Google Under Investigation in Missouri – Will the Tech Giant be Fined, or Need to Change its Practices?

Posted on by Michael Block

On Monday, November 13, the Attorney General of Missouri, Josh Hawley, opened an investigation into Google’s business practices, looking into the possibility that the tech giant violated the state’s consumer protection and antitrust laws.1 The AG said that “the state’s preliminary investigation had found that Google may be collecting more information from users than the company was telling consumers,”2 and that “[his] Office will not stand by and let private consumer information be jeopardized by industry giants.”3 Being the target of an investigation is never good for a company; Google recently experienced a European Union (“EU”) investigation into similar activity that resulted in the European Commission finding that Google had intentionally skewed search results to prioritize its own program, Google Shopping, over competitors.4 Google’s leadership should be thinking intently about changing its corporate and legal strategy to combat what appears to be a rising tide of public sentiment against its practices. The EU’s finding resulted in a €2.4 billion ($2.7 billion) fine and an order to change the way it operates its search engine.5

This is not the first time that Google has come under investigation in the United States, nor is it the first time that states have tried to step in when the federal government was not doing enough. In 2013, for example, the Federal Trade Commission (“FTC”) concluded a two-year investigation when Google agreed to change some of its practices.6 Mr. Hawley, however, called that penalty “short even of a slap on the wrist,” and went on to cite this perceived failing as an important reason for his desire to open this new investigation.7 Additionally, over the past several years, attorneys general from states such as Utah and Mississippi have questioned Google’s consumer protection and data aggregation policies and called on the FTC to reopen its investigation into Google, to varying degrees of success.8 According to an economics professor at NYU, states often team up to bring suit against companies as large as Google; it will be interesting to see whether Missouri is able to recruit additional states to join its fight, particularly California, the largest state in the union and the home of Google and many of the largest tech companies.9

Furthermore, Hawley might be bringing suit as a result of his alleged connection to tech billionaire Peter Thiel. According to the Wall Street Journal, “[s]ome critics and competitors of Google see state attorneys general as potentially the most likely route to regulatory action in the U.S.”10 The Kansas City Star reports that Thiel, a noted competitor and critic of Google, donated $300,000 to Hawley’s campaign for Missouri Attorney General.11. When asked about the possible connection between Thiel and Hawley’s desire to investigate Google, Hawley’s office declined to directly answer the question.12 In addition to being a long-time critic of Google, even calling the company a “monopoly,” Thiel has made headlines for financing Hulk Hogan’s lawsuit against Gawker, which shows his eagerness to use litigation to his advantage.13

It is not clear whether this investigation will bear any fruit; after all, previous investigations – on both the state and federal levels – failed to bear much fruit.14 The United States has decidedly less robust policies regarding privacy protection than the European Union.15 Still, as public opinion shifts towards embracing greater regulation of tech companies such as Google, Apple, and Facebook, it is also likely that there will be more legislation and regulation emanating from state governments and perhaps even federal agencies like the FTC. Furthermore, it seems likely that attorneys general will undertake more zealous investigation and prosecution throughout the nation.

  1. Daisuke Wakabayashi, Missouri Opens Antitrust Investigation Into Google, N.Y. Times (Nov. 13, 2017), https://www.nytimes.com/2017/11/13/technology/missouri-google-investigation.html. ↩

  2. Id. ↩

  3. Bryan Lowry, Missouri AG Josh Hawley Launches Investigation of Google, Kan. City Star (Nov. 13, 2017, 7:00 AM), http://www.kansascity.com/news/politics-government/article184113056.html. ↩

  4. See Cara Bayles, Mo. AG Investigating Google’s Competition, Privacy Practices, Law360 (Nov.13, 2017, 4:08 PM), https://www.law360.com/articles/984323/mo-ag-investigating-google-s-competition-privacy-practices. ↩

  5. Eric Kroh, EU Fines Google a Record €2.4B Over Search Practices, Law360 (June 27, 2017, 6:04 AM), https://www.law360.com/articles/936590. ↩

  6. See Jack Nicas, Missouri Attorney General Launches Probe Into Google’s Business Practices, Wall St. J. (Nov. 13, 2017, 7:08 PM), https://www.wsj.com/articles/missouri-attorney-general-launches-probe-into-googles-business-practices-1510592964?mg=prod/accounts-wsj. ↩

  7. Id. ↩

  8. See id. ↩

  9. Id. ↩

  10. Id. ↩

  11. Bryan Lowry, Is PayPal Co-founder Peter Thiel Influencing Missouri AG Josh Hawley’s Google Probe?, Kan. City Star (Nov. 15, 2017, 2:38 PM), http://www.kansascity.com/news/local/news-columns-blogs/the-buzz/article184796788.html. ↩

  12. Id. ↩

  13. See id. ↩

  14. See Nicas, supra note 6. ↩

  15. Ira S. Rubinstein & Nathaniel Good, Privacy by Design: A Counterfactual Analysis of Google and Facebook Privacy Incidents, 28 Berkeley Tech. L.J. 1333, 1345 (2013) (“It is the received wisdom among most privacy scholars that U.S. privacy law relies on a scaled-down version of [fair information practices] as compared to the more robust version adopted in Europe and other nations that base their national privacy laws directly on the OECD Privacy Guidelines or the E.U. Data Protection Directive….This approach mainly emphasizes procedural requirements over substantive obligations such as fair processing, data minimization, or data quality.” ↩

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