Google Faces Mass Arbitration By Advertisers Seeking Billions (bloomberg.com) 9
An anonymous reader quotes a report from Bloomberg: Alphabet's Google is facing billions of dollars in potential damage claims as part of mass arbitration tied to the company's online search and advertising technology businesses, which courts have ruled were illegal monopolies. Advertisers are banding together to seek payouts through mass arbitration proceedings. While many companies that displayed ads purchased through Google -- including USA Today Co. and Advance Publications -- have sued for damages since the rulings in 2024, advertiser contracts with the search giant require mandatory arbitration over legal disputes.
In arbitration, legal disputes are handled by a mediator, a process that tends to favor companies in individual claims. Mass arbitration -- where 25 or more claims against the same company are pooled together -- have become more common and provide a greater likelihood of settlement awards for claimants. Ashley Keller, a Chicago lawyer whose firm has handled mass arbitrations against DoorDash, Postmates and TurboTax-maker Intuit, said he's already signed up a "significant number" of advertisers to participate in claims against Google. The first of those are expected to be filed this week.
"Two federal judges have already adjudicated Google to be a monopolist," Keller said in an interview with Bloomberg. "It seems sensible to seek redress." Keller, who is also representing Texas and other states in a lawsuit against Google for monopolization of advertising technology, estimates potential claims for online search and display ads could reach $218 billion or more, based on calculations from an economist his firm has hired. Similar mass arbitrations have lasted 12 to 24 months between the filing of claims and resolution, he said. "Given the nature of these matters, we cannot estimate a possible loss," Google said in a recent corporate filing. "We believe we have strong arguments against these open claims and will defend ourselves vigorously."
In arbitration, legal disputes are handled by a mediator, a process that tends to favor companies in individual claims. Mass arbitration -- where 25 or more claims against the same company are pooled together -- have become more common and provide a greater likelihood of settlement awards for claimants. Ashley Keller, a Chicago lawyer whose firm has handled mass arbitrations against DoorDash, Postmates and TurboTax-maker Intuit, said he's already signed up a "significant number" of advertisers to participate in claims against Google. The first of those are expected to be filed this week.
"Two federal judges have already adjudicated Google to be a monopolist," Keller said in an interview with Bloomberg. "It seems sensible to seek redress." Keller, who is also representing Texas and other states in a lawsuit against Google for monopolization of advertising technology, estimates potential claims for online search and display ads could reach $218 billion or more, based on calculations from an economist his firm has hired. Similar mass arbitrations have lasted 12 to 24 months between the filing of claims and resolution, he said. "Given the nature of these matters, we cannot estimate a possible loss," Google said in a recent corporate filing. "We believe we have strong arguments against these open claims and will defend ourselves vigorously."
Won't help consumers (Score:1)
So what happens is that instead of competition the beef producers pay out settlements to a few big guys that can sue. McDonald's pockets the money, they can run their competitors out of business because smaller guys can't force settlements and prices keep going up along with corporate profits.
That's what's happening here instead of law enforcement we get bac
"Mass Arbitration" vs "Class Action Lawsuit" (Score:2, Interesting)
In a Class Action Lawsuit, the law firms cash out big-time if they win. The law firm gets a percentage (often 1/3) of the total settlement, so that's a strong incentive to bring these suits and make them as broad as possible.
BUT, I don't know if arbitration proceedings have the same financial advantages for the arbitrator. That could be a Very Important distinction. I strongly suspect the reason this is in arbitration is the contract terms between the advertisers and Google force arbitration to settle co
Re:"Mass Arbitration" vs "Class Action Lawsuit" (Score:5, Insightful)
Arbitration is to try to prevent class action lawsuits. Basically class actions are costly because of numbers - if you steal $1 from many people, 99.9999% of them will not do a thing about it because a lawsuit will cost more than $1. Class actions solve this - because if you know a million people, suddenly a million dollar payday is a lot more worth it to pursue as a lawsuit than a million $1 lawsuits. Of course, it would probably cost $250K to do, so you'll get 75 cents on the dollar. Though usually you want punitive damages so the company doesn't try it again, so you might get $2 after getting ripped off $1.
And lawyers are often not part of the compensation - if they reach a $200M settlement, that $200M is almost all going to people of the class - the lawyers getting another $50M (remember they have to front all the costs upfront) is outside the settlement. Then the lawyers need to make arrangements to distribute the payout which is a lot harder than it is - whether it's printing cheques, or doing digital deposits.
That's why companies went with arbitration instead - because now if they screw you out of $5, you're not likely to bring in a case for that and if you're not doing that, they can keep that money.
The way around this was accidentally discovered a few years ago - they realized that companies were relying on the fact that consumers weren't going to bring cases against them with arbitration, but suddenly if you can get a sizeable group, the arbitration fees can be exorbitant. And since the company has to pay for it, this can be rather expensive.
So some lawyers started specializing in mass arbitration where you can get thousands or more clients together to individually argue their case. If it costs the company $100 per case, suddenly they can be out thousands in arbitration fees in the span of a month. And if you do it right, the arbitration company might get slammed because they probably are to handle maybe 10 cases a day per arbitrator, and suddenly having 2000 cases presented presents a huge issue.
Re: (Score:2)
Thanks... The thing about this case, though, is we're not talking about individuals, but about companies, both small and large. So the pockets are deeper, the ability to coordinate is better, and the motivation to reach a settlement is stronger.
Chipotle (Score:3)
https://www.latimes.com/busine... [latimes.com]
Arbitration contracts are changing (Score:2)
to try and force plaintiffs to arbitrate individually as well as prohibiting class actions.
Arbitration contracts frequently include clauses that force plaintiffs to resolve disputes individually, waiving rights to class actions or joinder, and replacing court litigation with private, binding arbitration. These clauses are generally enforceable under the Federal Arbitration Act (FAA). However, challengers can fight these clauses by arguing they are unconscionable or by exploiting situations where companies r
Re: (Score:3)
It's better to organize a mass arbitration campaign. One class action lawsuit is likely going to be far cheaper to defend that 50,000 arbitration claims that the company is on the hook to pay for the arbitrator (not to mention the cost of representation at these hearings) even if the case is ultimately found in their favor.
Two things (Score:2)
A) TFA is paywalled. Something about people in glass houses or something like that.
B) Since I can't read the article without being extorted, what harm are these companies claiming?