Removed "Fortnite", Apple's antitrust lawsuit won, why did Google lose?

According to media reports[i], Epic Games, the developer of the Fortnite game, has secured an important victory in an antitrust lawsuit with Google in US courts. The jury unanimously found that Google had a monopoly position in the Google Play app store and in-app payment service (Google Play Billing) market, and that it had abused that position to the detriment of Epic Games. Google has said it will appeal the case.

The case is not complicated, Google charges a 30% royalty when users pay for game apps downloaded from the Google Play app store, while Epic's Fortnite game deliberately bypasses Google's billing system and allows customers to make in-app purchases directly. Google then removed Fortnite from the Google Play Store, and Epic filed a lawsuit arguing that Google was a monopoly and asked the court to find that Google had abused its dominant market position.

Interestingly, in a similar case of Epic Games v. Apple for abuse of dominance in the AppStore (Epic's Fortnite bypassed Apple's billing system and allowed customers to make in-app purchases directly before being taken down, and then Epic sued Apple), Apple has now won the case in the first instance. In fact, on the issue of self-built app stores, Google is more lenient than Apple, mobile phones with Google Android operating system, users can install third-party app stores, while Apple mobile phones prohibit users from installing, and mobile phones with Google Android operating system can also install non-Google Play app store apps, and Apple phones are not good.

Personally, I think that the more open company was hit harder, which may have something to do with a major difference between the two cases: Google was clever enough to destroy it over a period of more than 1,300 days, or deliberately did not keep all the evidence of its internal chat records related to the case, while Apple's case did not have such a situation. When the author checked the information, I found a memorandum from the U.S. Department of Justice and a number of states suing Google for spending huge sums of money to buy the browser default search engine from mobile phone manufacturers for alleged monopoly cases, which requires sanctions against Google for destroying documents in the case, which also records in detail the destruction of evidence by Google in the Epic v. Google case, and I will introduce it to you today. It will also be discussed, if in China, how will the destruction of evidence in antitrust cases be punished?

1. Google designed the next-day deletion feature for chat history many years ago

Google has designed a "next-day delete" feature for its "Hangouts" chat tool, and Google uses its own software for written communications, including chat. This allows employees to manage the privacy of their conversations, and chats created with history turned off are usually destroyed by Google 24 hours after they are created.

But the people in this case with whom Google has a duty of custody of evidence, including potential trial witnesses, deliberately conducted a substantively sensitive business discussion through the "Hangouts" chat platform when the history was set to "off". And Google knows that its employees use the "next-day delete" feature to avoid leaving a trail of discussion. In July 2019, the company concluded in a release document that "users often ...... is more likely to discuss sensitive information". In fact, as part of Google's "Communicate with Heart" program, Google has trained employees on the benefits of sending "next-day delete" chats. A training document explains that "next-day deletion of 'chat' is more effective than sending an email, and "it won't be retained by Google like email."

The author believes that the content of the work should be retained by default, for example, when you use Feishu and DingTalk, which are similar to the "Hangouts" function, it is unimaginable to set the chat history not to be retained.

2. At the beginning of the lawsuit, Google concealed the function of deleting chat history the next day

The U.S. Department of Justice and the states believe that Google's obligation to preserve files begins when it reasonably anticipates litigation. According to the company's privilege log, back in May 2019, Google began retaining material "related to an ongoing investigation by the Department of Justice." Subsequently, the U.S. Department of Justice and each prosecuting state sent the first Civil Investigation Request (CID) to Google on August 30, 2019, and two follow-up Civil Investigation Requests and Electronically Stored Information Questionnaire (the "ESI Questionnaire") in October 2019. The questionnaire defines the Electronically Stored Information Questionnaire as "meaning electronically stored information as used in the Federal Rules of Civil Procedure."

On November 20, 2019, Google responded to the Questionnaire on Electronically Stored Information, stating that it has two main written policies related to file retention, which govern the retention of email, general documents, legal holds, and other subjects, as Exhibit A and Exhibit B, respectively. However, Google did not mention or attach any other file retention policies in its responses to the questionnaire, including the destruction of chat logs in this case. Google says it has taken legal action and that the files, including version history, will be saved from the date of collection. The hold notice also instructs the custodian to save the relevant documents.

But instances involving evidence custodians in this lawsuit show that over the years, Google employees have deliberately shifted conversations from email to chat, sometimes explicitly requesting that history be kept closed. (July 27, 2021, email between possible trial witnesses Ana Kartasheva and Jim Kolotouros: "We should chat live so you can get the history, and it's best not to put it in the email.") "); (Roundtable breakfast with Don Harrison, May 2019, comment: "Since this is a sensitive topic, I prefer to discuss it offline or through on-hook.") ")。

Although the anti-monopoly lawsuit against Google was filed by the U.S. Department of Justice, this case is theoretically more like a civil lawsuit in the mainland than an administrative investigation, and compared with the procedures in the United States, the anti-monopoly law enforcement law gives greater powers to the administrative authorities, and article 47 of the anti-monopoly law enforcement law provides that after a written report to the principal person in charge of the anti-monopoly law enforcement agency and approval, the anti-monopoly law enforcement agency may consult and copy the relevant documents, agreements, and agreements of the business operator, interested party or other relevant units or individuals under investigation. Accounting books, business correspondence, electronic data and other documents and materials. The chat records of the hangouts in this case should be electronic data and other documents and materials.

Article 62 of the Anti-Monopoly Law stipulates that if the anti-monopoly law enforcement agency refuses to provide relevant materials or information, or provides false materials or information, or conceals, destroys or transfers evidence, or has other refusal or obstruction of the investigation, the anti-monopoly law enforcement agency shall order it to make corrections and impose a fine of less than 1% of the company's sales in the previous year...... The author checked that Google's revenue in 2022 is $282.8 billion, so if it is in China, this matter can be fined up to $2.828 billion.

3. Google publishes a written policy requiring the destruction of chat history after 24 hours

The U.S. Department of Justice and the prosecuting states have discussed with Google about the preservation and collection of materials, but Google's communications have repeatedly obscured the fact that Google continues to destroy employee chat history. While Google has been destroying historical chat history for years, when the case was filed in October 2020, the company did not have a file retention policy specific to chat history. Google did not have a separate written chat retention policy prior to November 2020. But in November 2020, Google instituted a written policy requiring the destruction of historical chat history after 24 hours. The document explains that Google's previous policy stated that the default deletion time was 24 hours when message history was set to off: in Google today, everyone has history turned off by default".

The November 2020 policy explains that employees can change the default history. Ditto. In February 2022, Google revised this chat retention policy to remove anything about individuals being able to change their default chat retention settings. Despite Google's promise to supplement its response, Google has concealed its new chat history destruction policy. It wasn't until January 2023 that Google made this new written policy available to the U.S. Department of Justice and the prosecuting states.

Fourth, in the middle of the lawsuit, Google went from denial to relent

Throughout the fact-finding process (December 2020 to May 2022), Google repeatedly assured the U.S. Department of Justice and the states that filed the lawsuit that it was keeping and collecting chat logs in the manner that began in November 2019, i.e., without pointing out any restrictions on saving or collecting chat logs.

For example, in April 2021, Google confirmed that "it is producing a response document from the same custodial data sources that were used during the pre-investigation period of the DOJ's seizure of evidence." A few months later, Google wrote: "We reiterate that we are collecting and searching Google as part of the same process we use to collect emails." After a meeting with Google Lawyers in 2021, the U.S. Department of Justice and attorneys in each prosecuting state documented the understanding of the U.S. Department of Justice and each prosecuting state."

Similarly, in March 2022, the U.S. Department of Justice and the states that filed the lawsuit challenged Google's presentation of chat logs, stating that the company appeared to have produced only a few hundred chat logs, despite "Google's employees regularly using instant messaging to communicate matters relevant to this case." In response, Google reassured the U.S. Department of Justice and the states that the company had followed the "agreed review process" of both parties. Google has never mentioned its policy of deleting chat history every 24 hours.

But in Epic v. Google, Epic filed a motion for sanctions against Google for destroying chat history. Following the conclusion of the case case in November 2022, the court ordered a hearing on the "Google eChat data disclosure dispute". The hearing was held in January 2023. In a November 23, 2022 letter, the U.S. Department of Justice and the prosecuting states requested information about Google's litigation retention and chat history retention policies.

The U.S. Department of Justice and the prosecuting states wrote again on December 5, 2022. Google again declined to respond. On January 11, 2023, after talks about Google's retention policy, Google admitted for the first time that it "deleted the next day." "Chat history is automatically deleted within 24 hours: All chats that are not recorded are deleted within 24 hours and are not automatically retained for legal hold, however, chat records that are included in the record (which are usually retained for 30 days or 18 months, depending on the type of chat) are automatically retained by the legal evidence custodians.

5. Evidentiary hearings in the Epic case revealed the issue of document destruction

On January 12, 2023, Epic held an evidence hearing on Google's breaches. Epic's proceedings revealed that there were at least nine custodians overlapping with the case, each of whom was a potential witness to trial. Documents and testimony provided by Google at the Epic evidence hearing show:

Google's chat retention policy is to keep chat history for 24 hours if the history is off. For most categories of chat history, Google sets the default retention history of chat history to "Off". Employees know that "next day deleted" chat history will be irreversibly destroyed after 24 hours. Google has "the technical ability to set history opening as the default setting for all employees who are legally put on hold," but it doesn't. When you open the chat history, "it only works after 24 hours of messages sent after the settings were changed".

At the conclusion of the Epic hearing, Judge Donato noted that: (1) Google's chat feature may in fact contain relevant evidence; (2) Google did not systematically save these chats, but instead left it up to each person who received a withholding notice to decide whether or not to save the chats; (3) Google never monitors chat logs to determine whether evidence may have been lost. Judge Donato ordered Google to provide more information to the plaintiffs. In response, Google admits that in the past five years of litigation, Google has never saved all chats of the individuals in question by opening the chat history.

In Epic's closing argument, Judge Donato said: "We've seen all the evidence: "We've seen all the evidence Google training and other documents are saying: Hey, if it's sensitive information, you might want to use a chat tool. It is obvious to any objective and rational lawyer that a chat tool may contain relevant evidence.....".

6. Google's policy of being forced to provide evidence destruction

On January 30, 2023, Google made the company's current and previous versions of the chat history retention policy available to the U.S. Department of Justice and prosecuting states for the first time. The company also provided an unedited version of the destruction briefing from both parties in the Epic case.

The files, which include new files in addition to the public ones, show Google employees masking sensitive conversations by keeping historical chat logs. However, Google still refuses to provide documents for its lawsuit. On February 7, 2023, after another meeting and negotiation, Google finally agreed to stop automatically deleting historical chat history before the end of work on February 8, 2023; But this date was later postponed to February 9, 2023.

The U.S. Department of Justice and the prosecuting states argue that Google's deliberate decision to preserve the Electronically Stored Information Questionnaire is evident in its deliberate decision to create a 24-hour auto-delete feature for chat history closures, to set many chats to the history off default setting, and to maintain automatic deletion in the face of anticipated and ongoing litigation. In fact, in November 2020 – a few weeks after the lawsuit filed in this case – Google instituted a separate, record-specific retention policy that explicitly stated that messages with history turned off would be destroyed after 24 hours, doubling down on its "next-day deletion" policy. As a result, Google cannot claim that chat messages were deleted "without knowing or accident."

Google is aware that its employees discuss substantive business through chats, which will be irreversibly destroyed after 24 hours. However, Google "did nothing" to suspend the auto-delete policy and did not monitor whether employees kept chat logs that could be relevant. In addition, not only did Google commit vandalism over a period of several years, but the company's vandalism was "worse" because Google continued to vandalize historical chat messages even after the lawsuit began.

In the face of Epic's 2022 challenge and subsequent investigations by the U.S. Department of Justice and the states that prosecuted it, Google refused to change (or even disclose) its auto-deletion policy, only to respond in the face of a sanctions motion, and finally agreed to stop destroying files. In short, Google knowingly destroyed the documents until the risk of sanctions made it impossible to continue the destruction.

7. This case is tried in a Chinese court, and Google will also lose the case

In the author's opinion, Google designed "next-day deletion" It can be seen from the results that although Apple is closed, they honestly submitted evidence and legal defense in the lawsuit, and were not found by the court to constitute an illegal monopoly, while Google's Android system is actually much more open than Apple's system, but it was judged to be an abuse of market dominance, and it is likely that the jury and the court believe that Google's behavior is a ghost in its heart and deliberately conceals important evidence, so this part of the evidence that has not been preserved can be determined to be unfavorable to it, which is not one or two recordsIt is a record of Google's internal communication for more than 1,300 days, and the more you destroy, the more serious the legal consequences will be.

Article 112 of the Judicial Interpretation of the Civil Procedure Law of the Mainland stipulates that if documentary evidence is under the control of the opposing party, the party bearing the burden of proof may apply in writing to the people's court to order the other party to submit the documentary evidence before the expiration of the time limit for presenting evidence. Where the reasons for the application are sustained, the people's court shall order the opposing party to submit it, and the applicant shall bear the costs incurred in submitting documentary evidence. Where the opposing party refuses to submit it without a legitimate reason, the people's court may find that the content of the documentary evidence asserted by the applicant is true. If the case were tried in a mainland court, it would also be found that the missing company-wide chat history of more than 1,300 days was unfavorable to Google, resulting in its defeat.

Finally, Epic's lawsuit against Google is just one of Google's many antitrust lawsuits, as I wrote in "Can Google Win the Antitrust Lawsuit After Signing a $10 Billion Agreement with Apple and Samsung?"[ii] As mentioned in the article, the U.S. Department of Justice has filed two antitrust lawsuits against it, one is that Google spent a lot of money to bind the default search engine of mobile phone browsers to mobile phone manufacturers for suspected monopoly, and the other is to accuse it of illegal monopoly in the advertising model, and at the same time act as an agent for websites and advertisers, and also do online advertising exchanges, just like it is a brokerage firm like Goldman Sachs and Da Mo, and also does the work of the New York Stock Exchange, with serious conflicts of interest. These two cases will also involve the issue that Google cannot provide all internal chat history for more than 1,300 days due to the next day deletion function, so it may be punished again for this problem. In short, I think they're pretty hanging.

The author of this article is You Yunting, senior partner of Shanghai Dabang Law Firm, and intellectual property lawyer. The views expressed in this article are solely those of the author.

[i] https://mobile.zol.com.cn/846/8463522.html

[ii] https://mp.weixin.qq.com/s/6F9T6dJNDUjDbP1p7YOQzA