Balancing transparency and confidentiality: U.S. court shields Google’s EC settlement documents from disclosure

Global competition investigations and litigation raise a myriad of challenges: a lesser commented one is protecting the benefits of settlement proceedings in the context of multi-jurisdictional disclosure. As global regulators consider similar theories of harm and common remedies, there is greater pressure on parties to produce information on the feasibility assessments across jurisdictions. As part of this process, they must ensure that their statements to different regulators are consistent. However, at least one decision has sought to extend certain U.S. protections on pre-settlement negotiation statements to specifically cover pre-settlement statements made to foreign regulators, in order to avoid discouraging settlement negotiations. 

A Transatlantic spotlight on Google’s AdTech practices 

A magistrate judge in the United States District Court for the Eastern District of Virginia recently shed light on the U.S. approach to confidentiality of EU settlement proceedings. Following a successful trial verdict, the DOJ and state enforcers have sought disclosure of a broad set of materials as part of their remedy proceedings seeking divestiture of Google’s ad exchange (AdX) and publisher ad server (DFP). Google has responded that these proposed remedies are not feasible.

Here, the court focused on a request for disclosure of Google’s potentially contradictory communications as part of ongoing settlement discussions in a parallel European Commission (EC) investigation. The EC (see AT.40670) has been investigating Google’s advertising technology business since 2021, focusing on whether Google abused its dominant position by favouring its own online display advertising technology services over those of competitors, to the disadvantage of other service providers, advertisers, and online publishers. In 2023, the EC announced its preliminary view that Google may have to make major changes to its business model and set out its preliminary view that ‘only the mandatory divestment by Google of part of its services would address its competition concerns’. The DOJ and state AGs sought access to confidential communications with the EC related to the feasibility of these proposed remedies during settlement negotiations. 

Shifting disclosures drawing the line on pre-settlement negotiations

The court made a distinction between different types of documents shared with the EC. 

• First, it distinguished ordinary investigative materials that included factual information related to the feasibility of proposed remedies, such as Google’s response to the EC’s statement of objections (remedy chapter) and accompanying report, which the court already ordered Google to disclose on 2 July. 
• Second, the court referred to the distinction between final settlement agreements and documents generated during ongoing pre-settlement negotiations. The latter should enjoy “enhanced protections” due to the existing public interest in ensuring the confidentiality of settlement processes. 

As the plaintiffs had not demonstrated a particularized need for pre-settlement documents, the Court denied the motion. Importantly, the court found that the disclosure was unlikely to give rise to new admissible evidence where statements in settlement negotiations are generally inadmissible just for impeachment. In addition to the investigative materials above, the court highlighted that it had also already required Google to produce over its privilege objections all internal reports and analyses prepared by non-lawyers at Google considering remedy feasibility more broadly. 

What comes next?

The approach protects, for now, the EU’s own approach to settlement documents, whilst crossing the “grey” line by ordering the disclosure of documents from an ongoing investigation. This is, however, unlikely to be the final word in a fast developing area of multijurisdictional competition litigation.