?? Will The DOJ Undo Alphabet?
Legal Tidbit:
On October 10, 1967, the United States began enforcing the Outer Space Treaty that demilitarized space. Originally, the treaty was signed by the US, UK, and USSR, but has since been signed by 115 nations (including all spacefaring nations). The treaty was a result of the development of Intercontinental Ballistic Missiles (ICBMs) which could carry and deliver nuclear warheads rapidly to just about any corner of the globe. In December 2019, despite the treaty, the US founded a new branch of the military called the United States Space Force.
This Week:
Alphabet Spells Monopoly
The battle against Google rages on, with a one-two punch for the Internet giant.
On Monday, U.S. District Judge James Donato in San Francisco ordered the tech behemoth to overhaul its Android app business citing anti-competitive behavior.
According to Reuters , "for three years beginning in November, Google under the order must allow Android users to download rival app platforms and use competing in-app payment methods, and it cannot pay device makers to preinstall its app store Play."
The ruling comes in response to a case brought by "Fortnite"-maker Epic Games in 2020, alleging Google was unfairly monopolizing in-app payments and distribution in the Google Play store.
The judge's ruling to open the Play store isn't a free-for-all, however. As The Verge writes :
The injunction says that Google can “take reasonable measures” that are “strictly necessary and narrowly tailored” and are “comparable” to how it currently polices the Google Play Store. Google will be able to charge a fee for that policing, too. Epic has repeatedly argued that Google should not be able to deter third-party app stores through policing, so it’s likely Epic and Google will keep butting heads over this.
In a statement following the order , Google argued that the changes "will cause a range of unintended consequences that will harm American consumers, developers and device makers."
Meanwhile, Epic CEO Tim Sweeney called the ruling a "victory" on X , and announced an Epic Games Store coming in 2025 to compete with the Play story "without Google's scare screens and Google's 30% app tax".
Breakup
The second hit to Google came on Tuesday when the DOJ made its recommended remedies to the company's monopolistic search engine business practices. The filing recommends “considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features — including emerging search access points and features, such as artificial intelligence — over rivals or new entrants.” Furthermore, the Justice Department has indicated that splitting up Alphabet is not off the table.
In a response to the DOJ's recommendations, Lee-Anne Mulholland, Google's Vice President of Regulatory Affairs, wrote in a blog post that "the government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness." She also notes that spinning the Chrome (Google's browser) and Android divisions off the company would break them, "change their business models, raise the cost of devices, and undermine Android and Google Play in their robust competition with Apple’s iPhone and App Store."
Verdict
The DOJ has been pursuing this sweeping investigation of Alphabet for 5 years now. That is to say, their monopoly case(s!) clearly have merit. Is that to say that breaking up Alphabet is the best course of action? That's unclear. It's hard to imagine the future of the Internet without a unified Google, but it's possible.
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Tiktok Addiction
Earlier this week, 13 states and the District of Columbia all filed suit independently against social media giant TikTok. The central claim of the cases was that the app-maker explicitly designed the social media platform to be addictive to teens.
“TikTok intentionally targets children because they know kids do not yet have the defenses or capacity to create healthy boundaries around addictive content,” Rob Bonta, Attorney General of California, where TikTok is headquartered, said in statement. “TikTok must be held accountable for the harms it created in taking away the time — and childhoods — of American children.”
Beyond addiction, the suits claim that the heavy usage by teens of the app leads to psychological and emotional harm. Letitia James, Attorney General of New York, singled out so-called "beauty filters" which employ AI to alter a user's face, in a statement: “Beauty filters have been especially harmful to young girls. …Beauty filters can cause body image issues and encourage eating disorders, body dysmorphia, and other health-related problems.”
As NPR adds , in its filing, the District of Columbia also pointed to a kind of content-trapping of teens. The lawsuit claims that these online bubbles “bombard them with precisely the kinds of content that TikTok claims not to allow, including videos about weight-loss, body-image, and self-harm content.”
For its part, TikTok has refuted the claims and said it is proud of the "robust" safeguards it employs to protect teens. In a statement, Alex Haurek, a spokesperson for the company, said TikTok “strongly disagree[s] with these claims, many of which we believe to be inaccurate and misleading. We’re proud of and remain deeply committed to the work we’ve done to protect teens and we will continue to update and improve our product.” As The Verge notes , he added that the social media platform has spent the last two years working with state AGs “and it is incredibly disappointing they have taken this step rather than work with us on constructive solutions to industry-wide challenges.”
The Facebook Parallel
TikTok is not the only social media giant facing these charges. Late last year, 41 states joined together to sue Meta (Facebook's parent company) over many similar claims. The complaint reads in part that “Meta has harnessed powerful and unprecedented technologies to entice, engage, and ultimately ensnare youth and teens. Its motive is profit, and in seeking to maximize its financial gains, Meta has repeatedly misled the public about the substantial dangers of its social media platforms. …It has concealed the ways in which these platforms exploit and manipulate its most vulnerable consumers: teenagers and children.”
Much like TikTok, Meta has decried the litigation in lieu of working with states to solve these issues. "“We’re disappointed that instead of working productively with companies across the industry to create clear, age-appropriate standards for the many apps teens use, the attorneys general have chosen this path,” a statement by the company notes, writes the AP .
Verdict
With the clock ticking until the end of the Biden Administration, the crusade against Silicon Valley waged over the last few years might be in jeopardy. Moreover, as our online lives consume every corner of our culture, this may also be our final chance to build in meaningful laws and regulations.
Rising Rates Confound Clients
$2,500 an hour is not chump change. Even for corporations with the deepest of pockets. Yet, for some top-level attorneys, that rate is becoming common—and may rise more.
According to a report by the Wells Fargo Legal Specialty Group, hourly rates at law firms have risen some 9% for the first quarter of 2024, which is in addition to an 8.3% rise in 2023. The Wall Street Journal notes that rates have only risen historically by 4%.
“The market is driven by the top end. The top firms are spending money to compete for the best rock-star talent. That’s what is driving this,” Alan Tse, chief legal officer at JLL, told the Journal. “Obviously not enough of us are saying no. Clients are part of the problem.”
So what are clients looking to keep their legal costs in check?
"Companies have to do a better job of scrutinizing these increases and seeking alternatives, especially from large firms that are the most aggressive in raising rates," Richard Parr, general counsel of AEG Vision, told Law.com .
"Smaller clients are often forced to accept these rates or find alternatives, while the biggest clients are pushing back with tougher negotiations or by moving more work to smaller firms," adds Ken Callander, a principal at consultancy firm Value Strategies.
But Matthew Lepore, general counsel for BASF, pushes back on this idea of negotiating: “You don’t negotiate with those guys. You aren’t going to bet the company. …Clients aren’t doing as well as the law firms are doing, and it’s not sustainable.”
Salaries
It's not just billable rates that are climbing. The Journal breaks down how some lawyers at the very top end of the industry command salaries higher even than that of Wall Street bankers and consultants. The quote top salaries of $15-$20 million a year, while further down the ladder "many lawyers have seen their pay double in recent years. At the lower end of attorney pay, junior associates at large law firms can start at $250,000 a year. That’s about a 30% jump in five years from the starting salary of $190,000 in 2018."
Verdict
Not all case work requires the top attorneys at the top firms commanding the top rates. Alternatives exist. ALSPs like Lawtrades are full of highly-skilled lawyers and legal professionals ready to take on work at rates far more competitive.