Monopoly Power in the Relevant Market
The court weighs the Brown Shoe factors to determine whether a relevant market exists: (1) industry or public recognition of the submarket as a separate economic entity, (2) the product’s peculiar characteristics and uses, (3) unique production facilities, (4) distinct customers, (5) distinct prices, (6) sensitivity to price changes, and (7) specialized vendors.
To determine whether monopoly power exists, the court analyzes two types of evidence under Microsoft: (1) direct evidence indicating that a firm can substantially raise prices above the competitive level, and (2) indirect (or structural) evidence permitting the court to infer monopoly power from a firm’s possession of a dominant share of a relevant market that is protected by entry barriers.
After undergoing these two analyses, the court found that Google has monopoly power in the markets for General Search Services and General Search Text Advertising. General Search Services refers to search engines that query the entire World Wide Web, as opposed to social media platforms where search is restricted to the platform itself. General Search Text Advertising refers primarily to the sponsored results that appear first when one uses Google to search the web.
The Willful Acquisition or Maintenance of That Power
A monopoly by itself does not violate the Sherman Act; Google must have engaged in exclusionary conduct in the General Search Services and General Search Text Advertising markets. Further, for Google to be liable, the anticompetitive effects of the exclusionary contracts must outweigh any procompetitive benefit.
In the market for General Search Services, the court found that Google’s exclusive contracts cause anticompetitive effects by depriving rival search engines of scale and reducing their incentive to innovate. The court pointed out that this effect is also evidenced by the lack of successful entrants to the market. Predictably, results in the General Search Text Advertising market are quite similar, as it exists downstream of the anticompetitive effects in General Search Services. There, the court showed that Google’s exclusive contracts foreclose a substantial share of the market, allow Google to profitably charge supracompetitive prices for Text Advertisements, allow Google to degrade the quality of its Text Advertisements, and cap rivals’ advertising revenue.
Update: Illinois Amends Biometric Information Privacy Act
By Alan S. Wernick, Esq.
On August 2, 2024, Illinois Governor J.B. Pritzker signed into law amendments (IL SB 2979) to the Illinois Biometric Privacy Act (“BIPA”). These BIPA amendments became law effective immediately. Alleged violations under BIPA, which became effective in 2008, have resulted in numerous lawsuits and defendants’ (businesses’) liability for substantial damages.
The BIPA amendments in SB 2979 include limits on BIPA damages and provide for electronic consent. Key changes include:
- A private entity that collects or discloses a person’s biometric data without consent can only be found liable for one BIPA violation per person regardless of the number of times the private entity disclosed, redisclosed, or otherwise disseminated the same biometric identifier or biometric information of the same person to the same recipient. 740 ILCS 14/20(b) and (c) modify the 740 ILCS 14/20(a) text “A prevailing party may recover for each violation . . . ,” which was interpreted by the courts as a “per scan” damages calculation.
- Written consent for collection of biometric information will now include electronic signatures. 740 ILCS 14/10 (Definitions) as amended adds a new definition: “electronic signature” and includes it as part of a “written release.” This amendment highlights businesses’ need to review their contracts with vendors providing biometric devices. The review should include, among other things, clarity of functional specifications, plus vendor warranties and indemnifications, concerning the biometric device’s abilities to capture, record, and preserve, electronic signatures.
It is important to note that although the recent amendments place new limits on BIPA damages, they do not eliminate all liabilities for violations under BIPA. Hypothetically, a business with a large number of employees or customers could still be liable for substantial damages. For example, if a business with 1,000 employees or customers for whom they collected biometric data was found to have intentionally or recklessly violated BIPA and is subject to liquidated damages of $5,000 or actual damages, then damages could be $5,000,000 (=$5,000 x 1,000) plus reasonable attorneys’ fees and costs. Of course, this would be subject to the facts and the applicable law, but even with these BIPA amendments, BIPA violations can still result in substantial damages.
The bottom line is that the courts and the legislature will continue to have to address the tension between the 2008 Illinois legislative findings underlying BIPA and potentially excessive BIPA damages awards. This analysis should consider evolving artificial intelligence (“AI”) software’s potential to provide humanity with many benefits, but also risks, and AI’s use of biometric data (and ability to copy that biometric data). Legislators and the courts will need to consider the opportunities and risks these, and other, technologies present to society, and strive to achieve a judicial and legislative balance that will maximize the beneficial opportunities of these technologies, and contain, mitigate, or remove the risks.
