What is Big Tech trying to hide?
Big Tech is acting like it has something to hide.
And that's not helping tech titans argue, in either the courts of law or public opinion, against the idea they have become too big for their own good. If anything, they're helping dig their own graves.
Amazon.com is the latest to face possible sanctions over allegations it improperly withheld tens of thousands of business records—including some unflattering to founder Jeff Bezos—in defending against an action by the Federal Trade Commission.
At Google, a federal judge in San Francisco has ruled the company didn't properly save evidence in a case brought by Epic Games, and its behavior has become a yoke as the Justice Department seeks to break up the search giant after winning two landmark antitrust cases.
A different federal judge recently referred the behavior of Apple to the Justice Department, in part because of alleged efforts to hide documents from legal scrutiny.
Such skulduggery gives new credence to complaints by rivals and regulators that these companies are often leaning into obfuscation as one of the tactics used to protect their kingdoms. In addition, their actions in court seemingly confirm what their many critics contend: that Big Tech needs to be reined in.
Apple, Google and Amazon have all argued in their individual legal battles that they have done nothing wrong. In Amazon's instance, a judge hasn't even ruled on the matter, and the FTC's accusation comes on the heels of Apple's rebuke.
Legal staff carting documents for the 2021 trial in Epic Games' suit against Apple over its app store.
Each company is accused of being overly aggressive in holding back internal documents under special legal standing—known as privilege—that should have, in fact, been turned over to the government or lawyers suing on behalf of Epic. The videogame company has been fighting separate multiyear battles against Apple and Google over its desire to load its app on smartphones outside the tech giants' 30% commission.
'The lawyers are the people who are supposed to be saying no when something crosses a line, and they aren't even failing that duty—they are actively encouraging this stuff," said John Newman, a law professor at the University of Miami and a former FTC deputy director. 'That just seems to have created, or at least contributed to, a culture of what—if they weren't our crown jewel tech companies—I think we would call a culture of lawlessness."
Maybe it isn't surprising the companies can't help themselves in pushing the limits. It is, after all, what has made them so successful as disrupters turned conquerors. In their minds, they are the underdogs, whether they are facing the rise of AI, China or the next Big Thing lurking beyond the horizon.
in addition, these companies' lawyers are fighting to protect the geese that lay their clients' golden eggs. They are trying to shield executives who live in an always-on digital chat and email culture from hurting themselves—and the companies. An unartful, or too truthful, missive can easily become a plaintiff's next smoking gun. Or maybe it's simply sloppiness in a complex legal process that can involve millions of records handed over through third-party contractors.
Still, that doesn't make it right.
Megan Gray chalks up abuse of legal privilege to 'rich privilege." She is an antitrust lawyer who once worked for the FTC and Google's rival DuckDuckGo. She suggests some lawyers might not feel vulnerable for overstepping, especially when the ramifications of getting caught can seem inconsequential.
'Lawyers, especially at these large companies, make so much money—I mean it's just mind-boggling—and when you are making that much money, the worst possible consequences are that you get disbarred," she said.
In Apple's case, U.S. District Judge Yvonne Gonzalez Rogers wrote late last month that about half of the tens of thousands of documents the company claimed were privileged were later downgraded in the midst of extra scrutiny. She concluded it resulted in delay for the legal proceedings and 'that delay equaled profits" for the iPhone maker. (For its part, Apple disagrees and plans to appeal.)
In a recent filing, the FTC made its case for seeking sanctions against Amazon for what it called 'systematic abuse of privilege." It noted that after some probing, the company withdrew 92% of its claims and produced about 70,000 documents that it had previously held back. (A company spokesman responded: 'We are working hard to ensure the FTC has all of the documents well in advance of trial." He added that Amazon is currently litigating how to handle having inadvertently turned over privileged information in another case. 'Mistakes happen in both directions when you are dealing with complex productions of millions of documents on compressed time frames," the spokesman said.)
The FTC's case contends that Amazon knowingly duped millions of customers into unwittingly enrolling in its Prime service.
Documents the FTC pointed to as being improperly withheld include notes from a December 2020 meeting between executives reminiscing about when customers used to have to call to cancel subscriptions. In reference to that practice, one of the executives recalled how Bezos 'used to be chief dark arts officer."
Boxes of documents were brought to federal court in Alexandria, Va., in September as Google faced its second major antitrust trial in less than a year.
During Epic's trial against Google in late 2023, the search giant was taken to task by U.S. District Judge James Donato not just over improper privilege claims but also steps taken to not retain internal chat messages that should have been saved. In a rare move, Alphabet's top lawyer, Kent Walker, a longtime corporate attorney and former assistant U.S. attorney, was called to testify.
Walker told the judge, outside the jury's presence, that he believed the company took its obligations to preserve and produce information in litigation seriously. The judge didn't agree, later calling his old law-school classmate's testimony evasive and 'materially inconsistent" with other witnesses.
'All of this presents the most serious and disturbing evidence I have ever seen in my decade on the bench with respect to a party intentionally suppressing potentially relevant evidence in litigation," the judge said. 'I have just never seen anything this egregious."
To take such heat, I can only imagine how embarrassing those messages must have been.
Write to Tim Higgins at tim.higgins@wsj.com
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