Judge Partially Dismisses Investor Suit Against Google Over Ad Practices

Alphabet’s Google successfully convinced a federal judge in San Francisco to dismiss part of a lawsuit accusing the company of misleading investors regarding its digital advertising practices and user privacy protections, according to Reuters. The ruling, issued on Monday by U.S. District Judge Rita Lin, found that shareholders did not provide sufficient evidence that Google made false statements on its website concerning these issues.

Per Reuters, the lawsuit, filed in 2023, alleged that Google manipulated online advertising in its favor through preferential bidding for Google-owned platforms and a network agreement with Meta’s Facebook. Investors argued that Google’s public statements misrepresented the competitive nature of its ad market and auction-based advertising system.

However, Judge Lin determined that the plaintiffs had not established that Google acted with the necessary “state of mind” to commit securities fraud in certain statements. She further noted that a company does not automatically engage in securities fraud whenever a significant inaccuracy appears on its website, even if it contradicts facts known to the CEO.

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Despite the partial dismissal, shareholders will be allowed to proceed with their claim that a 2020 written statement made by Alphabet CEO Sundar Pichai to Congress was false, per Reuters.

The judge rejected the argument that Pichai’s role as CEO made him responsible for every statement on Google’s website, clarifying that such an assertion does not align with the law.

In response to the lawsuit, Google has denied any wrongdoing. In a statement on Tuesday, the company asserted that it “runs a fair first-price auction, no matter where the bid comes from.” The tech giant continues to face multiple legal challenges regarding its digital advertising practices, including a separate case led by the U.S. Department of Justice and several states, which went to trial in Virginia last year. A ruling in that case is still pending.

The lawsuit is officially filed as AMI – Government Employees Provident Fund Management Company v. Alphabet Inc. et al in the U.S. District Court for the Northern District of California, under case number 3:23-CV-01186-RFL.

Source: Reuters