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Court Green Lights Ohio AG’s Case to Declare Google a “Common Carrier”

Posted  June 2, 2022
By J. Wyatt Fore

Is Google Search a “common carrier” under Ohio law that is barred from prioritizing Google’s own products? Under a state court ruling last week, the answer to that question has gotten closer to yes.

Ohio Attorney General Dave Yost (R) is suing to restrain Google from prioritizing Google products in its search engine results.  If successful, the lawsuit—which has now survived a motion to dismiss—could substantially shake up tech business models.

For example, a Google Search query often returns results from other Google products; searching an address might return a top-ranked result from Google Maps.  However, Yost’s case seeks to prohibit Google from this kind of ‘self-preferencing.’  And, as many other states have analogous common carrier designations, similar state litigation may be just beginning, creating more headaches for digital platforms.

Common Carriage vs. Antitrust

Unlike most firms, common carriers are required to provide their services in a non-discriminatory way.  Many reasons animate this requirement.

One main reason is simple fairness—if a company holds itself out as an impartial provider of services to the general public, it should have to serve all comers.  Similarly, some common carriers (like railroads) are critical for small players to access the market—and so nondiscrimination allows the ‘little guy’ to access the same terms as big firms.  Moreover, there are concerns about competition—because a common carrier often occupies a chokepoint, it can leverage that market power to warp competition in adjacent markets.  For example, AT&T pre-breakup was accused of leveraging its monopoly in the telephone network by prohibiting competing device manufacturers from interconnection.  Thus, AT&T effectively forced its customers to buy AT&T products, like telephones, from its subsidiary Western Electric.

In contrast, self-preferencing rarely violates the antitrust laws.  However, one exception is when self-preferencing supports illegal monopolization.  For example, when AT&T repeatedly refused mandates to interconnect, the U.S. Department of Justice brought an antitrust suit against the company, which led to its breakup under a consent decree.

Currently, government antitrust enforcers are litigating two cases challenging Google’s self-preferencing with respect to advertising and Search as anticompetitive abuses of monopoly power.  Although we do not take a position on the merits, the enforcers will have high hurdles to overcome.  That’s because unlike “fairness” concerns animating common carriage law, current antitrust doctrine is focused on economic effects.  As a result, to succeed, the plaintiffs will have to show not that Google’s conduct is unfair but rather that it is exclusionary and harmed competition.

Court: Google Search Could Be a Common Carrier, but Not a Public Utility

In the Yost Complaint, Ohio sought to declare Google Search both as a “common carrier” and as a “public utility.” But although the Court allowed the common carrier case to proceed, it dismissed the public utility claim.  Unfortunately for Google, this partial dismissal preserved the crux of the Complaint.

The Ohio Court proceeded from the premise that under Ohio law, a common carrier is “one who undertakes for hire to transport persons or property, and holds itself out to the public as ready and willing to serve the public indifferently and impartially to the limit of its capacity.” Order at 7 (citing Celina & Mercer Cty. Tel. Co. v. Union Ctr. Mut. Tel. Assn, 102 Ohio St. 487, 492 (1921)).  In the words of the court, in the “internet age, information is often as valuable as goods.” Id.  Applying this principle, the Court found the State’s novel argument that Google “carries information” to be sufficient to survive Google’s motion to dismiss   Id. at 8.  The Court also concluded that Google’s stated mission to “organize the world’s information and make it universally accessible and usable” could satisfy the requirement that a common carrier holds itself out to the serve the public.  Id. at 7 (citing Compl. ¶13).

Treating Google Search as a common carrier may seem counterintuitive to a modern audience, which may think of railroads, ferries, or airlines.  But the Court reasoned that common carriage is not so limited—historically, many professions, like doctors, had common carriage obligations under Ohio law.  Further, courts have found parking garage escalators, office building elevators, air ambulances, taxis, and luxury limousines to be common carriers.  Id. at 9-10.

Does Google Really Have a Nondiscrimination Obligation under Ohio Law?

All parties recognize that the “case [is] unprecedented.” Id. at 20.  And here the Court has not determined that Google Search is a common carrier—yet.  Rather the case proceeds to discovery to allow the State to “develop its case, and present evidence to support its claim.” 21.

Regardless of how the court ultimately rules, it’s clear that litigation, including appeals, will continue in Ohio for years.  And if Attorney General Yost’s claims receive any traction, one should expect similar suits in other states against other major digital platforms.  If the “net neutrality” debate over applying common carriage to more “traditional” internet infrastructure (ISPs) is any guide, the controversy will be long and well-litigated, occurring at both the federal and state levels.

Already, even the limited litigation around digital platforms and common carriage has not been consistent.  For example, on May 23, 2022, the Eleventh Circuit made a preliminary determination that social media companies, including Google’s YouTube, were not common carriers.  See Order at 40-41.  Because the Eleventh Circuit and Ohio cases address state laws, one prominent commentator has alluded to possible federal preemption to resolve any patchwork that arises.

Further, if Ohio successfully declares Google Search to be a common carrier, it’s unclear what sort of specific obligations would arise.  As one commentator noted, because Google by definition must discriminate among information to determine what results to present in response to a query, strict rules may “not [be] logically possible.”  A version of this problem is almost always present—which is why many common carrier laws actually prohibit unreasonable or unjust discrimination rather than just “discrimination.”  Updating this principle for digital markets may be easier said than done—prohibiting Google from discriminating between its own offerings and competitors’ services may be a nice idea, but that’s “not common carriage.”  Thus, at least some prominent public-interest liberals have opined that common carriage is an inappropriate framework for digital platforms like Google.  The complicated political crosswinds of digital regulation have created strange bedfellows.

As a result, no matter how the Ohio lawsuit shakes out, the debate over digital platforms and common carriage is likely just beginning.

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Written by J. Wyatt Fore

Edited by Gary J. Malone