In landmark Google ruling, a warning to companies about preserving evidence

By Mike Scarcella

(Reuters) - A landmark ruling on Monday that Alphabet's Google illegally monopolizes Web search also came with a rebuke for the tech giant for obscuring potential evidence in the case, and a warning to other companies about safeguarding data.

U.S. District Judge Amit Mehta in Washington, D.C., lambasted Google for allegedly failing to preserve internal chats and abusing protections for legal communications, but he declined to formally sanction the company. 

The U.S. Justice Department had asked Mehta to punish Google for what the government called its “systematic destruction” of employee messages and “flagrant misuse” of the attorney-client privilege that shields communications with lawyers.

Mehta said it was not necessary to rule on Google's evidence handling to decide whether the company violated antitrust law.

“Still, the court is taken aback by the lengths to which Google goes to avoid creating a paper trail for regulators and litigants,” Mehta wrote. Google “trained its employees, rather effectively, not to create ‘bad’ evidence,” he said. 

Google and the Justice Department declined to comment on Mehta’s decision not to sanction Google over its evidence safeguards. Google has denied violating antitrust law and said on Monday it will appeal the court's ruling. It has also denied mishandling evidence.

Google had a longstanding practice of automatically deleting employees' chat messages after 24 hours unless the person clicked a “history on” button to preserve them. It changed the policy last year to better safeguard chats. 

Mehta also criticized the company about its “communicate with care” initiative, which involved Google employees adding lawyers to messages and marking them “attorney/client privileged.”

The fight over Google’s chat records has extended into other cases challenging the tech company’s business practices.

A federal judge in California last year ruled that Google “willfully” failed to keep relevant chat evidence in a lawsuit filed by “Fortnite” maker Epic Games.

Epic prevailed at that trial, which accused Google of overly controlling the Android app market.

Later this month, a federal judge in Virginia will hear arguments about evidence destruction in the Justice Department’s lawsuit against Google over its digital advertising practices. A non-jury trial is scheduled for next month.

Mehta said his decision to not sanction Google was not an exoneration.

“Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril,” Mehta wrote. “Google avoided sanctions in this case. It may not be so lucky in the next one.”

(Reporting by Mike Scarcella in Washington; Editing by David Bario and Matthew Lewis)