Since August 2020, Google has been defending itself against multiple antitrust lawsuits challenging Google’s Play Store practices as anticompetitive. Nearly two and a half years later, Google is now facing another legal battle — discovery sanctions. In March 2023, the U.S. District Court for the Northern District of California found that Google violated Federal Rule of Procedure 37(e) by failing to preserve internal Google chat messages relevant to the litigation. Google is looking at millions of dollars in possible financial penalties as well as potential adverse inferences as a result of its failure to preserve this data.

This discovery battle has been brewing for some time. When the litigation first began, Google issued a litigation hold notice to relevant employees. As part of the notice, employees were directed not to discuss information relevant to litigation on Google’s internal messaging service known as “Chat.” If the information relevant to the litigation was discussed on Chat, employees were required to preserve the conversation. However, Google left it to the employees’ discretion to determine whether Chat messages were relevant and should be saved. And, importantly, Google never turned off the 24-hour auto delete function. Unfortunately for Google, many flagged employees either misidentified Chat messages as relevant or refused to comply with the hold notice. Thousands of messages containing likely relevant information were permanently deleted.

The district court found that Google’s actions failed to live up to its duty to preserve relevant evidence. The court also questioned Google’s candor with the court. Specifically, Google had “falsely assured the Court … ‘that it had taken appropriate steps to preserve all evidence relevant to the issues reasonably evident in this [case].’” In re Google Play Store Antitrust Litig, No. 21-MD-02981-JD, 2023 WL 2673109, at *8 (ND Cal, March 28, 2023).

The court was also troubled that Google only disclosed its failure to preserve the Chat messages months after first discovering the error. Finally, the court was troubled by the different ways Google handled emails (which were all preserved) and Chats (which were not preserved). Accordingly, the judge ordered Google to pay plaintiffs’ reasonable attorneys' fees and costs incurred in bringing the Rule 37 motion. Although the court has not yet approved the requested amount, plaintiffs have requested more than three million dollars. Additionally, Google could face non-monetary sanctions, including an adverse inference that the information contained in the deleted Chat messages was unfavorable.

This case is a stark reminder of the importance of preservation of documents in litigation. There are several steps parties can take before litigation arises to help reduce the chance for sanctions in any litigation.

1. Undertake an eDiscovery audit — determine where your information is located and how to find it when needed.
2. Review your policy for the use of internal messaging/chat services and enforce that policy. If client work is not to be discussed over the chat service, are you checking for compliance?
3. Have a plan for how to respond to subpoenas and document requests. If litigation ensues, know who to contact to make sure litigation hold notices are sent to all necessary parties and auto deletes are turned off.

Warner Summer Associate Samuel Hauke contributed to this eAlert.