In a ruling on Monday, US District Judge Rita Lin said the shareholders in their proposed class action did not adequately support their claim Google made false statements on its website about its practices.
Lin said the plaintiffs could move ahead with their claim that a 2020 written statement that Alphabet chief executive officer Sundar Pichai made to Congress was false.
The shareholders, who sued Google in 2023, contend Google had rigged online advertising to favor bids from Google-owned platforms or through a network agreement that Meta’s Facebook had with Google.
The lawsuit alleged Google committed securities fraud through public statements that characterized the ad market and its auction-based system for selling ads as highly competitive.
Lawyers for the plaintiffs did not immediately respond to a request for comment.
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Google in a statement on Tuesday said it “runs a fair first-price auction, no matter where the bid comes from.” The company has denied any wrongdoing. Monday’s order said the investors had not proven Google acted with the necessary “state of mind” in some statements.
Lin said a company does not commit securities fraud “every time there is a significant error somewhere on its website that is inconsistent with facts known to the CEO.”
“Under plaintiffs’ theory, Pichai’s role as CEO makes him the de facto ‘maker’ of every single statement on Google’s website. This is not the law,” Lin wrote.
Google is defending against other lawsuits challenging its digital advertising practices.
A U.S. judge in Virginia presided over a trial last year in a case brought by the U.S. Department of Justice and a group of states, but has not yet ruled. Google has denied the allegations.
The case is AMI – Government Employees Provident Fund Management Company v. Alphabet Inc. et al, U.S. District Court, Northern District of California, No. 3:23-CV-01186-RFL.
For plaintiffs: Jeremy Lieberman and Emma Gilmore of Pomerantz
For defendants: Boris Feldman and Doru Gavril of Freshfields
