Consumer Protection

Court set closing arguments for May 1-3, 2024, and verdict is expected next year

OAKLAND — California Attorney General Rob Bonta today issued a statement following the conclusion of the 10-week bench trial in United States v. Google, an antitrust case regarding Google's monopoly on general internet search services and search-based advertising: 

"Yesterday, the historic antitrust trial against Google came to an end. My office proudly joined the U.S. Department of Justice in seeking to hold accountable the Mountain View-based company, and I continue to feel confident in the strength of our case," said Attorney General Bonta. "With nearly 90% of searches relying on Google, this Google search case is relevant to almost everyone in country. Among the many revelations that came to light at trial was that Google pays other companies billions of dollars each year to ensure that it is the default search engine for iPhones, Android phones, and most third-party web browsers, such as Mozilla’s Firefox. In 2021 alone, Google paid a whopping $26.3 billion to maintain this monopoly. The California Department of Justice has two additional antitrust cases pending against Google, and we will do everything in our power to protect competition in the marketplace."

BACKGROUND 

On December 11, 2020, then-Attorney General Xavier Becerra announced that California would be joining the U.S. Department of Justice’s lawsuit against Google regarding its monopoly on general internet search services and search-based advertising. This ten-week bench trial in Washington, D.C. began on September 12, 2023 and concluded yesterday. The U.S. District Court for the District of Columbia set closing arguments for May 1-3, 2024. A verdict is expected next year.  

Further, on July 7, 2021, Attorney General Bonta announced a multistate lawsuit against Google for monopolizing the smartphone application market through its Google Play Store in violation of state and federal antitrust laws. This case has a tentative settlement joined by 53 attorneys general. As requested by the U.S. District Court for the Northern District of California in San Francisco, the settlement will be presented to the court after the jury trial in a related case, Epic v. Google, concludes.

Finally, on January 24, 2023, Attorney General Bonta joined the U.S. Department of Justice and eight original states in filing a lawsuit against Google charging the company with operating an unfair monopoly scheme in markets for advertising technology. Seventeen states have now joined this case, which is pending in the rocket docket in the U.S. District Court for the Eastern District of Virginia. 

Starting next year, millions of eligible taxpayers can submit federal and state taxes at no cost 

OAKLAND – California Attorney General Rob Bonta today joined a coalition of 18 attorneys general in submitting a comment letter to U.S. Treasury Secretary Janet Yellen expressing strong support for the Internal Revenue Service’s (IRS) Direct File pilot program. The pilot program will allow eligible taxpayers to file their 2023 federal taxes directly with the IRS for free. Eligible taxpayers in California and three other states — Arizona, Massachusetts, and New York — will also be able to file their 2023 state taxes at no cost using the pilot program. Moreover, eligible taxpayers in nine other states without a state income tax — Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming — may be able to take advantage of the pilot program as well. In their letter, the attorneys general write that their “support for an IRS-run alternative is informed both by our belief in consumer choice and our past experience with the tax preparation industry.” 

“Next year, thanks to the Biden Administration, millions of taxpayers across the country will be able to submit, free of charge, their federal and state taxes,” said Attorney General Bonta. "This first-of-its-kind pilot program is good for taxpayers and it is good for our state and federal government. My fellow attorneys general and I want to make clear that we fully support the IRS’s efforts. It is important that we continue to do everything in our power to remove barriers to filing, which too often results in families missing out on critical tax benefits like the Earned Income Tax Credit.”

According to the IRS, the Direct File pilot program will initially be limited to taxpayers with “relatively simple returns.” For example, in terms of allowable income reporting under the pilot program, the IRS lists the following: W-2 wage income, social security and railroad retirement income, unemployment compensation, and interest of $1500 or less. In terms of allowable credits, the IRS lists the following: Earned Income Tax Credit, Child Tax Credit, and Credit for Other Dependents. More information on the Direct File pilot program can be found here. 

On May 4, 2022, Attorney General Bonta announced, as part of a coalition of 51 attorneys general and with the Los Angeles City Attorney and Santa Clara County Counsel, a $141 million settlement against Intuit. The settlement, which is referenced in the comment letter, resolved allegations that the California-based company deceptively advertised its “free” online TurboTax products. Although 70% of taxpayers qualify for the IRS’s Free File Program — a separate program that is a public-private partnership operated by the IRS, Intuit, and others — less than 3% of taxpayers used it to file their returns in 2020. This abysmal rate was due, at least in part, to tricks and tactics used by Intuit to steer taxpayers away from the IRS Free File Program and to its paid commercial products. A year later, on May 4, 2023, Attorney General Bonta announced that consumers who were tricked by TurboTax’s owner Intuit into paying for free tax services would begin receiving checks related to the settlement.

Signed into law by President Joe Biden on August 22, 2022, the Inflation Reduction Act of 2022 directed the IRS to look into the possibility of creating a free filing option for taxpayers. On May 16, 2023, the IRS submitted a report to Congress explaining that a majority of taxpayers would be interested in using a free IRS-run filing option and that delivering such an option was within the agency’s capabilities.

In submitting the comment letter, Attorney General Bonta joins the attorneys general of Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Vermont, Washington, and the District of Columbia.

A copy of the comment letter can be found here.

OAKLAND — California Attorney General Rob Bonta today issued the following statement in advance of the U.S. Supreme Court hearing oral argument in Rudisill v. McDonough:

“Tomorrow, the U.S. Supreme Court will hear more about a veteran, FBI Agent James R. Rudisill, who is fighting to access his full educational benefits under the GI Bill. Mr. Rudisill has more than earned those benefits. He served multiple tours of duty in Afghanistan and Iraq, was injured, and received the Bronze Star,” said Attorney General Bonta. "Earlier this year, I proudly joined a bipartisan coalition of 42 attorneys general in filing an amicus brief in support of Mr. Rudisill and veterans like him. The United States promises educational benefits to veterans and we need to deliver on that promise. I remain hopeful that Mr. Rudisill will ultimately prevail.”

Background:

On August 22, 2023, Attorney General Bonta and 41 other attorneys general filed the amicus brief in support of Mr. Rudisill in the U.S. Supreme Court. In the amicus brief, the attorneys general: 

• Support Mr. Rudisill’s argument that veterans like him — who served two separate terms of military service that qualify them for both the Montgomery GI Bill and the Post-9/11 GI Bill — are entitled to receive education benefits under both of these GI Bill programs. 
• Explain that states’ veteran citizens rely on federal programs such as the GI Bill to transition successfully back to civilian life, and states in turn rely on the GI Bill and other federal benefits as a complement to the state benefits they provide veterans. Accordingly, the reduced access to GI Bill benefits that would result if the lower court’s decision stands would harm states and their veteran citizens.
• Argue that the lower court’s refusal to apply the "pro-veteran canon" in interpreting GI Bill statutory provisions was in error and such disregard of the canon would prejudice veterans in accessing other benefits to which they are entitled by law. The "pro-veteran canon" instructs courts to interpret any ambiguity in federal laws concerning veterans benefits in favor of veterans.  

Prior to the August 22, 2023 amicus brief on the merits, Attorney General Bonta joined a bipartisan coalition of attorneys general on April 14, 2023 in filing an amicus brief in the U.S. Supreme Court at the cert stage, asking the Court to review the erroneous lower court decision denying Mr. Rudisill 48 months of educational benefits and instead limiting him to only 36 months of education benefits. On June 26, 2023, the U.S. Supreme Court accepted the case. 

OAKLAND — California Attorney General Rob Bonta and three other attorneys general today announced joining the U.S. Department of Justice’s (U.S. DOJ) lawsuit against Agri Stats, Inc. (Agri Stats), a company that organizes and manages anticompetitive information exchanges for meat processors across the United States. Filed in the U.S. District Court for the District of Minnesota, the amended complaint alleges that Agri Stats generates weekly and monthly reports with thousands of competitively sensitive data points for subscribing broiler chicken, pork, and turkey meat processors. Agri Stats’ reports, according to the amended complaint, are used by the meat processors to engage in a coordinated effort to increase prices and reduce output, violating federal antitrust law.

“Because of Agri Stats’ anticompetitive business practices, Californians have been paying more for chicken, pork, and turkey meat than they otherwise would have. Agriculture markets are a lifeblood of the California economy and the cost of putting dinner on the table matters to every family in this state,” said Attorney General Bonta. “In a fair and competitive economy, meat processors should be vigorously competing with one another — not effectively colluding behind closed doors. I look forward to continuing to work with the U.S. Department of Justice and our sister states to ensure that Agri Stats is held accountable.”

U.S. DOJ filed its original complaint against Agri Stats on September 28, 2023. With today’s amended complaint, the attorneys general are joining U.S. DOJ's effort to end Agri Stats’ anticompetitive conduct. Together, the attorneys general and U.S. DOJ allege that Agri Stats violated Section 1 of the Sherman Act. Participating meat processors have accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the United States.

In the amended complaint, the attorneys general underscore that:

• Agri Stats’ information-sharing scheme hurts competition. Specifically, as part of Agri Stats’ “give to get” policy, subscribing meat processors share information about all aspects of their businesses with Agri Stats, including current costs, output, and prices. In exchange, Agri Stats audits and converts that information to common metrics that it distributes to subscribing meat processors in the form of weekly and monthly reports. Those reports enable meat processors to increase prices on items priced below their competitors with greater confidence that they will not lose sales to lower priced rivals. Meat processors pay Agri Stats millions of dollars for the reports.
• Agri Stats also goes a step further and tells subscribing meat processors how to use the weekly and monthly reports to weaken competition. Indeed, executives at some of the country’s largest meat processors testified that they could not recall any examples in which their companies used Agri Stats information to lower their sales prices to gain market share.
• Agri Stats refuses to sell the weekly and monthly reports to meat purchasers, farmers, workers, or consumers, thereby strengthening the advantage that subscribing meat processors gain by sharing information only with one another.

In filing today’s amended complaint, Attorney General Bonta joins the attorneys general of Minnesota, North Carolina, and Tennessee. 

A copy of the amended complaint is available here.

OAKLAND — California Attorney General Rob Bonta today issued a statement on the first day of trial in the federal lawsuit challenging JetBlue Airways' proposed $3.8 billion acquisition of Spirit Airlines. Led by the U.S. Department of Justice (U.S. DOJ), the suit before the U.S. District Court for the District of Massachusetts alleges that the proposed merger violates the Clayton Act because it may substantially lessen competition. Attorney General Bonta announced joining U.S. DOJ's lawsuit on March 31, 2023. 

“The proposed JetBlue-Spirit merger is a bad deal for consumers. If it goes through, tens of millions of travelers across the country — including Californians, particularly on the Los Angeles to Miami route — will face higher fares and fewer options,” said Attorney General Bonta. "Consolidation in the airline industry is a serious concern of mine and I couldn't be prouder that my office, alongside the U.S. Department of Justice and six other attorneys general, is in court today fighting for a fair and competitive economy." 

The attorneys general of California, the District of Columbia, Massachusetts, Maryland, New Jersey, New York, and North Carolina have partnered with U.S. DOJ to challenge the proposed merger of JetBlue and Spirit. 

This lawsuit is the second antitrust lawsuit filed against JetBlue in recent years. On September 21, 2021, Attorney General Bonta joined U.S. DOJ and six other attorneys general in filing a lawsuit against JetBlue and American Airlines challenging an anticompetitive joint venture between the companies known as the Northeast Alliance. On July 28, 2023, the U.S. District Court for the District of Massachusetts issued a final permanent injunction that officially ended the Northeast Alliance. JetBlue has abandoned the agreement completely. American Airlines has appealed the decision and the California Department of Justice will be prosecuting that appeal with U.S. DOJ.

OAKLAND — California Attorney General Rob Bonta today issued a statement in response to Senate Bill 478 (SB 478), a bill that he co-sponsored with the California Low-Income Consumer Coalition, being signed into law by Governor Gavin Newsom. Coauthored by Senator Bill Dodd (D-Napa) and Senator Nancy Skinner (D-Berkeley), the legislation will prohibit hidden fees (also called ‘junk fees’) in California beginning on July 1, 2024. Hidden fees are fees in which a seller uses an artificially low headline price to attract a customer and usually either discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.

“Today, California is eliminating hidden fees,” said Attorney General Rob Bonta. “These deceptive fees prevent us from knowing how much we will be charged at the outset. They are bad for consumers and bad for competition. They cost Americans tens of billions of dollars each year. They hit families who are just trying to make ends meet the hardest. And, because a growing list of websites, apps, and brick-and-mortar businesses are using them, they penalize companies that are upfront and transparent with their prices. With the signing of SB 478, California now has the most effective piece of legislation in the nation to tackle this problem. The price Californians see will be the price they pay. I am deeply grateful to Senators Dodd and Skinner, the authors of SB 478, for their commitment to protecting consumers.”

“With the governor’s signing of this historic bill, we can finally take aim at dishonest junk fees that are tacked onto seemingly everything – from online concert tickets to hotel reservations,” said Senator Bill Dodd. “Now we can put the consumer first and create a level playing field for those businesses that advertise the real price, up front. I appreciate everyone who worked to end these dishonest charges that boost corporate profits at the expense of those who can least afford it.”

“California sent a clear message today: The days of bait-and-switch pricing practices are over,” said Senator Nancy Skinner. “With Gov. Newsom’s signing of SB 478, Californians will know up front how much they’re being asked to pay, and no longer be surprised by hidden junk fees when buying a concert or sports ticket or booking hotel rooms for their family vacation.” 

After announcing that he was sponsoring SB 478 in February 2023, Attorney General Bonta urged the California Legislature to approve the legislation in March 2023, heeding the call from the Biden-Harris Administration and the Consumer Financial Protection Bureau for states to better address the nationwide concern of hidden fees. In May 2023, he held a press conference in San Diego to highlight the bill’s importance. 

Deceptive price advertising is a significant problem facing consumers that appears to be proliferating in more and more sectors of the economy. Hidden required fees are now charged for a variety of goods and services, such as lodging, tickets for live events, and restaurants and food delivery. These fees, when mandatory, are a deceptive way of hiding the true price of a good or service. 

The text of the legislation is available here. 

OAKLAND – California Attorney General Rob Bonta today released the following statement in response to the U.S. Supreme Court hearing oral argument in Consumer Financial Protection Bureau (CFPB) v. Community Financial Services Association of America (CFSA):

“There are many important cases before the U.S. Supreme Court this term. One of those cases threatens the very existence of the CFPB, and the justices heard oral argument on it this morning. From going after predatory lenders to addressing misconduct in the financial markets, the CFPB has been a tremendously important partner to the states in our work to protect Californians and consumers all across the country. It is no understatement to say that the stakes are enormous." 

Background:

On May 16, 2023, Attorney General Bonta announced joining a coalition of 24 attorneys general in filing an amicus brief in the U.S. Supreme Court in support of the CFPB. In their amicus brief, the attorneys general support the CFPB’s contention that the agency’s funding structure is constitutional and argue that the court should not invalidate the CFPB’s past and ongoing regulatory and enforcement actions even if it determines that the agency’s current funding structure is not constitutional.

OAKLAND – California Attorney General Rob Bonta today issued the following statement in support of the Federal Trade Commission’s (FTC) federal lawsuit against Amazon, which follows the suit he brought in state court on behalf of Californians over a year ago:

“The Biden-Harris Administration has taken numerous actions to protect competition in the marketplace and lower costs for consumers. Today’s lawsuit by the FTC and 17 states against Amazon is a continuation of those important efforts. I welcome the FTC and sister states to this fight against Amazon. Misuse of monopoly power on the backs of consumers and workers deserves no place in our economy.” 

Background on Attorney General Bonta’s Amazon Lawsuit:

• On September 14, 2022, Attorney General Bonta announced filing a lawsuit against Amazon in the Superior Court of California, County of San Francisco. The complaint alleges that Amazon violated California’s Unfair Competition Law and Cartwright Act by requiring merchants to enter into agreements that severely penalize them if their products are offered for a lower price off-Amazon.
• On March 30, 2023, Attorney General Bonta secured a favorable court ruling, which blocked Amazon's request that California's lawsuit against the company be dismissed.
• On April 14, 2023, Attorney General Bonta announced that the Superior Court decided to unredact portions of California's complaint, revealing additional evidence that Amazon is blocking price competition in violation of state antitrust laws.
• Trial in California’s case is currently set for 2026.

LOS ANGELES — California Attorney General Rob Bonta today announced the sentencing of Don Azul, 39, of Los Angeles in connection with a years-long scheme he perpetrated against relatives of veterans as well as the University of California (UC) and California State University (CSU) systems. Posing as an authorized “contractor” for the California Department of Veterans Affairs (CalVet), Azul was alleged to have defrauded more than 40 families throughout California — with a grandparent or other family member who served in the armed forces — into paying at least $500 each for counterfeit CalVet College Fee Waivers. The waivers are a free benefit provided by the State of California that waive tuition and fees at any UC, CSU, or California community college campus for certain eligible students, including children of a military veteran with a 100% service-connected disability. As part of a plea deal, Azul has agreed to serve three years and four months in state prison and has been ordered by the Los Angeles Superior Court to pay over $450,000 in restitution.

“Fraudsters and bad actors seeking to exploit our military service members and their families will be held accountable. Today makes that clear,” said Attorney General Bonta. “As California’s chief law enforcement officer, I will continue doing everything in my power to ensure that those who put their lives on the line for our country, or their families, are not preyed upon.”

The California Department of Justice (CA DOJ) thanks the University of California, California State University, and the California Department of Veterans Affairs for their assistance in this case, and for the actions they have taken to prevent future fraud against the CalVet college fee waiver program. CA DOJ also thanks the Veterans Affairs Office of Inspector General and the police departments of several universities — specifically of the University of California, Santa Cruz; Sonoma State University; California State University, Long Beach; and California State University, San Marcos — for serving as part of the interagency team that investigated this case and brought it to a successful conclusion.   

Azul pleaded no contest to seven felony counts: three counts of grand theft, two counts of forging a government seal, one count of forgery by false document, and one count of unauthorized use of personal identifying information. He also admitted to violating Penal Code 186.11(a)(2), the aggravated white collar enhancement for causing a loss of over $500,000. 

Azul’s arrest was announced on August 12, 2022. He was alleged to have approached military families, lied to them about their eligibility for the CalVet College Fee waiver, and purported to approve them for the fee waiver. After providing these families with fraudulent waiver letters, Azul then instructed the families to present the letters to the schools. Not realizing the letters were counterfeit, school officials accepted the letters and waived the students’ tuition. The amount of tuition waived varied from approximately $5,800 per school year at CSUs to approximately $12,000 per year at UCs. In total, the scheme resulted in the theft of at least $30,000 from the relatives of veterans and over $500,000, in public funds from approximately 23 universities in the form of waived tuition.

Attorney General Bonta is committed to protecting service members, veterans, and their families. On September 1, 2023, he announced a settlement with The Money Source, Inc., resolving allegations that the company failed to properly process, and timely grant, mortgage deferment requests made by California military reservists called to active duty. On August 22, 2023, he announced filing an amicus brief in the U.S. Supreme Court in support of a U.S. veteran’s attempt to access the full 48 months of educational benefits under the GI Bill that he had earned through his service as both an Army officer and an enlisted soldier. On August 9, 2023, he sent a letter to Congress expressing his support for bipartisan federal legislation that aims to protect veterans from financial exploitation. On August 4, 2023, he reminded California veterans who were exposed to dangerous toxins in the course of their service to submit a claim for U.S. Department of Veterans Affairs benefits, or notify the VA of their intent to file to obtain benefits under the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxics (PACT) Act. On July 26, 2023, he joined a bipartisan coalition of 24 attorneys general in submitting a letter to Congress in support of H.R. 1255, the Sgt. Isaac Woodard, Jr. and Sgt. Joseph H. Maddox GI Bill Restoration Act of 2023.

A copy of the criminal complaint is available here.

OAKLAND — California Attorney General Rob Bonta today announced a $93 million settlement with Google resolving allegations that its location-privacy practices violated California consumer protection laws. The settlement follows a multi-year investigation by the California Department of Justice that determined Google was deceiving users by collecting, storing, and using their location data for consumer profiling and advertising purposes without informed consent. In addition to paying $93 million, Google has agreed to accept strong injunctive terms to deter future misconduct. 

“Our investigation revealed that Google was telling its users one thing – that it would no longer track their location once they opted out – but doing the opposite and continuing to track its users’ movements for its own commercial gain. That’s unacceptable, and we’re holding Google accountable with today’s settlement,” said Attorney General Bonta. “I want to thank my Consumer Protection Section for their work on this matter and for securing important privacy safeguards on behalf of all Californians.”

Based in Mountain View, California, Google generates the majority of its revenue from advertising, and location-based advertising (or geotargeted advertising) is a critical feature of Google’s advertising platform because advertisers want the ability to market to users based on their geographical locations. Google also uses their location data to build behavioral profiles of users to help determine which ads to serve users. 

In a complaint filed with the proposed stipulated judgment, Attorney General Bonta alleges that Google deceived users in numerous ways regarding how it collected, stored, and used a person’s location data. For example, the complaint alleges that Google falsely told users that if they turned off the “Location History” setting, then Google would not store their location data. However, according to the complaint, even when a user turned Location History off, Google continued to collect and store that user’s location data through other sources. The complaint also alleges that Google deceived users about their ability to opt out of advertisements targeted to their location. 

Under the settlement, Google must pay the state $93 million and be subject to a number of injunctive terms that will protect the privacy interests of California users, including requirements that Google:

• Show additional information to users when enabling location-related account settings.
• Provide more transparency about location tracking.
• Provide users with detailed information about the location data that Google collects and how it is used through a “Location Technologies” webpage.
• Disclose to users that their location information may be used for ads personalization.
• Disclose to users before using Location History data to build ad targeting profiles for users.
• Obtain review by Google’s internal Privacy Working Group and document approval for all material changes to location-setting and ads personalization disclosures that will have a material impact on privacy. 

A copy of the complaint and proposed stipulated judgment, which details the aforementioned settlement terms and remains subject to court approval, can be found here and here.