Here’s a telling example of how organizations sometimes try to avoid litigation by pursuing negotiation with their counterparts. Faced with antitrust scrutiny, Google has long embraced a guiding principle for dispute resolution: “Don’t litigate, negotiate,” according to reporting by the Wall Street Journal.
For years, U.S. and European regulators accused Google of abusing its dominance in online search by favoring its own services—most notably Google Shopping—over those of competitors. Rival comparison sites, such as Nextag, complained that Google routinely pushed their listings far below its own results, making them less visible to consumers.
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Negotiation Case Studies: Google and the FTC
In 2014, Google avoided formal charges from the Federal Trade Commission by agreeing to make limited changes to its search practices. That February, the company reached a related settlement with European Commission regulators. Under the agreement, Google promised to reserve prominent space on its European search pages for competitors’ offerings, though competitors would have to pay for placement. These rival results would be shaded and labeled as “alternatives.”
The deal allowed Google to sidestep a formal antitrust ruling and a potential fine of up to 10% of its global annual revenue, which stood at $59.8 billion in 2013, according to the Journal. Not surprisingly, competitors including Microsoft and Nokia argued that the concessions did not go far enough.
The contrast with Microsoft’s earlier approach was striking. Rather than negotiating, Microsoft spent more than a decade fighting European antitrust charges in court, a strategy that ultimately cost the company more than $2.5 billion in fines.
During the European investigation, Google took a markedly different tack. Over roughly three years, the company worked closely with regulators, even flying engineers to Brussels to walk officials through the technical details of its products. After two tentative agreements collapsed under public criticism, Google returned with what the Journal described as “slightly sweetened deals.” Both sides, by their own accounts, were motivated by a shared desire to avoid a prolonged and costly court battle.
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Given the high costs and risks of litigation, it usually pays for parties engaged in dispute resolution to try hard to reach a settlement before taking their dispute to court, according to Harvard Law School professor Robert H. Mnookin.
Here are five strategies from Mnookin to help you and your lawyers turn disputes into deals:
Dispute Resolution Strategy 1: Explore the possibility of engaging in a formal dispute-resolution process such as mediation before going to court.
Dispute Resolution Strategy 2: Identify and express your myriad interests in the dispute, including those that are not financial, and encourage the other side to do the same.
For example, if you feel wronged, you might ask for a formal apology or evidence that the other party is taking steps to correct its mistakes.
Dispute Resolution Strategy 3: Ask your lawyers to systematically predict the outcome of a possible court case through decision-analysis tools such as decision trees.
Such analyses often make it crystal clear that a negotiated settlement would be a far less risky and costly option for dispute resolution.
Dispute Resolution Strategy 4: Open up to your lawyer about all of your interests and concerns, including those that are personal and emotional.
Too often, clients allow their lawyers to focus exclusively on financial claims—and unwittingly narrow the possibilities for a negotiated settlement.
Dispute Resolution Strategy 5: Align your interests with your lawyer’s through the use of ultimatums and incentives.
For example, you might promise your lawyer a financial bonus if she settles the case in a timely manner.
Which dispute resolution strategies did you find helpful? Leave a comment.
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Discover how to improve your dispute resolution skills in this free report, Dispute Resolution: Working Together Toward Conflict Resolution on the Job and at Home, from Harvard Law School.
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Dealmaking: 5 Tips for Closing the Deal – Five negotiation tips for sealing the deal at the negotiation table.
How Case Studies Facilitate Negotiated Agreements – An examination of the impact of case studies on forging negotiated agreements.
Dealmaking: Before You Sign on the Dotted Line
New Book Series: Breakthrough International Negotiation
Originally published in 2014.
I have been a mediator for 12 yrs and conducted over 2100 mediations and mediated for over 7,000 hours. I absolutely agree with the 5 strategies. Many times, lawyers look past logic and reason and simply look to the finances. It’s a shame, but lawyers generally get paid the longer a dispute goes. Everything can be negotiated if the underlying reasons behind the dispute can be exposed and addressed. It is important that the client or the parties to the dispute maintain control of the negotiation using the “advice” of their counsel for what it is, “advice”.
Evidence is compelling..Litigation costs money…Negotiation saves billions…..You can’t afford not to adopt formal dispute resolution processes such as mediation.
Rather than calling it the “Google approach”, you might want to call it the “Non-American approach”. Because it feels more and more as if the American standard response to anything even remotely confrontational is litigation or even outright conflict. Words such as compromise and diplomacy seem to have been relegated to the “if nothing else works” position. A pity. For so much more can be achieved through negotiation, as Mr Mnookin so rightly points out, than through the “Shoot first, shoot hard” approach. And a large chunk of the rest of the world knows this, and gets things done smoothly and quietly through negotiating, bargaining, compromising, talking.
excellent!!!
Nice!! Where’ s number 5? Edit room cut? 🙂
The number 5 has rejoined the conversation Charley! 🙂 Thank you for your feedback!