‘Google Abusing Ad Monopoly’: Ten US States File Antitrust Lawsuit

The lawsuit led by Texas comes two months after the US Dept of Justice initiated a similar action against Google.

Photo used for representation.

(Photo: AP)

Google is facing yet another antitrust lawsuit, this time by 10 US states led by the Texas attorney-general and focusing on its advertising technology.

The lawsuit claims Google unlawfully acquired, attempted to acquire, or maintained a monopoly in several steps of the online ad market including both buy and sell sides, CNBC reported. It also alleges Google has engaged in unlawful tying arrangements between its ad products so publishers had to use another Google tool if they chose to operate on its ad exchange.

The complaint also claims Google and Facebook, which it names as a “co-conspirator,” harmed competition through an unlawful agreement to rig auctions and fix prices.

The lawsuit led by Texas comes two months after the US Deprtment of Justice initiated a similar action against Google for “unlawful maintaining of monopolies”. After a year of investigation into Google’s business practices, the United States Department of Justice had filed a landmark antitrust lawsuit against the tech giant in October.

Allegations Against Google

The Texas Attorney General’s official Twitter handle posted on 17 December, “Today, we’re filing a lawsuit against #Google for anticompetitive conduct. This internet Goliath used its power to manipulate the market, destroy competition, and harm YOU, the consumer. Stay tuned…”

“If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” Ken Paxton, the Texas attorney general, said in a video on Twitter announcing plans for the suit.

The lawsuit alleges that Google’s 2008 acquisition of ad tech company DoubleClick marked a “fundamental change” where the company began to “exert leverage” as a middleman to extract payments from all steps of the complex online ad-buying process, CNBC reported.

“Google’s own system for selling ads across the web has been built over more than a decade. In 2007, Google bought DoubleClick, which offered advertising technology and acted as a marketplace, in a deal that has since been criticised as central to Google’s dominance,” The New York Times said in its report on the issue, adding Google now controls software at every step of the ad sales process.

Prosecutors said that after buying DoubleClick, Google “quickly began to use its new position to exert leverage.”

According to the New York Time report, prosecutors said that Google then tried to destroy a process designed by publishers to introduce more competition into the market for online ads. Under that system, publishers were able to sell ad space in more online marketplaces at once, reducing their reliance on Google’s ad tech.

The states said that Google had maintained its dominance in part by reaching an agreement with Facebook to limit the social network’s involvement in that process. In return, Google gave Facebook an advantage in other ad auctions it runs, the prosecutors said.

“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” NYT quoted Google spokeswoman, Julie McAlister as stating. “We will strongly defend ourselves from his baseless claims in court.”

Second Antitrust Lawsit Against Google

The Justice Department, describing Google as a “monopoly gatekeeper for the internet,” has alleged in its 64-page lawsuit that the $1 trillion company is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States.”

The agency has accused Google of blocking competition and preventing other search engines from scaling their services by entering into exclusive agreements with device manufacturers like Apple and Samsung as well as telecom service providers.

While the lawsuit refers to Google’s alleged anti-competitive practices with regards to American companies, consumers and advertisers, the core allegations have found an echo across the European Union and, in recent times in India as well.

It is important to note that the Department has gone after the Google’s core search engine services, which lies at the foundation of its conglomerate of other services like advertising, video, data mining.

The agency has listed the following as its primary allegations of Google’s alleged anti-competitive practices:

• They have had harmful effects on competition and consumers
• Entering exclusionary agreements with companies like Apple, LG, Samsung to be their default search engine
• Google, through its search engine, has become the monopoly gatekeeper of the internet
• Other search engines have no real chance of competing as they are “denied vital distribution, scale, and product recognition”
• Denying competitors to scale effectively
• Blocking vital distribution channels for competitors and, by doing so, Google “thwarts potential innovation.”