48 states join probe of Google practices

Rutledge: Goal to protect consumer

WASHINGTON — Arkansas and 47 other states are launching an investigation into the business practices of Google, the 21-yearold Internet behemoth.

Attorneys general from Arkansas and 11 other states announced the probe Monday during a news conference in front of the the U.S. Supreme Court building.

Every state besides Alabama and California agreed to back the review.

The office of Texas Attorney General Ken Paxton will help to lead the effort.

“This investigation is not a lawsuit. It is an investigation to determine the facts,” Paxton told reporters Monday. “Right now we’re looking at advertising. But the facts will lead where the facts will lead.”

A news release from Paxton’s office had described the probe as a “multistate

investigation into whether large tech companies have engaged in anticompetitive behavior that stifled competition, restricted access, and harmed consumers.”

But Google was the only company singled out Monday.

“This is a company that dominates all aspects of advertising on the Internet and searching on the Internet, as they dominate the buyer side, the seller side, the auction side and even the video side with YouTube,” Paxton said.

Google has its headquarters in Mountain View, Calif. Its parent company, Alphabet, reported revenue of $136.8 billion and profits of $30.7 billion in 2018.

Last year, Alphabet’s ad revenue surpassed $116 billion.

Newspaper advertising revenue, which has plummeted over the past decade, peaked at $49.3 billion in 2006, according to the News Media Alliance, an industry trade organization formerly known as the Newspaper Association of America.

As it prepares for the state investigation, Google is also dealing with a separate investigation by the U.S. Department of Justice.

A Securities and Exchange Commission report, filed on Friday by Alphabet, said the company had “received a civil investigative demand from the DOJ requesting information and documents relating to our prior antitrust investigations in the United States and elsewhere.”

Potential investors were given notice that the company “expect[ed] to receive in the future similar investigative demands from state attorneys general.”

In a written statement, also posted Friday, Google promised to cooperate with state and federal officials, saying “governments should have oversight to ensure that all successful companies, including ours, are complying with the law.

“We have always worked constructively with regulators and we will continue to do so,” the company said. “We look forward to showing how we are investing in innovation, providing services that people want, and engaging in robust and fair competition.”

At Monday’s news conference, officials stressed the bipartisan nature of the undertaking.

“We’re Republican, Democrat, men, women, black, white and Hispanic, all standing together to protect the free market, to protect competition, but most importantly, to protect the American consumer from this online search engine juggernaut,” said Arkansas Attorney General Leslie Rutledge.

Support for the investigation crosses the ideological spectrum, supporters said.

“I’m next to friends of mine who I vehemently disagree with on issues like immigration, reproductive rights, gun rights and other issues. Certainly health care. But we are acting as one today,” said District of Columbia Attorney General Karl Racine.

He promised “a fair and full investigation that will follow … the facts.”

In March, Google was fined 1.5 billion euros (about $1.7 billion) after the European Union faulted its business practices. The EU handed Google an even larger fine — 4.34 billion euros (roughly $5 billion) — last year.

Google isn’t the only Internet company facing governmental scrutiny.

On Friday, New York Attorney General Letitia James announced that eight state attorneys general would be examining the business practices of Facebook to see whether the company “has stifled competition and put users at risk. We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”

In an interview afterward, Rutledge said she hasn’t decided whether to join the Facebook investigation.

“Today, we want to focus on Google and [the] big tech company of Google,” she said.

Asked why Arkansas would join the Google investigation but not the Facebook investigation, Rutledge said, “That is something that we’re looking into at the attorney general’s office in Arkansas and we [will] determine, again, whether or not it violates antitrust laws as well as [the] Arkansas Deceptive Trade Practices Act.”

The newly launched Google probe was welcomed Monday by the Open Markets Institute, a left-leaning think tank that opposes monopolies.

“We applaud the … state attorneys general for taking this unprecedented stand against Big Tech by uniting to investigate Google’s destruction of competition in search and advertising,” said Sally Hubbard, the institute’s director of enforcement strategy, in a written statement. “We haven’t seen a major monopolization case against a tech giant since Microsoft was sued in 1998. Today’s announcement marks the start of a new era.”

But Kent Lassman, president of the right-leaning Competitive Enterprise Institute, said the scrutiny is unwarranted.

“Both Facebook and Google have delivered value for consumers the world over, offer their respective primary services for free, and compete in a multichannel, highly competitive advertising market,” he said in a written statement.

The investigations amount to political grandstanding, he maintained.

“Abusive antitrust regulation often appears to be a winner for ambitious politicians. Everyone else — including new market entrants and small players who get overlooked amid all the shouting — loses,” he said.