States launch Google antitrust investigation

California not joining in probe of ‘potential monopolistic behavior’

In a dramatic escalation of anti-tech sentiment, the top prosecutors for 50 U.S. states and territories — but not California — on Monday launched an official investigation into Google to determine whether the Mountain View tech giant violates antitrust law and engages in monopolistic practices.

“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 (ad) auction side and even the video side with YouTube,” Texas Attorney General Ken Paxton said in announcing the probe.

The inquiry will focus initially on Google’s advertising business, but Paxton said investigators would go where “the facts lead.”

California and Alabama are the only states not participating in the probe. The office of California Attorney General Xavier Becerra on Monday refused to

confirm it was not involved in the investigation.

“California remains deeply concerned and committed to fighting anti-competitive behavior,” the office said in an email to this news organization. “Regarding this investigation or any other, to protect the integrity of potential and ongoing investigations, we cannot provide comment.”

Major U.S. technology companies have become a bipartisan target at the federal level, and are under scrutiny by the Department of Justice and Federal Trade Commission over their vast earnings and consumer offerings. Sen. Elizabeth Warren, a Democratic candidate for president, has attacked Google, Facebook and Amazon as monopolies with “too much power.” Last week, a smaller group of state attorneys general announced an antitrust probe of Facebook, which

is under an FTC antitrust investigation.

Last month, Google revealed in a Securities and Exchange Commission filing that the federal Department of Justice had demanded information and documents related to antitrust investigations. In a blog post Friday, senior Google executive Kent Walker said that the company expected state attorneys general to ask “similar questions” to those posed by the Justice Department.

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

In response to Monday’s announcement by state attorneys general, Google referred this news organization to Walker’s blog post.

Google dominates the U.S. digital advertising market, with a 37% share so far in 2019, according to market-analysis

firm eMarketer. This year for the first time, Google’s take of total U.S. advertising spending, online and offline, is expected to rise past 20%, eMarketer reported Monday.

At the announcement of the investigation, Washington, D.C., Attorney General Karl Racine said the probe would examine “potential monopolistic behavior” by Google, with regard to advertising associated with its search service.

“Very compelling analyses suggest that the overwhelming number of query responses relate to Google businesses and/or advertisers that pay for that slot,” Racine said. Small businesses, he added, “may be locked out as a result of what may be monopolistic power.”

Racine highlighted the bipartisan nature of the state-level action, saying he was joined in the probe by attorneys general he strongly disagrees with on issues including gun rights, health care, reproductive rights and immigration.

“We are acting as one today,” Racine said.

However, California’s absence from the group of states probing Google drew a sharp rebuke from California Assemblyman Jordan Cunningham, R-San Luis Obispo, who last week joined his Republican colleagues in filing a resolution demanding that California “work closely with other state attorneys general to determine legal actions the State of California and other states may take to curb the monopolistic powers of giant technology companies.”

Cunningham said Monday in an email from his office that Becerra’s “refusal to join the bipartisan investigation” was “embarrassing.” The state “deserves to be at the table,” Cunningham said.

The states’ Google antitrust investigation will probably focus on the company’s use of user data in its ad business, and its acquisition of companies that might become competitors, said Santa Clara University

law professor Donald Polden.

State prosecutors will likely work with federal investigators from the FTC and Justice Department who are probing the tech companies, and share information back and forth, Polden said. A lawsuit against Google by the Justice Department may result, with backing from the states, he said. But if that civil action leads to settlement proposals unacceptable to the states, the states may pursue their own cases, probably in federal court, Polden said. He said he expects the Google antitrust probe to last years. California, he said, probably declined to join the probe because Google provides a great deal of money in taxes and political contributions, and employs tens of thousands of people in the state.

While critics of Big Tech have proposed breaking up major firms including Google, that’s an unlikely outcome, Polden said. More probable is an order or deal requiring the company to pay users for data Google obtains through its services, he suggested.

News on Friday of the investigation drew criticism from the Competitive Enterprise Institute, a conservative think tank that has on at least one occasion, according to The Washington Post, received sponsorship from Google for its annual fundraising dinner.

“These state attorneys general are expanding the power of their office and stretching the limits of what constitutes an antitrust violation,” the institute said in a news release Friday. “This sort of highprofile activism may benefit state AGs’ political ambitions, but impose harmful costs on consumers, businesses, and the economy.”

Google’s practices that are now under close examination in the U.S. have already drawn more than $9 billion in competition-related fines in Europe since 2017.