48 states join probe of Google prac­tices

Rut­ledge: Goal to pro­tect con­sumer

Arkansas Democrat-Gazette - - Front Page - FRANK E. LOCKWOOD

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 inves

tiga­tion 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.

AP/MANUEL BALCE CENETA

“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,” Arkansas At­tor­ney Gen­eral Les­lie Rut­ledge said Mon­day out­side the U.S. Supreme Court build­ing.

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