Texas and other states sue Google for abusing 'monopolistic power'
Google is facing a new multi-state lawsuit, led by Texas, that accuses the company of abusing its “monopolistic power”, the latest in a slew of major legal efforts to rein in big tech.
In a video announcing the suit on Wednesday, the Texas attorney general-charged Google with engaging in anticompetitive behavior, particularly in the online advertising market. Texas argues that the company dominates the pathways by which an advertisement gets from the agency that produces it on to a web page or mobile app.
“Google repeatedly used its monopolistic power to control pricing [and] engage in market collusions to rig auctions in a tremendous violation of justice,” Ken Paxton said.
“It isn’t fair that Google effectively eliminated its competition and crowned itself the head of online advertising. Let me put it this way: if the free market was a baseball game, Google positioned itself as the pitcher, the batter and the umpire.” Paxton’s office released a redacted copy of a federal lawsuit, but it was not immediately clear if it had been filed in court.
The lawsuit seeks monetary damages from Google and asks the court to enact “structural relief to restore competitive conditions in the relevant markets”.
Google refuted the allegations in a statement, claiming that the fact that digital ad prices had fallen over the last decade was indicative of healthy competition in the industry and that most online publishers used a number of advertisers on their platforms.
“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” the Google spokesman said. “We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers. We will strongly defend ourselves from his baseless claims in court.”
The nine states that joined Texas are Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah and Idaho.
The Texas lawsuit will be the fourth in a series of federal and state lawsuits targeting alleged bad behavior by America’s major internet platforms, which have grown from startups to omnipresent titans in the past two decades.
In October, the US justice department filed a lawsuit accusing the tech company of abusing its position to maintain an illegal monopoly over search and advertising.
“Two decades ago, Google became the darling of Silicon Valley as a scrappy startup with an innovative way to search the emerging internet. That Google is long gone,” the suit alleged.
Paxton joined that justice department lawsuit in October.
The company has already been accused of maintaining a monopoly among search engines. The Texas lawsuit centers on how Google also dominates advertising.
Specifically, it cites the company’s role in various steps of the complex and often invisible profit chain between online publishers and advertisers, allowing it to assert substantial control over the way content is monetized. Part of this is due to its ownership of the software DoubleClick, which is used to buy and sell ads across the web.
The charges from Texas mark just the latest in an avalanche of legal challenges to big Tech. After years of relative inaction, Congress, state governments, and other federal agencies are taking aim at the tech industry.
Earlier in December, the Federal Trade Commission and 48 attorneys general accused Facebook of unfair and monopolistic practices, calling for it to be broken up. In July, executives of major tech firms Apple, Amazon, Facebook, and Google were called in front of Congress for questioning over their power. This is all in addition to the original lawsuit brought against Google by the Justice Department in October.