Google Sued By 10 US States For Alleged Facebook Collusion

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Ten US states sue Google, alleging it worked with Facebook to break US antitrust law to bolster its online advertising business

Google’s antitrust woes in the United States deepened this week after a number of US states filed more legal action, making serious allegations against the search engine giant.

Ten US States including Texas, Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah and Idaho, filed a lawsuit in the Eastern District of Texas, Reuters reported.

It should be noted that all those US states have Republican prosecutors. The lawsuit comes after the Justice Department sued Google on 20 October, accusing the $1 trillion (£770m) company of abusing its market dominance to weaken rivals’ positions.

Antitrust complaint

That case is the biggest challenge to a dominant tech company in decades, and has been compared to the Justice Department’s successful antitrust case against Microsoft of 1998 or its breakup of AT&T in the 1980s.

But now Texas along with nine other US states have added to Google’s legal woes with their own antitrust lawsuit this week.

But what exactly are they accusing the Alphabet’s owned unit of doing?

Google as is widely known, controls a third of the global online advertising industry, but the lawsuit alleges that it stifled competition in the space and enjoys “monopolistic power.”

The complaint alleges that Google abuses its ownership of digital ad marketplaces to unfairly enrich itself at the expense of fair competition.

It also claims that Google’s behaviour has stifled innovation and harmed publishers, advertisers and consumers.

Secret perks?

Furthermore, the lawsuit alleges that Facebook and Google, used a series of deals to consolidate their market power illegally.

The lawsuit cited a publicised deal in 2018 between Google and Facebook, and alleged the deal began to give Facebook’s advertiser clients the option to place ads within Google’s network of publishing partner.

But the complaint alleges that Google gave Facebook preferential treatment in this deal, and that Facebook alleged agreed to back down from supporting competing software, which publishers had developed to dent Google’s market power.

“Facebook decided to dangle the threat of competition in Google’s face and then cut a deal to manipulate the auction,” the lawsuit reportedly said, citing internal communications.

In exchange Facebook received various benefits, including access to Google data and policy exceptions that enabled its clients to unfairly get more ads placed than clients of other Google partners could.

Reuters also reported that online publishers including Genius Media Group and news website The Nation alleged on Wednesday in a separate antitrust lawsuit, which seeks class action status, that they lost revenue because of Google’s dominance in online ads.

Harming consumers?

Texas is acting as the lead in this complaint, and its attorney general, Ken Paxton, tweeted he was ‘proud’ to challenge Google.

“Texas takes the lead once more! Today, we’re filing a lawsuit against #Google for anticompetitive conduct,” he tweeted. “This internet Goliath used its power to manipulate the market, destroy competition, and harm YOU, the consumer. Stay tuned…”

Paxton then posted this video found here, in which he alleged that Google manipulates the advertising market to enrich itself.

“Google repeatedly used its monopolistic power to control pricing [and] engage in market collusions to rig auctions in a tremendous violation of justice,” Paxton said in the video.

“It isn’t fair that Google effectively eliminated its competition and crowned itself the head of online advertising,” he added. “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.”

Google response

“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” the Google spokesman was quoted by the Guardian newspaper as saying.

“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.”

There is no response from Facebook at the time of writing.

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Author: Tom Jowitt
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