Google faces lawsuits from 10 US states over ‘anti-competitive’ online ad sales
Ten states filed a lawsuit against Google on Wednesday, accusing the search giant of “anti-competitive conduct” in the online advertising industry, including an agreement to manipulate sales with rival Facebook.
The Texas Attorney General announced the suit, which was filed in federal court in Texas, claiming that Google uses its “monopoly power” to control the prices of online advertisements, fixing the market in its favor and eliminating competition.
“This Goliath of a company is using its power to manipulate the market, destroy competition and harm you, the consumer,” Paxton said in the video posted to Twitter.
This Internet Goliath has used its power to manipulate the market, destroy competition and harm you, the consumer. Stay tuned… pic.twitter.com/fdEVEWQb0e
— Texas Attorney General (@TXAG) December 16, 2020
Google, which is based in Mountain View, Calif., called Paxton’s claims “baseless” and said the price of online advertising has fallen over the past decade.
“These are the hallmarks of a highly competitive industry,” the company said in a statement. “We will strongly defend against (Paxton’s) baseless claims in court.”
Paxton led a bipartisan coalition of 50 U.S. states and territories that announced in September 2019 they were investigating Google’s business practices, citing “potential monopolistic behavior.”
Now Texas is bringing the lawsuit along with other Republican attorneys general from Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and ‘Utah.
The suit targets Google’s core business, the digital ads that generate nearly all of its revenue, as well as all of the money that its parent company, Alphabet, depends on to help fund a range of high-profile tech projects. wingspan.
As more and more marketers have increased their spending online, these digital ads have turned Google into a money-making machine. In the first nine months of this year, Google’s advertising sales totaled nearly $101 billion (about Rs. 7,41,500 crores), accounting for 86% of its total revenue.
Now, the states argue that Google intends to use its alleged stranglehold on digital ads to stifle other potential avenues of competition and innovation. The company entered into an illegal agreement with Facebook, a major ad competitor, to manipulate ad auctions, according to the complaint. Facebook declined to comment.
“Google has an appetite for total dominance, and its latest ambition is to transform the free and open architecture of the Internet,” the suit claims.
In the “ad technology” marketplace that brings together Google and a vast universe of online advertisers and publishers, the company controls access to advertisers who place ads on its dominant search platform. Google also manages the bidding process for advertisers to serve ads on a publisher’s site. Nine of Google’s products in search, video, mobile, email, mapping and other areas are estimated to have more than 1 billion users each, providing the company a wealth of user data that it can deploy in the advertising process.
Google officials say the company shares the majority of its “ad tech” revenue with publishers, such as newspaper websites. One official recently dismissed even the claim that Google is dominant, saying market dominance suggests abuse, which is alien to the company.
The state lawsuit comes after the US Department of Justice sued Google in October for abusing its dominance in online search and advertising, the government’s most significant attempt to bolster competition since its landmark case. against Microsoft two decades ago.
Separately, the FBI is investigating whether Paxton, a close ally of President Donald Trump, broke the law by using his office to help a wealthy donor who is also under federal investigation. This fall, eight of the attorney general’s top aides charged him with bribery, abuse of power and other crimes while serving an Austin real estate developer who employs a woman with whom Paxton allegedly had an extramarital affair.
All eight of Paxton’s accusers have since been fired or resigned, including the deputy attorney general who led the bureau’s investigation into Google. Court complaint attorneys with private firms in Houston, Chicago and Washington, DC, are the lead attorneys in the case.
Paxton announced the lawsuit the week after the U.S. Supreme Court denied his legal request to overturn Joe Biden’s presidential victory, a case that has sparked widespread speculation that the attorney general is seeking a pardon. preemptive Trump.
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