Texas, 9 US states, accuses Google of partnering with Fb to violate antitrust legal guidelines
© Reuters. FILE PHOTO: The Google logo is at the entrance to the Google offices in London
By Diane Bartz and Paresh Dave
WASHINGTON (Reuters) – Texas and nine other states sued Google on Wednesday, accusing Google of collaborating with them Facebook Inc. (NASDAQ 🙂 in an unlawful way that violated antitrust laws to fuel the already dominant online advertising business. The states called on the Alphabet (NASDAQ 🙂 Inc. company, which controls a third of the global online advertising industry, to reimburse them for damages and requested "structural relief," usually interpreted to mean that a company is forced to To sell part of his property.
The Texas lawsuit is the second major regulatory complaint against Google and the fourth in a series of federal and state lawsuits aimed at curbing the alleged bad behavior of big tech platforms, which have grown significantly over the past two decades.
Google called the lawsuit in Texas "unfounded". Facebook did not immediately respond to a request for comment.
Wednesday's lawsuit increases legal stakes for Google, which is expected to attract a third antitrust lawsuit from more than 30 attorneys general, according to a source familiar with the matter.
In its lawsuit, Texas calls on a judge to find Google guilty of antitrust violations and order the cessation of the violations. Google has been accused of abusing its monopoly in the digital ad market so its own exchange can win ad auctions even when others bid higher and overwhelm publishers for ads.
It also accused Google of working with Facebook. The two companies compete fiercely in Internet ad sales, and together they represent more than half of the global market.
"As internal Google docs show, Google tried to kill competition through a number of exclusionary tactics, including an illegal agreement with Facebook, the greatest potential threat to competition," the lawsuit said.
The lawsuit, which was filed in the Eastern District of Texas, is also closely related to concerns Rupert Murdochs News Corp (NASDAQ 🙂 and other media outlets have publicly raised with regulators in the US and Europe over the past two years. Google cut its fees to near zero to gain dominance among publishers, used misleading tricks to mediate transactions between publishers and advertisers, and withdrew high fees from both parties for playing arbitrators.
In a video posted on Twitter, Texas Attorney General Ken Paxton said, "If the free market were a baseball game, Google would position itself as the pitcher, batsman and umpire."
Paxton, who faces allegations that he abused his office power and committed bribery, also recently denied the results of the November 3 US presidential election in several battlefield states. The Supreme Court denied this lawsuit.
A Google spokeswoman said the company would defend itself against the "unfounded claims of the Texas court". She added, "Digital ad prices have been falling over the past decade. Ad tech fees are falling too. Google ad tech fees are below the industry average. These are the hallmarks of a highly competitive industry."
Paxton, along with ten other attorneys general, joined a US Department of Justice lawsuit against the company in October alleging the $ 1 trillion California-based company of illegally using its market power to hobble rivals.
The nine states that joined Texas on Wednesday are Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah, and Idaho. They all have Republican prosecutors.
Google Ads sales account for over 80% of Alphabet's sales. However, most of Alphabet's sales and profits come from Google's high-margin operation, which places text ads above search results.
The business targeted on Wednesday – serving ads on partner apps and websites – is far less important to Google.
Alphabet in its latest financial report reported quarterly digital advertising revenue of $ 37.1 billion. Alphabet stock fell 0.2% on Wednesday to $ 1,757.19. Facebook stocks, which briefly went negative after the details of the Texas lawsuit were released, reversed losses and ended up changing little