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A group of 10 US states led by Republicans has opened a new front in US antitrust actions against Google, accusing the Internet group of abusing its monopoly over parts of the online advertising market and colluding with Facebook to block exchanges. rival advertisers.
The accusation that Google worked with Facebook to split ad profits adds a new twist to multiple lawsuits that the world’s largest tech companies have acted together to bolster their power.
The case comes two months after the Department of Justice, backed by 11 states, accused Google of using a network of contracts and partnerships with other companies to block distribution from rival search engines.
That case included a claim that Google had deliberately forged a deal with Apple, worth up to $ 12 billion a year, to bolster its monopoly, although there was no claim that Apple had colluded on the plan.
Ken Paxton, the Texas attorney general who leads the group of Republicans targeting Google, revealed the latest action Wednesday.
Google has “repeatedly used its monopoly power to control prices, [and] engage in collusion to rig auctions [of online ads] in a tremendous violation of justice, ”he said.
Referring to big tech companies, he added: “It’s time they learned the hard way that you don’t mess with Texas.”
The Republican-led complaint against Google, filed in federal court in the Eastern District of Texas, points in particular to its advertising swap, which handles automated bidding and the placement of a large volume of advertising on the web.
Dina Srinivasan, a Yale researcher who was involved in writing the complaint, said Google’s involvement in selling technology to both ad buyers and sellers, as well as running an ad exchange, echoed the type of conflicts of interest that had occurred in the past. in the financial markets.
Experience with financial regulation “shows that the first thing you need to do is minimize conflict in the marketplace,” he said, meaning that a structural separation was needed to limit the number of roles Google plays in online advertising.
The lawsuit said Google had 90 percent of the market for tools that US publishers use to sell online ads. It uses that power – and its function of selling technology to advertisers – to funnel transactions through its internal exchange, the suit alleges, meaning the company is effectively engaging in “insider trading.”
“In this e-commerce marketplace, Google is a pitcher, batter, and umpire all at the same time,” according to the states.
At one stage, Facebook had endorsed an alternative technology that would have weakened Google’s ability to funnel transactions through its own exchange, making the social network a potential rival, according to the lawsuit. But he said Facebook dropped the idea after Google offered “special access to the auction,” giving Facebook preferential entry to transactions handled through the Google exchange.
The two companies also “agreed to rig publisher auctions in favor of Facebook,” the states said. Facebook is not a defendant in the lawsuit and declined to comment on the allegations.
Google called the lawsuit “without merit” and said in a statement: “Prices for digital ads have fallen over the past decade. Ad tech fees are also falling. Google’s ad tech fees are lower than the industry average. These are the hallmarks of a highly competitive industry. “
The Republicans’ decision to act alone on the lawsuit, rather than include the Democratic states that had also been involved in building the case, hinted at a political struggle for attention in the final days of the Trump administration as they Lawsuits against Big Tech multiply.
A bipartisan group of attorneys general, led by Phil Weiser of Colorado, was set to file a separate lawsuit against Google’s dominance in the search market on Thursday, according to a person with knowledge of the case.
Paxton had been pressured to resign his role in the Google investigation. Eight of his aides resigned or were fired this year after accusing him of using his position to interfere with an investigation into a campaign donor. Officials included Darren McCarty, a former Texas deputy attorney general and the lead attorney in the Google case.
Following those revelations, Democratic attorneys general asked Paxton to resign, warning that the allegations jeopardized their “joint work.”
A person close to the process said there were no disagreements on the merits of the online advertising charges, and that the Texas-led group had tried to draw attention before the results of a similar Justice Department investigation.
Facebook has been separately charged with violating antitrust laws by 48 attorneys general from both sides in a lawsuit filed last week. The lawsuit accused the social media company of a “years-long course of anti-competitive conduct,” which included strategically buying from rivals who threatened its monopoly and cutting off services to squeeze rival developers.
Additional information from Hannah Murphy in San Francisco
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