Google Faces a New Antitrust Lawsuit

Google is facing another antitrust lawsuit, this time coming from a group of state attorneys general led by Texas that is targeting the company’s advertising technology services.

The suit was filed on Dec. 16 and involves ten states who are alleging that Google is running an illegal digital-advertising monopoly with the help of rival company Facebook. The two companies allegedly made a deal to rig ad auctions that was code-named after Star Wars characters.

“Google is a trillion-dollar monopoly brazenly abusing its monopolistic power, going so far as to induce senior Facebook executives to agree to a contractual scheme that undermines the heart of [the] competitive process,” said Ken Paxton, the Texas attorney general.

The complaint, filed in U.S. District Court in Texas, alleges that after Facebook emerged as a competitor to Google’s advertising business in 2017 Google initiated an agreement in which Facebook would curtail its competitive moves in return for guaranteed special treatment in Google-run ad auctions.

The suit also alleges that Google overcharged digital publishers for the ads it showed across the web and forced out rivals who tried to challenge the company’s dominance.

The suit continues to accuse Google of engaging in an unlawful tying arrangement between its ad products. Specifically, publishers had to use another Google tool if they chose to operate on its ad exchange. This practice allowed Google to maintain a monopoly in several steps of the online ad market on both the buy and sell sides. These monopolistic practices were the subject of  the Senate Judiciary Subcommittee on Antitrust’s hearing on Sept. 15 called “Stacking the Tech: Has Google harmed competition in online advertising?”

“If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” said Ken Paxton, in a video on Twitter announcing plans for the suit.

The accusation adds extra pressure to Google and Facebook, who are currently subject to recently filed federal antitrust lawsuits.

The Facebook antitrust suit alleges that the company abused its dominance in the digital marketplace and engaged in anticompetitive behavior through its acquisitions of Instagram and WhatsApp. The complaint also alleges that Facebook imposed anticompetitive conditions on third-party software developers’ access to valuable interconnections on its platform.

The Google antitrust suit accuses Google of unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices

Spokespersons for Google vehemently denied the allegations against the company. Google also claims that it competes with a wide variety of tech companies in the advertising technology space and that its services work with those offered by competitors.

“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts. 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, ” said a Google spokesperson on Wednesday.

This lawsuit is the first by regulators in the United States to focus on the tools that connect buyers of advertising space with publishers who sell it.

Prosecutors asked for monetary penalties and structural changes at the company as a remedy, but they did not add specific details in the complaint.

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