Thu 17 December 2020:
Ten US states, led by Texas, filed a lawsuit against Google on Wednesday over alleged anti-competitive practices to boost its online advertising business by illegally working with social network Facebook.
The lawsuit accuses Google of violating anti-trust law with its ad revenue practices. The company and other major tech firms have been in hot water this year over antitrust and anti-competitiveness charges.
The states asked a judge on Wednesday for the Alphabet Inc-owned company, which controls a third of the global online advertising industry, to compensate them for damages and sought “structural relief”, which is usually interpreted as forcing a company to divest some of its assets.
“This Goliath of a company is using its power to manipulate the market, destroy competition, and harm you, the consumer,” Texas Attorney General Ken Paxton said of Google in a video released on Twitter and Facebook.
#BREAKING: Texas takes the lead once more! Today, we’re filing a lawsuit against #Google for anticompetitive conduct.
This internet Goliath 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
The Texas lawsuit is the second big complaint from regulators against Google and the fourth in a series of federal and state lawsuits aimed at reining in alleged bad behaviour by Big Tech platforms that have grown significantly in the past 20 years.
Google called the Texas lawsuit “meritless”. Facebook did not immediately respond to requests for comment by the Reuters and Bloomberg news agencies.
In its lawsuit, Texas asks a judge to find Google guilty of breaking antitrust law and to order the violations to stop. It accuses Google of abusing its monopoly over the digital advertising market, allowing its own exchange to win advertising auctions even when others bid higher and overcharging publishers for ads.
It also accused Google of working with Facebook. The two companies compete heavily in internet advertisement sales and together capture more than half of the market globally.
“As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat,” the lawsuit said.
Google has been under the gun from the federal government this year for anti-trust investigations. The criticism has been extended to other major tech companies, including Facebook, Apple and Amazon. All four of the companies faced an anti-trust hearing with Congress earlier this year.
Nine of Google’s products in search, video, mail and other areas are estimated to have over 1 billion users each, providing the company with a vast amount of user data that it can use in the advertising sphere.
The lawsuit, filed in the Eastern District of Texas, also hews closely to concerns publicly raised by Rupert Murdoch-owned News Corp and other media companies to regulators in the United States and Europe over the last two years.
It said Google lowered its fees to near-zero to gain dominance among publishers, used deceptive tricks to broker transactions between publishers and advertisers and extracted high fees from both parties for playing referee.
US internet giants are also facing regulatory scrutiny in Australia. Its government finalised plans on Tuesday to make Facebook and Google pay the country’s media outlets for news content, a world-first move aimed at protecting independent journalism that has been strongly opposed by the internet giants.
Under laws to go to parliament this week, Australian Treasurer Josh Frydenberg said the Big Tech firms must negotiate with local publishers and broadcasters how much they pay for content that appears on their platforms. If they cannot strike a deal, a government-appointed arbitrator will decide for them.
