The antitrust heat on Google is increasing.
Texas Attorney General Ken Paxton on Wednesday filed a lawsuit, along with nine other states’ attorneys general, that accuses Alphabet Inc.’s
dominant search engine of having and abusing a monopoly on the online-advertisement market. The lawsuit notes that in the ad market, Google works with both buyers and sellers while owning the exchange on which many interact.
“If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” Paxton said in a Twitter video announcing the suit.
The suit claims that Google entered into monopolistic territory in online ads with the acquisition of DoubleClick, and then acted anticompetitively to shore up that dominance. It specifically notes that publishers attempted to get around Google with a new form of online ad auctions called “header bidding,” but that Google took several steps to undermine that approach, including colluding with the second biggest player in online ads, Facebook Inc.
after the social-media company moved into header bidding.
“In the end, Facebook curtailed its involvement with header bidding in return for Google giving Facebook information, speed and other advantages in the [redacted] auctions that Google runs for publishers’ mobile app advertising inventory each month in the United States,” the suit states.
In a statement, a Google spokeswoman said that the company “will strongly defend ourselves from his baseless claims in court.”
“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. Digital ad prices have fallen over the last decade. Ad-tech fees are falling too. Google’s ad-tech fees are lower than the industry average. These are the hallmarks of a highly competitive industry,” the statement read.
The Justice Department and a dozen states sued Alphabet for monopolistic and anticompetitive actions in October, targeting the company’s use of a search deal with Apple Inc.
and the required inclusion of Google apps in its Android mobile operating system to dominate mobile search. Several states’ attorneys general declined to sign on to that lawsuit, and Texas was joined Wednesday by other Republican-led states: Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.
The Texas suit is not expected to be the last filed by states against Google. Politico reported late Tuesday that other states — led by Colorado Attorney General Phil Weiser and Nebraska Attorney General Doug Peterson — planned to file an antitrust lawsuit as early as Thursday.
Politico reported that those states plan a broader antitrust lawsuit against Google that focuses on how the company surfaces search results. Companies such as Yelp Inc.
and travel websites have complained about Google favoring its own competing services in search results, forcing them to sacrifice traffic to competitive offerings or pay to advertise at the top of search results.
If that lawsuit comes to fruition as expected, Alphabet will be fighting three separate antitrust lawsuits focused on the core of Google’s business: online search, online advertising and mobile search.
Antitrust scrutiny of Big Tech companies has increased throughout the year, with Facebook joining Google last week as an official target of the federal government as well as states. Apple Inc.
has been sued by “Fortnite” maker Epic Games Inc., which accuses the iPhone manufacturer as well as Google of misusing their dominant position in mobile apps, and Amazon.com Inc.
has been targeted by the European Union and is reportedly the focus of a U.S. inquiry as well.
Google Class A shares declined to 0.2% Wednesday. The stock has increased more than 31% so far this year, making Alphabet worth roughly $1.2 trillion, as the S&P 500 index
has gained 14.4%.