The complaint, which targets Google’s central role in the buying and selling of display ads across the web, was filed in federal court in Texas Wednesday.
“Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions in a tremendous violation of justice,” Texas Attorney General
“If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” Paxton said.
The case marks the second antitrust action against the search giant after the U.S.
Texas and the states said Google came to dominate the display advertising market not through innovation, but by relying on exclusionary tactics that shut out competition.
“The Supreme Court has warned that there are such things as antitrust evils,” the complaint says. “This litigation will establish that Google is guilty of such antitrust evils, and it seeks to ensure that Google won’t be evil anymore.”
A Google spokesperson called Paxton’s suit “meritless” and said the company had “invested in state-of-the-art ad tech services that help businesses and benefit consumers.”
“Digital ad prices have fallen over the last decade,” the spokesperson added. “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 states accused Google of entering into an illegal agreement with Facebook, its biggest competitor in the advertising market, to manipulate the online auctions where ad space is bought and sold. The agreement hasn’t been previously been made public.
Facebook threatened to compete against Google with its own marketplace and support a type of auction favored by publishers. Facebook then backed off in return for Google giving Facebook “information, speed and other advantages” in auctions run by Google for publishers’ mobile apps, according to the complaint.
Facebook didn’t immediately respond to a request for comment on the allegations.
Many of the details of their arrangement are redacted from the complaint, including Google’s internal code name for the deal, which was inspired by a Star Wars character, the complaint says.
Pressure on dominant technology companies has escalated under President
The push is expected to continue under President-elect
Paxton had also joined the Justice Department’s case in October, along with 10 other Republican state attorneys general, in the most
The Google adtech business, which sells services that handle almost every step a digital ad takes on its journey from a brand’s creative team to a consumer’s screen, generated more than $21 billion in revenue in 2019.
Another group of states led by Colorado are also investigating Google and could file a third lawsuit as soon as Thursday focusing on the search and advertising business, according to two people familiar with the matter.
The Justice Department also investigated the ad-tech market, where Google operates technology for online publishers and advertisers as well as the exchanges that connect the two, Bloomberg
Publishers and advertisers have long complained that Google’s vast and complex digital advertising system is a “black box” that leaves them in the dark about how ad placements are fulfilled and how prices are set. News publishers in particular have
Google has previously said it has driven down the prices for ads while expanding opportunities for small businesses to reach customers. It has also boasted that it sends 70% of revenue from digital ads back to publishers, and has criticized the U.S. search case as “deeply flawed.”
Although Google began as a search engine, it grew quickly through acquisitions, including that of the DoubleClick digital advertising company in 2007, to control vast swaths of the digital advertising ecosystem. Google also stockpiled immense troves of data -- decades’ worth of consumer and business buying preferences and surfing habits -- to power its ads and make it harder for new entrants.
In September 2019, Paxton
Yet the Texas-led coalition began to split in the ensuing months as other states pursued their own lines of inquiry beyond the ad market, including Google’s search business and its Android mobile operating system, Bloomberg News
Paxton, a conservative Republican, in October was
Google is also facing increasing pressure in Washington from other corners. A House panel that spent more than a year probing dominant tech companies accused Google of stealing content from rivals to create a “walled garden” to keep users on its properties, rather than directing them to other sites. The panel, led by Representative
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