Ten states sue Google for ‘anti-competitive’ online ad sales

DALLAS (AP) — Ten states on Wednesday brought a lawsuit against Google, accusing the search giant of “anti-competitive conduct” in the online advertising industry, including a deal to manipulate sales with rival Facebook.

Texas Attorney General Ken Paxton announced the suit, which was filed in a federal court in Texas, saying Google is using its “monopolistic power” to control pricing of online advertisements, fixing the market in its favour and eliminating competition.

“This Goliath of a company is using its power to manipulate the market, destroy competition, and harm you, the consumer,” Paxton said in the video posted on Twitter.

Google, which is based in Mountain View, California, called Paxton’s claims “meritless” and said the price of online advertising has fallen over the last decade.

“These are the hallmarks of a highly competitive industry,” the company said in statement. “We will strongly defend ourselves from (Paxton’s) baseless claims in court.”

Texas Attorney General Ken Paxton speaks at the Austin Police Association in Austin, Texas. PHOTO: AP

Paxton led a bipartisan coalition of 50 United States (US) states and territories that announced in September 2019 they were investigating Google’s business practices, citing “potential monopolistic behaviour”.

Now Texas is bringing the suit along other Republican attorneys general from Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.

The complaint targets the heart of Google’s business – the digital ads that generate nearly all of its revenue, as well as all the money that its corporate parent, Alphabet Inc, depends upon to help finance a range of far-flung technology projects.

As more marketers increased their spending online, those digital ads have turned Google into a moneymaking machine. Through the first nine months of this year, Google’s ad sales totalled nearly USD101 billion, accounting for 86 per cent of its total revenue.

And now the states contend Google intends to use its alleged stranglehold on digital ads to choke off other avenues of potential competition and innovation. The company struck an illegal deal with Facebook, a major competitor for ads, to manipulate advertising auction, according to the complaint. Facebook declined to comment. “Google has an appetite for total dominance, and its latest ambition is to transform the free and open architecture of the
Internet,” the suit alleges.