San Francisco: Texas and nine other US states have filed an antitrust lawsuit against Google, accusing it of monopolising or attempting to monopolise products and services used by advertisers and publishers in online-display advertising.
The lawsuit filed on Wednesday in the US District Court for the Eastern District of Texas alleges that Google entered into an anticompetitive agreement with Facebook to boost its online advertising business.
This agreement led to making misrepresentations to users and customers, and suppressing competition, according to the complaint.
In addition to representing both the buyers and the sellers of online-display advertising, Google competes directly against the buyers and sellers they separately represent — all while operating the largest exchange on which these ad products are bought and sold, the complaint alleged.
“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 competitive process,” Texas Attorney General Ken Paxton said in a statement.
“In this advertising monopoly on an electronically traded market, Google is essentially trading on ‘insider information’ by acting as the pitcher, catcher, batter and umpire, all at the same time. This isn’t the ‘free market’ at work here. This is anti-market and illegal under state and federal law.”
The lawsuit alleges that Google engaged in false, misleading and deceptive acts while selling, buying and auctioning online-display ads.
These anticompetitive and deceptive practices demonstrably diminished publishers’ ability to monetize content, increased advertisers’ costs to advertise and directly harmed consumers, according to the complaint.
Google said that Texas Attorney General Paxton’s ad tech claims are “meritless,” The Verge reported.
“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,” a company representative was quoted as saying.
The announcement follows a separate complaint that the US Department of Justice filed in October to stop Google from unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets and to remedy the competitive harms.