Attorneys general from ten states, led by Texas, filed suit against Google this week over its digital advertising tactics. It’s the second major lawsuit filed against Google in recent months challenging the tech giant’s alleged monopoly power. The first, filed by the Justice Department, alleges that Google maintains its role as the dominant search engine by forcing other companies into exclusivity arrangements. This time, the AGs accuse Google of playing too large a role in the online advertising space. They also claim that Google colluded with Facebook to promote its own products.
“If the free market were a baseball game, Google has positioned itself as the pitcher, the batter, and the umpire,” said Texas Attorney General Ken Paxton in a video posted to Twitter announcing the lawsuit.
Google Likely Facing An Uphill Battle
The online advertising marketplace is a complicated one, where nearly all online publishers depend on Google to be the middleman in e-commerce and internet advertising venues. The complaint alleges that internal documents from Google reveal the company “sought to kill competition” through various exclusionary tactics, including an unlawful agreement with Facebook to fix advertising auctions.
Google does hold a dubious position in the online advertising market, often representing both buyers and sellers while also operating AdX – the largest exchange platform for digital ads. If successful, this lawsuit could really hit Google where it hurts, as the company generates nearly all of its revenue from ad sales – roughly $135 billion last year.
The End of An Era?
Google points to falling prices in digital advertising over the last ten years and its practice of charging less than the industry standard for online ads as evidence that it does not hold monopoly power. The company has called these most recent claims “meritless,” and says it will defend its “don’t be evil” reputation.
But the AGs contend that “the public image of brainy Google engineers having fun at their sunny Mountain View campus while trying to make the world a better place” is a lie. They say the company has repeatedly and brazenly violated antitrust and consumer protection laws, and that it’s finally time for someone to do something about it. Tech companies have enjoyed a fair amount of latitude from regulators for years, but it seems that era is coming to an end.
