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Update: Google hit with multistate antitrust suit involving Facebook

Texas and nine other states filed an antitrust lawsuit Dec. 16 against Alphabet Inc.'s Google LLC alleging anti-competitive conduct, exclusionary practices and deceptive misrepresentations.

The states allege in their lawsuit, which was filed in federal court in Texas, that Google monopolized online-display advertising and that the company had an anti-competitive agreement with Facebook to harm competition.

SNL Image
Google was hit with a second multistate antitrust suit.
Source: Pixabay

"As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook Inc.], its largest potential competitive threat, to manipulate advertising auctions," the states allege in their suit. "The Supreme Court has warned that there are such things as antitrust evils. This litigation will establish that Google is guilty of such antitrust evils, and it seeks to ensure that Google won't be evil anymore."

Google's unofficial motto for many years was "Don't be evil."

Specifically, the suit alleges that Google "made overtures" to Facebook regarding Facebook's plan to embrace a method of programmatic ad buying known as header bidding that allegedly routes ad inventory to "multiple neutral exchanges each time a user visited a web page in order to return the highest bid for the inventory."

The suit alleges that Google felt threatened by Facebook embracing this approach in the market and that in the end, Facebook "curtailed its involvement with header bidding in return for Google giving Facebook information, speed, and other advantages in the … auctions that Google runs for publishers' mobile app advertising inventory each month in the United States."

Beyond this agreement, the states also allege that Google "employed a number of other anticompetitive tactics to shut down competition from header bidding."

For example, the complaint says Google deceived exchanges into bidding with Google, rather than with header bidding.

The suit asks for a range of different types of relief, including monetary damages for violations of antitrust laws, monetary relief for plaintiff states, and injunctive and structural relief to "restore competitive competitions" in the relevant markets.

In a video released Dec. 16, Texas Attorney General Ken Paxton alleged that Google "effectively eliminated its competition and crowned itself the head of online advertising."

In a statement to multiple media outlets, a Google spokesperson called the suit meritless.

"We've invested in state-of-the-art ad tech services that help businesses and benefit consumers," the company said, noting that digital ad prices and ad tech fees are falling. "These are the hallmarks of a highly competitive industry. We will strongly defend ourselves from his baseless claims in court."

The nine other states joining Texas in the lawsuit are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.

The lawsuit follows a separate antitrust lawsuit filed by the U.S. Justice Department in October against Google that alleges the company unlawfully maintained monopolies in the general search, search advertising, and general search text advertising markets through anti-competitive and exclusionary practices.

On. Dec. 9, Facebook was also subject to multiple antitrust lawsuits. New York Attorney General Letitia James led a group of 48 attorneys general from across the U.S. in filing an antitrust lawsuit against Facebook, alleging in the court filing that the company illegally stifled competition to protect its monopoly power.

Separately, the U.S. Federal Trade Commission filed its own antitrust lawsuit against Facebook for engaging in allegedly anti-competitive business practices.