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50 state attorneys general launch probe into Google's business practices

Fifty state attorneys general confirmed Sept. 9 they are launching an investigation into potentially monopolistic behavior by Alphabet Inc.'s Google LLC in the online advertising marketplace.

The probe, led by the Texas attorney general's office, will focus on whether Google stifled competition by dominating the search and advertising markets, and whether its actions resulted in fewer choices and higher prices.

"This is a company that dominates all aspects of advertising on the internet and searching on the internet," Texas Attorney General Ken Paxton said at a Sept. 9 press event on the steps of the Supreme Court. "This investigation is not a lawsuit, it is an investigation to determine the facts."

Paxton said the group has issued civil investigative demands to the company related to its advertising practices. Alphabet earlier disclosed in a Sept. 6 regulatory filing that it had received a civil investigative demand from the U.S. Department of Justice that requested information and documents related to previous antitrust investigations in the U.S. and elsewhere.

When asked what could come of the investigation, Karl Racine, attorney general for the District of Columbia, said the group has to find liability before it gets to any remedies. Racine also added that it "remains to be seen" whether the coalition of attorneys general will expand its probe into other companies.

"The fact of the matter is each and every one of our consumers, our citizens and the residents of our states, do either have or yearn to have access to the internet and therefore it's a proper place for a state attorney general to ensure that the landscape is fair and not unfairly manipulated in one company's direction," he said.

South Dakota Attorney General Jason Ravnsborg told S&P Global Market Intelligence in an interview that the announcement of a probe does not necessarily mean that the states will pursue relief.

"Just because an investigation is started, doesn't mean that there's any conclusion or pre-conclusion established," he said. "We want to see where the facts take us."

However, Ravnsborg said the investigation signals to other companies that state regulators will not tolerate unfair practices.

Utah Attorney General Sean Reyes told reporters that the state-led probe is independent of an antitrust probe of market-leading tech companies announced by the DOJ in July. However, he said it is "possible" that the coalition could share information with the DOJ and that the group has discussed antitrust issues with tech companies with Makan Delrahim, head of the DOJ's antitrust division.

Ravnsborg also told reporters that the timeline for the investigation is unclear at this point.

The Google investigation is not the first joint action against a large technology company by state officials. Facebook Inc. is facing a similar probe. The attorneys general of at least eight states and the District of Columbia are investigating whether the social media company abused its dominant market position to engage in anti-competitive behavior.

In addition to the DOJ's probe, there is scrutiny at the federal level. Specifically, Facebook disclosed in July that it was being investigated by the U.S. Federal Trade Commission for antitrust concerns, shortly after it agreed to pay a $5 billion fine to settle FTC-documented privacy violations.

The FTC in February also announced that it had formed a task force to monitor competition in U.S. technology markets.