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US states file antitrust lawsuits over Google’s ad tech, how competitors appear in Search [Updated]

In October, the Justice Department alleged that Google paying device makers and browser vendors to make Search the default was monopolistic. States are now filing and preparing their own antitrust lawsuits focused on Google’s ad business and Search ranking.

Update 12/17: The second state-level lawsuit is here from 38 attorneys general: Colorado, Nebraska, Arizona, Iowa, New York, North Carolina, Tennessee, Utah, Alaska, Connecticut, Delaware, Hawaii, Idaho, Illinois, Kansas, Maine, Maryland, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, Washington, West Virginia, and Wyoming, Massachusetts, Pennsylvania, Puerto Rico, and Virginia, as well as Guam and the District of Columbia.

There are three main arguments today, starting with and furthering the DOJ suit’s contention that Google’s use of “exclusionary contracts” have stopped competitors from creating a rival search engine:

As alleged in the complaint, Google is employing the same exclusionary contracting tactics to extend its search-related monopolies into the emerging ways consumers access general search engines, such as through their home smart speakers, televisions, or their cars.

It’s also accused that “Google hinders consumers’ ability to access information provided by specialized vertical providers.” Travel, home improvement, and entertainment are specifically cited, with the company said to be prioritizing its own offerings.

The third argument is that Google’s Search Advertising 360 (SA360) advertising tool is not neutral and prevents “interoperability with competing search engine advertising features.”

In response to the October suit, Google said that people naturally seek out Search, while arguing that the deals are just common promotion tactics that have real-world analogies.

Original 12/16: Led by Texas, today’s lawsuit includes Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota, and Utah. It alleges that Google has monopoly power in the following markets: publisher ad servers, display ad exchanges, display ad networks, and ad buying tools for small and large businesses.

A baseball analogy was made to Google being the “pitcher, batter, and umpire, all at the same time.” It’s accused of violating federal and state antitrust laws, thus harming innovation and consumers. The complaint cites one key event:

The fundamental change for Google dates back to its 2008 acquisition of DoubleClick, the leading provider of the ad server tools that online publishers, including newspapers and other media companies, use to sell their graphical display advertising inventory on exchanges. As the new middleman between publishers and exchanges, Google quickly began to use its new position to exert leverage.

Conduct cited as being anticompetitive includes licensing fees, blocking exchange competition, and requiring the use of its first-party offerings. It’s also claimed that Google had an arrangement with Facebook to limit ad competition.

Google, in a statement to The New York Times, refutes the claims and calls them “meritless.” Google also told The Verge that “digital ad prices have fallen over the last decade,” and that there is plenty of competition.

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Avatar for Abner Li Abner Li

Editor-in-chief. Interested in the minutiae of Google and Alphabet. Tips/talk: