10 States Sue Google Over Digital Advertising Dominance

Attorneys general from 10 states sued Google on Wednesday for alleged antitrust violations related to its ad stack, popularly known as DoubleClick. Texas Attorney General Ken Paxton, who has led a lengthy investigation into the technology company, announced the lawsuit in a video posted to Twitter. Additional states joining the complaint are Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah and Idaho. https://twitter.com/TXAG/status/1339283520099856384?s=20 "The state of Texas is filing a multistate lawsuit against Google for anticompetitive conduct, exclusionary practices and deceptive misrepresentations," Paxton said the video. "Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions, and [carry out] a tremendous violation of justice." The state charges were filed less than two months after the U.S. Department of Justice filed its own antitrust lawsuit against Google, which took aim at Google's search and search advertising empire. Google defended itself against the earlier suite of charges, claiming, "people use Google because they choose to." But this new antitrust case from the state AGs asserts that Google unfairly uses its market dominance to manipulate publisher pricing, and thus impacts consumers. "Nearly all of today’s online publishers (be they large or small) depend on one company—Google—as their middleman to sell their online display ad space in 'ad exchanges,'" the plaintiffs wrote in their complaint. In his announcement video, Paxton alluded to how his case would focus on how Google's 2007 purchase of DoubleClick, which is now housed within the Google Marketing Platform, helped it build an empire using anticompetitive practices that edges out both rival ad-tech providers and yields poorer ad returns for publishers. "Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions and a tremendous violation of justice," he said. In the complaint, the plaintiffs claim that Google overwhelmingly controls the display advertising market for publishers online through its Google Ad Manager (GAM): "Google originally acquired its publisher ad server in 2008 from DoubleClick. Today, GAM controls over 90 percent of this product market in the United States." Texas previously joined the federal government's own antitrust suit, and while there's been bipartisan consternation about Google, only Republican-led states have joined the two Google antitrust suits. One source previously told Adweek that legal authorities can merge the new suit with the preexisting charges from the DOJ or otherwise coordinate with the federal agency in the interest of judicial efficiency. The Google suits are part of a wider tech backlash in Washington. A group of 48 states and the Federal Trade Commission sued Facebook last week, accusing it of illegally acquiring competitors including Instagram and WhatsApp. Additionally, the House Judiciary Committee's Antitrust Subcommittee issued a lengthy report this summer calling Amazon, Apple, Facebook and Google illegal monopolies. But today's suit is the first legal action that's zeroed in on the breadth of a leading tech company's digital ad dominance. What will be in the crosshairs? Authorities investigating Google’s display advertising have sought expertise from several consultants in the space, with sources indicating that investigators are looking at just how compatible the individual elements of its suite of online advertising tools are with those offered by competitors. In a recent academic paper, Dina Srinivasan, a fellow with the Thurman Arnold Project at Yale University, which produces research on competition policy as well as antitrust enforcement, noted how Google’s dominance in both search and display advertising are interrelated. According to Google's growing chorus of critics, there are two major concerns regarding the DoubleClick suite: interoperability with rival tech providers, plus the concept of "tying" one element of its offering to another (see video). https://www.youtube.com/watch?v=3t2o5wbiTZM Earlier in the year, it was reported that regulators may seek to force a sale of Google's market-leading Chrome web browser as a means of curtailing the online giant's 37% share of the U.S. online advertising market.