A bipartisan coalition of states on Thursday became the third group of regulators within two months to file a lawsuit accusing Google (GOOG, GOOGL) of using its monopoly power to violate antitrust laws, as America’s tech giants face increasing scrutiny over their size and power.
Thirty-eight attorneys general led by Colorado and Nebraska filed the suit claiming Google uses its vast wealth and power to control the search market through exclusionary contracts and disadvantaging competitors using its search-engine marketing tool. The suit also claims Google discriminates against specialized search sites like Expedia, Angie’s List, and Yelp by denying them access to “prime real estate” on its search results page.
“Google sits at the crossroads of so many areas of our digital economy and has used its dominance to illegally squash competitors, monitor nearly every aspect of our digital lives, and profit to the tune of billions,” New York Attorney Letitia James said in a statement on Thursday. “Through its illegal conduct, the company has ensured that hundreds of millions of people turn to Google first when looking for an answer, but it doesn’t take a web search to understand that unchecked corporate power shouldn’t have disproportionate control over our data and information.”
The suit comes less than 24 hours after a civil antitrust suit filed by 10 states led by Texas focused on Google’s ad tech business, and less than two months after the Justice Department and 11 Republican state attorneys general filed a civil lawsuit focused on Google’s search and search advertising businesses.
A suit focused on the ‘cornerstones’ of Google’s empire
Each of the antitrust lawsuits targets different business lines within Google’s empire.
The Department of Justice’s case centers on Google’s search and search advertising businesses, claiming it engaged in anti-competitive tactics to maintain its dominance over other market players in general search, search advertising, and general search advertising — a triad of markets the lawsuit characterizes as the “cornerstones” of Google’s empire.
The DOJ’s case goes on to say that Google’s deals to lock in its search tool as a default with device makers like Apple (AAPL) and wireless carriers like Yahoo Finance parent Verizon (VZ) effectively shut out competitors.
Google’s exclusivity deal with Apple includes making the search engine the default option on everything from Apple’s iPhone to its Safari browser and on-device Spotlight search. In exchange, Google pays Apple between $8 billion and $12 billion a year, according to the lawsuit.
California, whose attorney general Xavier Becerra is a Democrat, filed to join the Justice Department’s lawsuit on Friday.
In response to the DOJ’s claim, Google released a statement saying people use the search engine by choice and not by force.
‘The batter, the pitcher, and the umpire’
Wednesday’s Texas-led lawsuit — joined by Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota, and Utah — centers on Google’s ad tech business. The suit claims that Google’s 2008 acquisition of DoubleClick allowed it to position itself on both the buy-side and sell-side of the publisher ad server market, and that it used the positioning to engage in unfair competition.
“Google repeatedly used its monopolistic power to control pricing, engage in market collusion to rig auctions, in a tremendous violation of justice,” Texas Attorney General Ken Paxton said in a video posted on Twitter on Wednesday. “…If the free market were a baseball game, Google positioned itself as the batter, the pitcher, and the umpire.”
The suit targets a deal Google struck with Facebook (FB) — its biggest competitor — to offer the social network favorable ad-auction treatment in exchange for less aggressive competition against the ad giant.
Facebook did not comment on the claims regarding its deal with Google.
A Google spokesperson issued a statement Wednesday calling the ad tech claims “meritless.”
“We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers,” the statement said. “Digital ad prices have fallen over the last decade. Ad tech fees are falling too. Google’s ad tech fees are lower than the industry average. These are the hallmarks of a highly competitive industry. We will strongly defend ourselves from his baseless claims in court.”
Alexis Keenan is a legal reporter for Yahoo Finance and former litigation attorney. Follow Alexis Keenan on Twitter @alexiskweed.
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