Ten states have filed an antitrust suit against Google, charging the tech giant of conspiring to form an illegal online advertising monopoly. The action is led by Texas Attorney General Ken Paxton.
In filing the suit, Paxton claims that Google has been deceptive in its effort to corner the market on the ads consumers see on the internet. The suit alleges that the company has also teamed up with Facebook to suppress competition.
In summarizing his complaint, Paxton noted how the internet has revolutionized the way people consume content and the way businesses use advertising. He maintains that Google has crossed the line in taking advantage of it.
“In addition to representing both the buyers and the sellers of online display advertising, Google competes directly against the buyers and sellers they separately represent—all while operating the largest exchange on which these ad products are bought and sold,” Paxton said in a statement. “Google’s exchange trades in billions of ad impressions a day.”
Denial from Google
Facebook did not offer a comment on the lawsuit, but Google rejected its claims and insisted that it operates in highly competitive markets.
“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” a Google spokesperson told The Wall Street Journal. “We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers. We will strongly defend ourselves from his baseless claims in court.”
Google already faces a federal antitrust suit. In October, the U.S. Justice Department leveled similar but less specific charges in its suit, claiming that Google abused its industry dominance to suppress competition in online search and search advertising.
For its part, Facebook was sued last week by the Federal Trade Commission (FTC) and 47 states over claims that the social media company has become an advertising monopoly by acquiring competitors.
Enormous amounts of data
The nature of online advertising makes it extremely powerful and lucrative. Unlike traditional media advertising, businesses advertising online get enormous amounts of data about who sees their ads, allowing them to narrowly target their ad spending.
Consumers who search for information about a specific product will see ads for that product pop up on other websites they visit for weeks afterward. Apple’s recent privacy changes strike at the heart of this form of advertising.
Apple says it will require apps and platforms like Facebook to get consumers’ permission to show ads on websites owned by other companies. That provoked an angry response from Facebook this week.
How all of this plays out, and how it changes the internet, could very well take place in the coming year.