Texas leads multi-state antitrust lawsuit against Google over ad tech

Google headquarters in Mountain View, California.

Stephen Shankland/CNET

A group of ten states led by Texas Attorney General Ken Paxton on Wednesday filed an antitrust lawsuit against Google for allegedly anticompetitive practices in online advertising.

The lawsuit accuses the tech giant of harming competitors by engaging in “false, deceptive, or misleading acts” while operating its buy and sell auction system for digital ads. The complaint also alleges Facebook was a “co-conspirator” to Google, as the two tech giants struck an unlawful agreement to manipulate advertising auctions.

The other nine other states joining Texas in the case are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.

“This Goliath of a company is using its power to manipulate the market, destroy competition and harm you, the consumer,” Paxton said in a video posted to Twitter. “Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions in a tremendous violation of justice.”

Google on Wednesday denied it engaged in anticompetitive behavior. “Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts. We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers,” a spokesman said in a statement. “We will strongly defend ourselves from his baseless claims in court.”

The tech giant’s online advertising operation is the cornerstone of its business, generating the vast majority of its $160 billion in annual revenue. The company has been criticized because it owns every step in a complicated system that connects ad sellers and buyers. Rivals say the process gives Google an unfair edge over the market. Much of the company’s advertising prowess comes from acquisitions, including the 2008 buyout of the ad tech firm DoubleClick.

The lawsuit follows a landmark antitrust case filed against Google in October by the US Department of Justice. That complaint narrowly targets Google’s contracts with other companies, like Apple and Samsung, to be the default search engine on their devices, a move that allegedly boxes out competitors.

The announcement from Paxton comes as the Texas Republican has drawn controversy of his own. Paxton faces accusations that he used his office to illegally interfere with an FBI investigation into a campaign donor. The FBI is reportedly probing those claims. Paxton has denied any wrongdoing.

More antitrust scrutiny could be coming for Google. A different group of states is expected to file yet another lawsuit against the company as soon as Thursday, focusing on its handling of search results and how they could harm competitors.

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