Coalition of States Amend Antitrust Complaint Against Google

On Monday, the coalition of states, led by Texas, filed their First Amended Complaint in the Eastern District of Texas against Google, alleging antitrust violations through Google’s efforts to boost its dominant advertising business. The 166-page redacted complaint adds more information against Google, including new allegations about Google’s alleged use of its Chrome browser, recent Chrome privacy updates, dubbed Privacy Sandbox, and the ways in which Google hindered ad competition, including its anticompetitive agreement with Facebook.

Previously, the states filed an antitrust lawsuit against Google in December for its anticompetitive practices and deceptive misrepresentations regarding its monopolization of the online advertising industry. Since then, Alaska, Florida, Montana, Nevada, and Puerto Rico joined the states’ suit. The states’ lawsuit came after the Department of Justice sued Google in October for its purported monopolization of various markets, including general search services, search advertising, and general search text advertising, which the government alleged it gained through anticompetitive and exclusionary conduct. In December, Google also faced its third major lawsuit led by Colorado that alleged that Google used its size, influence, and massive data collection, for example to manipulate search results and harm competition.

The amended complaint focuses on Google’s technology for targeted ads, as did the original complaint. The attorneys general allege that Google used its market power to foreclose independent advertising platforms, which forced businesses to use its platform. Additionally, the attorneys general criticize Google’s Privacy Sandbox, a new tool for Chrome designed to replace third-party cookies, with Google’s more limited system. This allegedly came about because of regulatory concern “about the extent to which firms like Google tracked consumers.”

According to the amended complaint, “Google’s new scheme is, in essence, to wall off the entire portion of the internet that consumers access through Google’s Chrome browser.” The attorneys general contend that “the changes are anticompetitive because they raise barriers to entry and exclude competition in the exchange and ad buying tool markets, which will further expand the already-dominant market power of Google’s advertising businesses.” Furthermore, the “new scheme” is allegedly anticompetitive “because it coerces advertisers to shift spend(ing) from smaller media properties … to large dominant properties like Google’s.” As a result, the states argue that the new plan would likely make Google’s advertising system more attractive, which is purportedly problematic given its already dominant market power. The attorneys general add that “Google is trying to hide its true intentions behind a pretext of privacy” because “Google does not actually put a stop to user profiling or targeted advertising – it puts Google’s Chrome browser at the center of tracking and targeting.”

The lawsuit also accuses Google of violating the law in regards to how it places ads online. The states aver that Google created an alternative to header bidding in an effort to remove competition, however, Google’s alternative “stacked the deck in Google’s favor” by creating Exchange Bidding (later called Open Bidding), which was “a way to foreclose exchange competition.” Google allegedly excluded the competition from its Exchange Bidding, for example, by hindering their ability “to identify users associated with publishers’ ad space in auctions” and “charging publishers an additional 5 to 10 percent penalty fee for selling inventory in a non-Google exchange,” among other alleged anticompetitive measures. Additionally, the attorneys general allege that Google and Facebook have a secret advertising agreement to also reduce competition, which has caused some publishers to sue the companies.

The attorneys general seek a variety of relief, including an injunction, monetary relief, disgorgement of ill-gotten monies and consumer data, civil penalties and fines, costs and fees, and other relief.

The states are represented by the respective attorneys general office. Additionally, the states of Texas, Idaho, South Dakota, and North Dakota are represented by Keller Lenkner LLC and The Lanier Law Firm P.C.