On Wednesday, a coalition of 16 states, and the Commonwealth of Puerto Rico, filed a second amended complaint in the Eastern District of Texas against Google LLC for allegedly violating several state and federal antitrust laws for anticompetitive practices. The states claimed that Google manipulated advertising auctions by using targeted digital advertising with user’s personal information.
The states warned that “the open internet is now threatened by a single company.” The attorneys general claimed that “Google’s anticompetitive conduct has adversely and substantially affected the Plaintiff States’ economies, as well as the general welfare in the Plaintiff States.” This is because Google’s alleged illegal conduct “has reduced competition, raised prices, reduced quality, and reduced output,” the filing claimed. Google reportedly plans to create a “walled garden” that will give users a smaller, curated section of the open Internet, thus restricting their users from viewing the creations of their competitors.
The second amended complaint doubles down, focusing on Google’s advertising practices, claiming that “Google leverages intimate user data and personal information to broker billions of daily online ad impressions between publishers and advertisers that target individual users based almost entirely on their personal information,” which is known to “deceive” users. Google also allegedly uses its ad exchange to “unlawfully foreclose competition in the exchange market by controlling publishers’ inventory through its ad server.”
The states also said that Google owns the “largest” buy-side middlemen for advertisers, effectively allowing them to control both ends of their advertising scheme; so, they have a monopoly in the publisher ad server market and the exchange market which are purportedly violations of the Sherman Antitrust Act. Google also uses YouTube, which it owns, to have “market power in the instream online video advertising market.”
In a largely redacted section, the attorneys general described methods in which Google allegedly forced companies to license their advertising software and completely enclose the advertising market, with the help of an “unlawful agreement” with Facebook. This is because “Facebook agreed to shift from routing bids through header bidding to routing bids through Google’s ad server in exchange for a number of special auction advantages.” As a result, prices in the advertising market have risen dramatically which the attorneys general claimed hurts the economies of their states, and harms innovation nationwide.
The attorneys general are suing on the counts of a monopolization, attempted monopolization, unlawful tying, and an unlawful agreement, all in violation of Section 2 of the Sherman Act, supplemental state law antitrust claims, and supplemental state law deceptive trade practices claims.
The plaintiffs are seeking injunctive and structural relief to “restore competitive conditions in the relevant markets affected by Google’s unlawful conduct,” declarations that Google has violated Section 2 of the Sherman Act and supplemental state laws, disgorgement of ill-gotten monies and personal data taken from users, enjoinment, monetary relief, civil penalties and fines, attorney’s fees and costs, and other relief, with 96 claims for relief in total.
The states and Commonwealth of Puerto Rico are represented by their respective attorneys general offices. Texas, Idaho, North Dakota and South Dakota are also represented by Kellner Lenker PC and The Lanier Law Firm P.C.