A bipartisan coalition of 35 states, Puerto Rico, the Territory of Guam, and the District of Columbia, have sued Google LLC, accusing it of monopolization under Section 2 of the Sherman Act. Thursday’s complaint explained how the defendant leverages its size, influence, and massive data collection to foreclose competition in the markets for general search services, general search text advertising, and general search advertising.
The filing reported that plaintiffs’ allegations are consistent with, but go beyond, an October complaint filed by the U.S. Department of Justice. A group of Republican attorneys general filed a similar action on Wednesday that focused on advertisements placed on third-party websites. Several of those complainants, Idaho, North Dakota, South Dakota, and Utah, are also parties to the instant lawsuit.
The plaintiffs here focused on three forms of exclusionary and monopolistic anticompetitive conduct. First, the filing avered, Google uses its substantial financial resources to restrict the number of consumers who give business to Google competitors. By way of example, the complaint states, “Google pays Apple between $8 and $12 billion per year to ensure that Google is enthroned as the default search engine on Apple devices, and it limits general search competition on Android devices with a web of restrictive contracts.”
Second, the plaintiffs argued, a product entitled Search Ads 360 (SA360), utilized by many top advertisers, pledges to offer customers a neutral means for comparing Google’s services to others’. In reality, the complaint contends, Google operates SA360, the pack leader, to “severely limit the tool’s interoperability with a competitor, thereby disadvantaging SA360 advertisers.”
Third, the states argued, Google “throttles” consumer traffic to specialized vertical providers. Reportedly, specialized vertical providers offer a search service usually focused on industries like travel, local home services, or shopping and allow customers to transact without redirection to another website.
Though these providers do not directly compete with Google in search-related markets, the plaintiffs claimed that Google still takes retributory action against them. The filing stated that “their success would both strengthen general search rivals with whom they partner and lower the artificially high barriers to expansion and entry that protect Google’s monopolies,” thus leading the defendant to constrict the flow of internet traffic to such sites.
The states asserted that Google has enjoyed monopoly profits at the expense of its rivals, customers, and indirectly, consumers. In summary, the plaintiffs liken Google’s conduct to “building an impenetrable moat to protect its kingdom.” The states are seeking to both alter Google’s behavior and remediate past harms by “reversing the adverse impacts and restoring competition.”
Colorado, Nebraska, Arizona, Iowa, New York, North Carolina, Tennessee, Utah, Alaska, Connecticut, Delaware, Hawaii, Idaho, Illinois, Kansas, Maine, Maryland, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Vermont, Washington, West Virginia, and Wyoming, the Commonwealths of Massachusetts, Pennsylvania, Puerto Rico, and Virginia, the Territory of Guam, and the District of Columbia are represented by their attorneys general.