Texas’ state attorney general has announced new antitrust charges against Google, focusing on the company’s ad tech practices.
In a bizarre video posted to the office’s verified Twitter account, Texas AG Ken Paxton says the company “repeatedly used its monopolistic power to control pricing” in online ads. “These actions harm every person in America,” Paxton continues. “It isn’t fair that Google can harm the web pages you visit and read.”
#BREAKING: Texas takes the lead once more! Today, we’re filing a lawsuit against #Google for anticompetitive conduct.
This internet Goliath used its power to manipulate the market, destroy competition, and harm YOU, the consumer. Stay tuned… pic.twitter.com/fdEVEWQb0e
— Texas Attorney General (@TXAG) December 16, 2020
The complaint specifically takes issue with Google’s historical requirements for publishers, whether limiting them to a single exchange or extracting licensing fees for the use of Google ad servers.
The most detailed allegation is that Google used its market power to sabotage “header bidding,” a practice that allows advertisers to route a single request through multiple exchanges at once. “Google viewed header bidding’s promotion of genuine competition as a major threat,” the complaint alleges, citing internal communications obtained as part of the probe.
Google eventually adopted the practice, allowing its ad server to route requests through multiple exchanges at once. But according to the complaint, Google rigged that system to rout requests to its own exchange, even when a competitor had submitted a higher bid. Google allegedly codenamed this effort after a character from the Star Wars films, although the specific character is redacted in the filing.
Eight other Republican-led states have joined the lawsuit, including Missouri, Kentucky, and Indiana. Some collaborating states reportedly left the lawsuit after several members of Paxton’s staff accused him of accepting bribes, triggering a broader crisis within the state office. More recently, Paxton’s office has hired private law firms specifically to work on the Google case.
Since the complaint has not appeared in official filings, it is also unclear what specific charges Google will face. Paxton’s office did not respond to a request for clarification. The office’s preliminary probe largely examined Google’s dominance of the online ad marketplace, particularly its recent ad tech acquisitions, so it is expected that the case will follow suit.
Reached for comment, Google denied the claim that digital ad markets are suffering from consolidation, citing recent declines in prices and fees. “Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” a company representative said. “Digital ad prices have fallen over the last decade. Ad tech fees are falling too. Google’s ad tech fees are lower than the industry average. These are the hallmarks of a highly competitive industry.
Today’s case joins a number of parallel antitrust cases being brought against the tech giant. In October, the Department of Justice filed antitrust charges focusing specifically on Google’s contracts with companies like Apple and Mozilla to maintain its dominance in search. Texas has also joined that case as a co-plaintiff.
A third case led by Colorado’s state attorney general is also rumored to be close to filing. The Colorado case would focus on how Google’s search engine design has disadvantaged rivals like Yelp and Genius that also offer competing information services. A recent Politico report said a complaint could be filed “as soon as Thursday,” citing two people close to the probe.
4:00PM ET: Updated to include the official complaint filed against Google, with clarifications throughout.
