Following on news of the state’s participation in a major antitrust lawsuit against Facebook, Colorado is now going after another tech giant for anticompetitive practices.
Colorado Attorney General Phil Weiser on Thursday announced that his office will lead a coalition of 38 attorneys general in an antitrust lawsuit against Google. The lawsuit alleges Google violated Section 2 of the Sherman Act in using its monopoly power in search and search advertising to box out its competition and, as a result, harm consumers and advertisers.
According to a press release from the Attorney General’s Office, Google uses its power over general search engines and related general search advertising markets through a series of anticompetitive contracts and conduct. Consumers are denied the benefits of competition, and advertisers are harmed through lower quality and higher prices that are, in turn, passed along to consumers.
“Our economy is more concentrated than ever, and consumers are squeezed when they are deprived of choices in valued products and services. Google’s anticompetitive actions have protected its general search monopolies and excluded rivals, depriving consumers of the benefits of competitive choices, forestalling innovation, and undermining new entry or expansion,” Weiser said in the press release. “This lawsuit seeks to restore competition.”
The states’ investigation was led by an executive committee made up of the attorneys general of Arizona, Colorado, Iowa, Nebraska, New York, North Carolina, Tennessee and Utah.
The complaint paints a picture of Google ruling over its internet domain and asserting its power through use of virtual “moats” and “banishing” competitors. “As the gateway to the internet, Google has systematically degraded the ability of other companies to access consumers,” the complaint states.
According to the complaint, close to 90% of all internet searches done in the U.S. use Google, while no other search engine has more than 7% of the market. Google maintains that monopoly through its data-collection infrastructure, the attorneys general say.
The complaint alleges that Google “blunts and burdens” competitive threats that could offer alternative and innovative ways to search and navigate the internet — such as through voice-based internet searching or using smart speakers or inter net-connected cars. Methods of doing so involve using its financial power to limit the number of consumers who use competitors through exclusionary contracts; using its ubiquitous SA360 search engine marketing tool to disadvantage competitors; and limiting some potential competitors from prominently displaying brand names or links to their websites in ads, which would encourage customers to bypass Google’s search engine and go directly to a rival site.
Google currently faces another lawsuit filed Oct. 20 by the U.S. Department of Justice and 11 other states that also allege Google violated the Sherman Act by maintaining its monopoly power in search and search advertising through the use of exclusionary contracts.
The coalition of states ask the court to halt Google’s illegal conduct and restore a competitive marketplace. The states also seek to unwind any advantages that Google gained as a result of its anticompetitive conduct, including divestiture of assets as appropriate.
The complaint was filed in the U.S. District Court for the District of Columbia, in conjunction with a motion to consolidate seeking to combine the states’ case with the pending U.S. DOJ case.
Google also faces another lawsuit filed Wednesday in a federal court in Texas by that state’s attorney general and those of eight other Republican-led states. According to that complaint, “Google sought to kill competition,” and the states also allege the company strives to keep its monopoly power through exclusionary tactics, “including an unlawful agreement with Facebook, its largest potential competitive threat, to manipulate advertising auctions.”
The Texas complaint includes a long list of requests for relief, including monetary damages and civil fines; injunctive relief to restore competitive conditions in Google’s markets; measures to prevent future antitrust practices from the company; and to disgorge all money received through deceptive trade practices.
The three suits come amid heightened scrutiny of tech giants’ business practices and calls in the House Judiciary Committee for a review of antitrust laws, as previously reported by Law Week.
— Tony Flesor
