38 attorneys general sue Google for alleged anticompetitive practices
A bipartisan coalition of attorneys general representing 38 U.S. states and territories is suing Google LLC for allegedly using anticompetitive business practices to boost its search business.
The company, the coalition wrote in a lawsuit filed today, has been pursuing a strategy aimed at “building an impenetrable moat to protect its kingdom.” The lawsuit, the second in 24 hours and the third in recent months, singles out three tactics in particular with Google is being accused of stifling competition in the search market.
The first tactic is the Alphabet Inc. subsidiary’s use of agreements with partners such as mobile device makers to make its search engine the default search tool on handsets and in browsers. As an example, the attorneys general point to public estimates claiming that Google is paying Apple Inc. $8 billion to $12 billion annually to make its search engine the default choice on iOS. Through such deals, the lawsuit charges, Google “erected artificial barriers to prevent general search competitors from reaching consumers.”
The second business practice flagged by the coalition has to do with a service called Search Ads 360 that Google provides to marketers. The service helps brands optimize their search-based advertising campaigns. Google, the attorneys general argue, has promised marketers that it would operate Search Ads 360 in a neutral manner but in reality is “refusing interoperability to comparable advertising features offered by Microsoft’s Bing general search engine.”
The third point focuses on Google’s relationship with so-called vertical providers. The term refers to platforms such as travel booking websites that provide a search function as part of their feature sets.
The attorneys general write in the suit that specialized vertical providers generally rely on Google for 30% to 40% of their traffic. As a result, the suit goes on to argue, such companies must buy search ads from the Alphabet subsidiary to acquire customers. Those ads have “become more expensive — and more restrictive — than it would be in a more competitive market,” according to the attorneys general.
“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,” said Phil Weiser, Colorado’s attorney general, who is co-leading the bipartisan group suing Google along with Nebraska attorney general Doug Peterson.
“This lawsuit demands changes to the design of Google Search, requiring us to prominently feature online middlemen in place of direct connections to businesses,” Adam Cohen, Google’s director of economic policy, wrote today in a blog post responding to the suit. “Redesigning Google Search this way would harm the quality of your search results. And it would come at the expense of businesses like retailers, restaurants, repair shops, airlines and hotels whose listings in Google help them get discovered, and connect directly with customers.”
The lawsuit comes just a day after Google was sued by a group of state attorneys for allegedly using anticompetitive practices in the advertising technology market. Earlier, the Department of Justice filed its own case against Google that accuses the company of locking rival search engines out of growth opportunities.
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