10 US States Accuse Google of Ad Market Collusion With Facebook

Prosecutors claim that the two online ad giants cut a deal to give each other preferential treatment.

Ten US states, led by Texas, have filed suit against Google parent Alphabet Inc, accusing it of working with Facebook to unlawfully boost its “monopolistic power” in online advertising.

In the lawsuit, which was filed in the Eastern District of Texas, the states accuse of Google of breaking antitrust law by allowing its own exchange to win ad auctions even when others bid higher and overcharging publishers for ads. The suit also accuses Google of working with Facebook to unlawfully stifle competition.

Google and Facebook are each other’s largest competitors in online ad sales, controlling half of the global market between them. Texas’s antitrust complaint points to a publicised deal the two companies made in 2018 to give Facebook’s advertiser clients the option of placing ads in Google’s network of publishing partners, alleging that Google also gave Facebook undisclosed preferential treatment in return for Facebook backing down from supporting competing software.

“As internal Google documents reveal, Google sought to kill competition and has done so through an array of exclusionary tactics, including an unlawful agreement with Facebook, its largest potential competitive threat,” the lawsuit said.

The nine states that joined Texas in the lawsuit are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah. All have Republican prosecutors.

A Google spokesperson said the company will defend itself from the prosecutors’ “baseless claims in court.”

“Digital ad prices have fallen over the last decade,” the spokesperson said. “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.”

In a separate lawsuit launched against Google on Wednesday, which seeks class action status, online publishers Genius Media Group and The Nation alleged that they lost revenue due to Google’s dominance in online advertising and demanded that Google divest part of its ads business.

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