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Utah joins second lawsuit targeting search giant Google

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A Google receptionist works at the front desk in the company’s office in New York.

In this file photo, a Google receptionist works at the front desk in the company’s office in New York.

Mark Lennihan, Associated Press

SALT LAKE CITY — Utah is part of an 11-state coalition that announced a new federal lawsuit Wednesday targeting alleged anti-competitive business practices of search giant Google.

The Utah Attorney General’s Office said the suit, filed in U.S. District Court in Texas, includes claims that Google engaged in “anti-competitive conduct, exclusionary practices and deceptive misrepresentations” in connection with its digital advertising operations, entered into an anti-competitive contract with Facebook and “suppressed competition” that harmed consumers.

Attorney General Sean Reyes described Google as a company driven by greed that has flouted the rule of law.

“To the detriment of competitors and consumers, Google has strayed from its founding motto of ‘Don’t be evil’ by displaying naked greed and a disdain for the law in its pursuit of absolute market dominance,” Reyes said in a statement. “Rather than relying on innovation and merit in an open market, Google has chosen to attempt to crush all competition with a concerted scheme that few in the public understand.”

Google and Facebook did not immediately respond to Deseret News requests for comment.

A Google spokesperson told the Wall Street Journal that the action, first announced Wednesday by Texas Attorney General Ken Paxton, is without merit.

“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” the spokesperson said in a statement. “We’ve invested in state-of-the-art ad tech services that help businesses and benefit consumers.

“We will strongly defend ourselves from his baseless claims in court.”

The filing alleges Google has established a dominance of the online advertising that has allowed the company to exert monopoly power over the market in lieu of innovation as a driver.

“Google, however, did not accrue its monopoly power through excellence in the marketplace or innovations in its services alone,” the filing claims. “Google’s internal documents belie the public image of brainy Google engineers having fun at their sunny Mountain View campus while trying to make the world a better place. Rather, to cement its dominance across online display markets, Google has repeatedly and brazenly violated antitrust and consumer protection laws.

“Its modus operandi is to monopolize and misrepresent.”

Wednesday’s action follows another federal lawsuit filed in October that has a separate multistate coalition partnering with the U.S. Department of Justice with a different set of allegations focused on contracts that establish Google as the default search engine for some devices.

Lawmakers and consumer advocates have long accused Google — whose corporate parent Alphabet Inc. has a market value of just over $1 trillion — of abusing its dominance in online search and advertising to stifle competition and boost its profits. Critics contend that multibillion-dollar fines and mandated changes in Google’s practices imposed by European regulators in recent years weren’t severe enough and that structural changes are needed for Google to change its conduct.

In response to the October filing, Kent Walker, Google senior vice president of global affairs, wrote in a blog post that the DOJ complaint was “deeply flawed.”

“People use Google because they choose to, not because they’re forced to, or because they can’t find alternatives. 

“This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use.”

Utah Attorney General Sean Reyes answers a question during a debate on Oct. 21, 2020.

Utah Attorney General Sean Reyes, a Republican, answers a question as he debates defense attorney Greg Skordas, a Democrat, in the KSL studios in Salt Lake City on Wednesday, Oct. 21, 2020.

Scott G Winterton, Deseret News

Last week, Reyes announced Utah was participating in a massive antitrust lawsuit targeting Facebook that includes the Federal Trade Commission and 48 states and districts.

That action alleges the search giant used its enormous financial wherewithal to simply purchase competitive companies — like WhatsApp and Instagram — before they grow large enough to become serious competition.

“Facebook systematically plotted to change the competitive market of social media, and its actions are a blatant profit and power grab,” said Utah deputy attorney general and antitrust section director David Sonnenreich in a statement last week. “When Facebook entered the social media market, it was highly competitive and consumer privacy was paramount. Today Facebook dominates the social media market because it bought or crushed the competition, and consumer privacy is no longer prioritized by Facebook.

“This lawsuit seeks to restore competition to the market for social media. Consumers win when companies compete; that is true even when services appear to be free but consumers are ‘paying’ with their data.”

Jennifer Newstead, Facebook vice president and general counsel, pushed back on those claims, writing in a blog post that the complaint was simply an effort to reargue long-settled issues and noted federal agencies conducted reviews, and issued approvals, of both the WhatsApp and Instagram deals without issue.

“Now, many years later, with seemingly no regard for settled law or the consequences to innovation and investment, the agency is saying it got it wrong and wants a do-over,” Newstead wrote. “In addition to being revisionist history, this is simply not how the antitrust laws are supposed to work. No American antitrust enforcer has ever brought a case like this before, and for good reason.

Contributing: Associated Press

Correction: An earlier version incorrectly cited U.S. District Court in Washington, D.C., as the filing venue for the new lawsuit. The action was filed in U.S. District Court in Texas.