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Utah A.G. announces 2nd Google lawsuit in 2 days, calls for breakup of search giant

SHARE Utah A.G. announces 2nd Google lawsuit in 2 days, calls for breakup of search giant

In this Nov. 10, 2010 file photo, the company logo is displayed at Google headquarters in Mountain View, Calif.

Paul Sakuma, Associated Press

SALT LAKE CITY — Utah Attorney General Sean Reyes revealed news of another multistate lawsuit alleging Google has engaged in anti-competitive business practices — the second filing targeting the search giant in as many days.

The action announced Thursday, which includes 38 states and districts including Utah, was filed in U.S. District Court in Washington, D.C. Some claims in the filing are similar to another Google lawsuit filed in October that includes the U.S. Department of Justice and multiple states, but not Utah.

Other parts of the complaint, however, take different tacks from both the October filing and the action announced on Wednesday.

Reyes said Google has shifted from being a company focused on innovation to fuel growth to one that unfairly wields its market power.

“If Google will stop its abusive practices, we have no problem allowing the company to innovate and thrive,” Reyes said in a statement. “Google should be credited for a number of things it’s done right in the market. But it should leverage its ‘right’ not ‘might’ going forward.”

According to Reyes’ office, new allegations in the suit include:

  • Google cements itself as the go-to search engine on computers and mobile devices by using exclusionary agreements and other practices to limit the ability of rival general search engines and potential rivals to reach consumers.  
  • Google disadvantages users of its search-advertising management tool, SA360, by promising that it would not favor Google search advertising over that of competing search engines such as Bing, when in reality Google continuously favors advertising on its own platform, inflating its profits to the detriment of advertisers and consumers.  
  •  Google discriminates against specialized search sites — such as those that provide travel, home repair or entertainment services — by depriving them access to prime computer and cellphone “real estate” because these competing sites threaten Google’s revenue and dominant position.

Reyes said consumers should not be fooled by products, like Google search, that appear to be free but come with hidden costs.

“We as regulators, and some of us as former tech lawyers and innovators, realize that popular Google products and services which appear to be free but that really come with a cost in terms of the valuable data that consumers provide to Google,” Reyes said in a statement. “Google should be allowed to generate revenues appropriately. But while no products are ever really ‘free,’ the markets should always remain so.”

Google economic policy director Adam Cohen responded to the latest legal action in a blog posting published on the company’s website Thursday evening. He said the issues being raised by the multi-state group of plaintiffs have previously been reviewed and dismissed by regulators in the U.S. and abroad.

“The claims being made have been closely examined and rejected by regulators and courts around the world, including the U.S. Federal Trade Commission, competition authorities in Brazil, Canada and Taiwan, and courts in the United Kingdom and Germany, who all agreed that our changes are designed to improve your search results,” Cohen wrote. “It’s also well established that the most important driver for our search results is the specific query — not your personal data.

“We know that scrutiny of big companies is important and we’re prepared to answer questions and work through the issues. But this lawsuit seeks to redesign Search in ways that would deprive Americans of helpful information and hurt businesses’ ability to connect directly with customers.”

A Google spokesperson told the Wall Street Journal that the action filed Wednesday, first announced 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.”

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.”

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 social media giant used its enormous financial wherewithal to simply purchase competitive companies — like WhatsApp and Instagram — before they grow large enough to become serious competition.