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MIT Technology Review

US states are suing Google: here’s what you need to know

A new lawsuit alleges anti-competitive activity by the search giant—including deals with Facebook. Here’s what it claims.
December 16, 2020
Google Ads logo against a red graph lineGoogle Ads logo against a red graph line
Filip Radwanski / SOPA Images/Sipa USA

So what happened? 

Texas and nine other Republican-led states have filed an antitrust lawsuit against Google, alleging that the company has monopolized digital advertising by means that include anti-competitive agreements with Facebook. 

Google, the suit alleges, not only connects ad buyers and sellers; it operates the exchange and manipulates the rules and algorithms to favor its own results. This makes Google “the pitcher, catcher, batter and umpire, all at the same time,” the Texas attorney general claimed in his announcement

How does the lawsuit claim Google and Facebook conspired? 

The lawsuit describes a back-room agreement between Google and Facebook, code-named after Star Wars characters, to manipulate ad auctions in a way that would benefit the two rivals. (The code name itself was redacted, though the Wall Street Journal has since revealed it as “Jedi Blue.”)

“Any collaboration between two competitors of such magnitude should have set off the loudest alarm bells in terms of antitrust compliance,” the lawsuit states. “Apparently, it did not.”

As well as allegedly conspiring with Facebook, the attorneys general claim that Google also manipulated smaller, less threatening publishers, and deceived them about auctions to ensure its dominance. 

Is it true that Google can read my WhatsApp messages?

A lot of attention has been focused on a heavily redacted section of the lawsuit, in which the states allege an exclusive agreement between Google and Facebook, signed shortly after Facebook’s WhatsApp acquisition, “granting Google access to millions of Americans’ end-to-end encrypted WhatsApp messages, photos, videos, and audio files.” 

Because of redactions it is unclear what evidence there is for this claim, but Google is probably not reading your WhatsApp messages. The section may refer to a WhatsApp-Google Drive integration that allowed WhatsApp users to more easily back up their accounts to Drive. The allegation was made as part of Texas’s argument that Google cared about user privacy only when it was convenient and provided good publicity.

Wasn’t there another lawsuit against Google recently? 

The Texas lawsuit follows on an October complaint by the Department of Justice and 11 Republican states, including Texas. It also precedes an expected complaint by Colorado and Nevada, which could be filed as soon as Thursday. 

These are the result of a joint investigation of Google launched in September 2019 involving 48 states, as well as Washington, DC, and Puerto Rico. 

It’s a “divide and conquer strategy,” says Sally Hubbard, the director of enforcement strategy at the Open Markets Institute, an organization that advocates against corporate monopolies, “with different enforcers focusing on different aspects of Google’s monopolization due to resource constraints.” 

The DOJ’s complaint was more narrowly focused on Google’s agreements with mobile device creators and browsers to make its search engine the default, while Thursday’s complaint is expected to focus on how Google changed its design to give it an advantage over more specialized search engines like Yelp, as Politico reported earlier this week. 

Google’s search practices have drawn complaints from competitors and the occasional attention of regulators for years, since its 2008 purchase of ad-tech company DoubleClick led to its “fundamental shift” as a middleman—and eventual monopolist, the suit alleges— for online advertising. 

Attention, however, has not always led to legal action

This has shifted considerably as lawmakers on both sides of the aisle, as well as consumer advocacy organizations, have increasingly criticized Big Tech’s outsize influence on American life.  

What happens next

The flurry of lawsuits—including more that target other aspects of Google’s business—may eventually be consolidated with the DOJ complaints. 

For its part, Google has denied wrongdoing and called Texas’s claims “meritless.”

“We’ve invested in state-of-the-art ad-tech services that help businesses and benefit consumers,” a Google spokesperson said in a statement. “We will strongly defend ourselves from his baseless claims in court.”

It will be quite the fight. Texas says it is seeking to “restore free and fair competition to the markets” as well as achieve “structural, behavioral, and monetary relief”—in other words, a breakup of the search giant.