Another Day, Another Antitrust Lawsuit For Google:

Legal Issues

from the let-me-rest dept

So, just as I was finishing off the post on Wednesday’s antitrust lawsuit against Google brought by 10 states, news broke that the other big state antitrust case against Google had been filed as well. This one involves 38 states, led by Colorado and Nebraska. I’m assuming that this is the main state antitrust lawsuit that states had been talking about, as compared to the first lawsuit with fewer states. Whereas the first state lawsuit focused on display ads, this one focuses on the market for search.

You can read the full filing, which I’d recommend. I think this one is the most interesting of the three antitrust lawsuits that have been filed against the company. Part of the argument more or less rehashes the DOJ’s weak case that because Google pays Apple an astounding amount of money to be the default search on iPhones, that’s proof of anti-competitive behavior. That’s an argument that still just doesn’t make any sense to me at all. If the accusation is that Google is abusing its position, you’d think it wouldn’t be paying $8 to $12 billion dollars to Apple. If anything, that suggests that it’s Apple who has the market power, rather than Google.

Where the case gets potentially more interesting is in the part where it argues that Google is abusing its search advertising tool, called SA360, in anticompetitive ways:

Advertising tools that optimize companies? search advertising purchases have become increasingly important to advertisers. Google?s own search advertising tool, SA360, serves more advertisers than any other tool. Such tools can promote competition in search advertising by, for example, allowing easy comparison of competing offers.

Google has consistently assured advertisers that it would operate SA360 in a neutral manner. But Google harms competition by refusing interoperability to comparable advertising features offered by Microsoft?s Bing general search engine. Instead, Google continuously favors advertising on its own platform and steers advertiser spending towards itself by artificially denying advertisers the opportunity to evaluate the options that would serve those advertisers best. No technical or operational barrier prevents SA360 from providing advertisers with direct and interoperable access to relevant data and important functionality from multiple general search engines.

But the details here matter. If Google is being misleading about SA360, then that seems like it should be an FTC false advertising claim, rather than strictly an antitrust claim. But also, it’s odd that the lawsuit seems to insist that refusing to interoperate with the company’s main competitor in search, Bing, is somehow proof of anticompetitive behavior. I’d love it if there were a lot more interoperability, but I’m not sure this alone trips a real antitrust concern.

The lawsuit also goes down a weird well in claiming that suppressing “specialized search” sites is anti-competitive. There have been a few such sites that have complained about such things, but generally speaking those are spam sites. The reason that Google demoted them was that they made the Google search process worse, by sending you not to the results users were looking for, but to one of those specialty search engines that had good enough SEO to rank high in Google. That was very much a bad customer experience. But, the complaint argues that Google treats companies differently in way that is potentially problematic:

To artificially foreclose this opportunity and maintain its search-related monopolies, Google takes advantage of the fact that it has already banished rival general search engines to the fringes of the search-related markets, which has fostered an artificial dependence by specialized vertical providers on Google as a way to acquire customers. Doubling down on its exclusionary conduct, Google takes advantage of certain specialized vertical providers? dependence on Google, treating them differently than participants in other commercial segments and further limiting their ability to acquire customers.

Google has already responded to the lawsuit by saying that it can defend all these decisions as making the product better for its users. And it’s going to need to really prove that, because there do remain some decisions that are, at the very least, headscratching (like Google using only its own local listings for the carousel, rather than using the wider ecosystem of sites).

Of the three antitrust lawsuits filed against Google so far, this one strikes me as the most serious (with the caveat that some of the redacted parts of the other lawsuit filed this week sound pretty explosive, but the key details are all redacted, so it’s tough to tell). The DOJ’s lawsuit remains (by far) the weakest of the bunch.

I am assuming that these lawsuits will eventually be combined in some form. NY’s Attorney General had original said that the intention of this latest lawsuit was to be combined with the DOJ’s. It seems possible that all three lawsuits will be merged into one massive lawsuit. This latest one still has some problems, but the lawyering is much better than the DOJ’s and the end result of this case will likely be the most interesting to watch concerning the future of search and search advertising.

Filed Under: antitrust, colorado, competition, nebraska, search, search advertising
Companies: google