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10 States Accuse Google of Abusing Monopoly in Online Ads

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Ten state attorneys general on Wednesday accused Google of illegally abusing its monopoly over the technology that delivers ads online, adding to the company’s legal troubles with a case that strikes at the heart of its business.

The state prosecutors said that Google overcharged publishers for the ads it showed across the web and edged out rivals who tried to challenge the company’s dominance. They also said that Google had reached an agreement with Facebook to limit the social network’s own efforts to compete with Google for ad dollars. Google said the suit was “baseless” and that it would fight the case.

“If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” Ken Paxton, the Texas attorney general, said in a video on Twitter announcing the plans.

The complaint will add to the fierce bipartisan backlash against one of the country’s biggest tech companies. Regulators in the United States and Europe have focused on the outsize role Amazon, Apple, Facebook and Google play in the modern economy, shaping everything from how we shop to what information and entertainment we see.

In October, the Justice Department and 11 states said Google had illegally maintained a monopoly over online search engines and the ads that appear in users’ results. An additional case against Google, brought by a separate set of states, is expected soon. Last week, the Federal Trade Commission and more than 40 states accused Facebook of illegally crushing competition by acquiring younger rivals, and argued that the company should be broken up. Apple and Amazon are both under federal antitrust investigations, too.

The lawsuit filed on Wednesday is the first by regulators in the United States to focus on the tools that connect buyers of advertising space with publishers who sell it. Advertisements generate the vast majority of the company’s profits.

But the suit also appeared to have a more partisan flavor. The prosecutors who signed the suit are all Republicans, and it is not expected to be part of the Justice Department case against the company. The other states’ suit against Google, which could come as soon as Thursday, is expected to be signed by Republicans and Democrats and could combine with the federal agency’s case.

Google’s own system for selling ads has been built over more than a decade. In 2007, Google bought DoubleClick, which offered advertising technology and acted as a marketplace, in a deal that has since been criticized as central to Google’s dominance. Google now controls software at every step of the ad sales process.

Google says that it competes with a vast array of companies when it comes to offering advertising technology and that its services work with those offered by competitors. In recent years, companies like AT&T and Amazon have made attempts to capture more of the market for online ad sales.

“Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts,” said a Google spokeswoman, Julie McAlister. “We will strongly defend ourselves from his baseless claims in court.”

Publishers like Rupert Murdoch’s News Corporation have long contended that Google’s dominance lets the company exact a higher cut of each sale without contributing to the costs of creating content. The success of Google stands in sharp contrast to shrinking newsrooms and the shuttering of many local newspapers. This year, Google said it would pay news publishers more than $1 billion over the next three years through a new licensing program.

Mr. Paxton led the investigation into Google even as he faced allegations that he abused the power of his office. Seven of Mr. Paxton’s lawyers said this year that he had done favors for a friend and donor and committed bribery. The employees have since left Mr. Paxton’s office, been put on leave or been fired outright.

Mr. Paxton was also charged with securities fraud in 2015. He has denied those charges as well as the recent allegations made by his own employees.

This is a developing story. Check back for updates.

Daisuke Wakabayashi contributed reporting.



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