Google faces biggest investigation yet in the US of its internet business practices

indica News Bureau-

 

Fifty attorneys general from across the United States have banded together to investigate whether Google’s online advertising practices violate the country’s antitrust laws.

The bipartisan move could result in a broad legal challenge to the company’s internet market dominance.

Texas Attorney General Ken Paxton (Rep) and Washington, DC, Attorney General Karl Racine (Dem) are leading the investigation.

The announcement was made on the steps of the US Supreme Court Monday. The probe will focus on Google’s dominance in the online search and advertising markets.

“This is a company that dominates all aspects of advertising on the internet and searching on the internet as they dominate the buyers’ side, the sellers’ side, the auction side and even the video side with YouTube,” Paxton said.

“This investigation is not a lawsuit,” he added. “This is an investigation to determine the facts, and right now we are looking at advertising. But the facts will lead to where the facts lead.”

Google’s critics applauded. Yelp Inc, which has long complained about Google’s practices, said biased search results that steer users to Google’s own products harm consumers.

The attorneys general agreed, saying Google search results are skewed toward its own products and those of advertisers rather than the best information.

“When my daughter is sick and I search online for advice or doctors, I want the best advice from the best doctors… not the ones who can spend the most on advertising,” Arkansas Attorney General Leslie Rutledge said.

“The time has come for the tech giants to be held accountable for violating our antitrust laws,” Public Citizen, a government-transparency group, said in a statement. “Google’s anticompetitive behavior is a serious problem for our economy and our democracy, and the state attorneys general clearly get that.”

Paxton and Racine were joined at the announcement by the attorneys general of Alaska, South Dakota, Indiana, Arkansas, Utah, Florida, Missouri, Tennessee, Ohio, Louisiana and Nebraska.

The coalition includes 48 states plus the District of Columbia and Puerto Rico. California, which is where Silicon Valley is located, and Alabama are the only two states staying out of it. Neither offered an explanation.

Nothing has been said yet about the remedies that could be applied if the investigation finds that Google did violate antitrust laws.

Google and some other tech companies like Facebook, also based in California, already face multiple investigations at the federal level over whether they have violated competition laws. But many of Silicon Valley’s critics believe federal law enforcers have been reluctant to go after the tech giants.

“I suspect [the states’ move] will spur on federal investigators who will see the states are moving and being active and who will feel compelled to do the same,” Senator Josh Hawley (R-Mo), an outspoken critic of Facebook and Google and former attorney general of Missouri, told reporters.

Google refused to comment and only pointed to a blog post by Kent Walker, the company’s chief legal officer, published on Friday after it was revealed that the US justice department had requested for records.

“We have answered many questions on these issues over many years, in the United States as well as overseas, across many aspects of our business, so this is not new for us,” Walker wrote. “We have always worked constructively with regulators and we will continue to do so.”

But the size of the latest investigating group, which includes all but two states of the Union, poses a threat. The states have a track record of taking on major companies such as cigarette makers and banks over harm to consumers and wresting fines that amount to billions of dollars.

The state attorneys general sent their own records request to Google on Monday. They said the request focused solely on advertising.

A smaller group of attorneys general, led by Democrat Letitia James of New York, announced a similar probe of Facebook’s market power on Friday. Facebook also revealed that it is facing an antitrust investigation from the Federal Trade Commission (FTC).

The increased regulatory scrutiny comes as Silicon Valley has lost favor among lawmakers following a string of privacy scandals and growing questions about whether these companies have suppressed their respective markets through the use of their monopolistic power.

The European Union has already fined Google three times in recent years for violating its competition laws through its conduct in comparison shopping, online advertising and mobile operating systems.

But Google has so far escaped serious sanctions in its home country. The FTC closed an antitrust investigation into the company’s search practices in 2013 without pressing charges over anticompetitive conduct though agency staff had recommended it.

Multiple attorneys general, including Racine and Utah’s Sean Reyes (R), have since asked the FTC to reopen the investigation. “They declined to reopen that investigation at the time that Attorney General Racine and I asked them to,” Reyes said Monday. “The EU then issued fines and sanctions based on those very same complaints and concerns, and I’ll just leave it at that.”

Racine said that while they plan to cooperate with the federal agencies, the states won’t settle for any course of action “that may fall short” of what they think needs to be done. “We’re going to do what we think is right based on our investigation,” the DC law officer said.

 

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