- Law enforcement officials from 48 U.S. states, the District of Columbia and Puerto Rico yesterday opened an antitrust investigation into Google's advertising business, taking aim at the search giant's key source of revenue. Texas Attorney General Ken Paxton is leading the probe, saying in a statement that it will focus on Google's "overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers."
- Paxton said the bipartisan coalition of attorneys general had seen evidence that Google's business practices "may have undermined consumer choice, stifled innovation, violated users' privacy, and put Google in control of the flow and dissemination of online information." California and Alabama declined to participate in the investigation, Paxton said at a televised press conference.
- Participating states asked Google to provide documents on its advertising business, while several attorneys general described the investigation as "preliminary." They also said they expected the probe to expand to cover other issues such as data privacy, and declined to say if they would scrutinize other tech giants.
The investigation by state attorneys general is another sign that U.S.-based authorities are becoming more like their European counterparts in scrutinizing possible anti-competitive behavior by U.S. tech companies. Google has been fined billions of dollars by European Union authorities for alleged anti-competitive behavior or violations of data-privacy rules.
For marketers looking to reach digital consumers, the major tech platforms reach the broadest audiences, but alternatives like Amazon and TikTok are growing as brands explore new ways to engage connected audiences, in part because of their own dissatisfaction with how Google and Facebook have wielded their vast market dominance in digital advertising.
It's too early to tell what direction the antitrust investigation of Google by state authorities will take, and whether it will have any meaningful effect on mobile marketers that are seeking a broader range of digital ad choices. Google and Facebook together command about 60% of the U.S. digital ad market, and Amazon's growing ad business has emerged as the most viable threat to the duopoly.
Google controls an estimated 37% of the U.S. digital ad market, including ad placements on its main search site and other websites and mobile apps through its Google Marketing Platform, which was rebranded from DoubleClick last year. If Google is found to have violated antitrust laws, one remedy that has been floated would be to unwind its acquisitions of ad network DoubleClick, video-sharing site YouTube, navigation app Waze and smart-home device maker Nest. Google would still have the most popular search engine in the world, giving it a steady source of advertising and e-commerce revenue.
The state-level investigation into Google comes as federal authorities such as the U.S. Department of Justice and Federal Trade Commission probe tech giants including Google, Facebook, Apple and Amazon for possible violations of antitrust law. Google's parent company Alphabet last week said in a regulatory filing that the Justice Department in August had requested information about prior antitrust probes of the company.
"We continue to cooperate with the DOJ, federal and state regulators in the United States, and other regulators around the world," the filing said.
Antitrust investigations are heating up as big tech companies that used to be sources of national pride find themselves being villainized as too powerful by U.S. politicians from across the ideological spectrum. Presidential candidate Sen. Elizabeth Warren, D-Mass., this year announced a plan to break up big tech companies, singling out Google, Facebook and Amazon as monopolistic. President Donald Trump has criticized Google for being biased against conservatives in its search results.
The political rhetoric likely will intensify as candidates vie for attention and blame tech companies for their role in swaying public opinion. The Cambridge Analytica scandal that last year engulfed Facebook will still be felt as politicians, the press and the electorate scrutinize digital media companies like Google more closely going into next year's election.