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50 Attorneys General Launch New Bipartisan Google Antitrust Probe

‘There's a fine line sometimes between aggressive business practices and illegal ones,” says Utah AG Sean Reyes. “Our investigation will determine whether Google has crossed that line. This is not anti-tech. This is actually for the benefit of the tech ecosystem to help level the playing field.’

Fifty Democratic and Republican attorneys general today announced a bipartisan investigation into the potentially anti-competitive and “monopolistic” online search and advertising practices of technology giant Google.

The multi-state antitrust probe will look at whether Google is engaged in anti-competitive behavior that suppresses competition and innovation and harms customers, the AGs said at a press conference in front of the U.S. Supreme Court building in Washington, D.C., this afternoon. California – where Google has its headquarters -- and Alabama are the only states not currently joining in the investigation, which includes Puerto Rico and the District of Columbia.

While many people see the internet as free, “certainly we know from Google’s profits of $117 billion that the internet is not free,” said Texas Attorney General Ken Paxton, whose state is leading the investigation.

“This is a company that dominates all aspects of advertising on the internet and searching on the internet, as they dominate the buyer side, the seller side, the auction side and even the video side with YouTube,” Paxton said. “This investigation is not a lawsuit. It’s an investigation to determine the facts and, right now, we’re looking at advertising. But the facts will lead to where the facts lead.”

The AGs already have requested information related to advertising from Google, according to Paxton, who said it was too soon to discuss potential remedies.

Google searches used to yield links unrelated to Google businesses, but that model has changed, said Karl Racine, the AG for the District of Columbia.

“Very compelling analysis suggests that the overwhelming number of query responses relate to Google businesses and/or advertisers that pay for that slot within those links,” Racine said. “That's a very different model than that model with which they began, and it certainly merits our scrutiny, as it has merited the scrutiny of other sovereigns.”

“This is an unusual setting right here,” Racine continued. “I’m next to friends of mine who I vehemently disagree with on issues like immigration, reproductive rights, gun rights and other issues, certainly healthcare. But we are acting as one today.”

The state AGs' action comes amid other probes by U.S. and European regulators. Google parent company Alphabet last month disclosed it received a civil investigative demand from the U.S. Department of Justice (DOJ) on Aug. 30 that requested information and documents related to prior antitrust investigations of Google in the United States and elsewhere.

“We expect to receive in the future similar investigative demands from state attorneys general,” Alphabet said in an Aug. 30 regulatory filing with the U.S. Securities and Exchange Commission. “We continue to cooperate with the DOJ, federal and state regulators in the United States, and other regulators around the world.”

Google has answered questions on these issues for many years, in the United States and overseas, “so this is not new for us,” according to Kent Walker, Google’s senior vice president of global affairs.

“The DOJ has asked us to provide information about these past investigations, and we expect state attorneys general will ask similar questions,” Walker said in a blog post on Friday. “We have always worked constructively with regulators, and we will continue to do so. We look forward to showing how we are investing in innovation, providing services that people want, and engaging in robust and fair competition.”

Google declined further comment today.

Alaska AG Kevin Clarkson said his state has a significant interest in the Google antitrust investigation because of its unique geographic location. Many Alaskan businesses are highly dependent on the internet for advertising to reach customers in the lower 48 states and international markets, he said.

“The anti-competitive activity of the nature that this bipartisan coalition of states and attorneys general will be investigating has the potential for driving up the cost of business for businesses in Alaska,” Clarkson said.

There’s no doubt that the internet is the “superhighway of information,” and Google is directing most, if not all, of the traffic on this highway, Indiana AG Curtis Hill said.

“And it's important that we determine for our states whether this traffic determination is being done in a fair manner,” Hill said. We certainly want to make sure that the internet has competition. And more importantly, we want to make sure that we're preserving innovation…that many small technical companies have to provide us on a regular basis.”

Arkansas AG Leslie Rutledge said the bipartisan group is seeking to protect the free market and competition, and the American consumer from this “online search engine juggernaut.”

“When my daughter is sick, and I search online for advice or doctors, I want the best advice from the best doctors, not the doctor, not the clinic who can spend the most on advertising,” she said. “Most Americans think it's free to Google something. But it comes at a cost -- a cost of the freedom to choose the best products from the best companies.”

Google escaped fines in a Federal Trade Commission antitrust probe in 2013 that investigated whether it engaged in unfair business practices following its acquisition of Motorola Mobility. The FTC maintained Google reneged on commitments to license Motorola patents on critical standardized technologies needed to make devices such as smart phones, laptop computers, tablets and gaming consoles, and pursued or threatened to pursue injunctions against companies that needed to use the patents. Google settled the case by agreeing to uphold the commitments to license the patents “on fair, reasonable, and non-discriminatory” terms.

Google’s business practices continue to face challenges in Europe. In March, the European Commission fined Google about $1.6 billion for “abusive” online advertising practices that prevented its rivals from placing their search advertisements on third-party websites. Google, meanwhile, is appealing another $5.05 billion fine levied by the commission in July 2018 for allegedly imposing illegal restrictions on Android device manufacturers and mobile network operators to “cement its dominant position in general internet search.” And in May, Ireland’s Data Protection Commission, which ensures that European Union (EU) citizens’ personal data is protected, announced an inquiry into whether Google Ad Exchange is complying with the EU’s new General Data Protection Regulation.

“We were very heartened when our EU colleagues took action,” said Utah AG Sean Reyes, who noted there’s nothing wrong with being a dominant market player if plays fairly.

“There's a fine line sometimes between aggressive business practices and illegal ones,” Reyes said. “Usually the line is very clear. Our investigation will determine whether Google has crossed that line. This is not anti-tech. This is actually for the benefit of the tech ecosystem to help level the playing field. As someone who spent my entire career representing tech companies, investing and running tech companies, I strongly absolutely believe that tech innovation has the ability to raise the quality of life, lessen human suffering, even save lives. But the question for us today is whether Google has strayed from its founding principles to not do evil in its search and relentless drive to be the market dominant player.”

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