Google deals with trio of US lawsuits over ad prowess

Executives at Google parent company Alphabet will report quarterly earnings on Tuesday, seeking to highlight the internet titan’s money-making success while mindful of regulators concerned about the firm’s clout.

Google, which has long dominated the lucrative online advertising market, is the target of a trio of antitrust lawsuits in the US accusing it of abusing its position.

Regulators are concerned that the Silicon Valley giant’s search engine, ad platform, mapping service, Android mobile operating system and other offerings give it unfair advantages.

Google has thrived during the pandemic as people rely on the internet for work, school, shopping and socializing.

Worldwide, the firm is on track to take in $116.7 billion in digital ad revenue this year, an increase of 18.4 percent from 2020, according to a forecast by industry tracker eMarketer.

Rivals shut out?

A blockbuster lawsuit filed in October last year by the US government accuses Google of maintaining an “illegal monopoly” in online search and advertising.

The suit contends that Google shut out competitors and proposes that the court consider a range of remedies including a possible breakup, but it offered few specifics.

Google pays Apple from $8-12 billion each year to be the default search engine for the iPhone maker’s Safari browser as well as Siri virtual assistant, according to the lawsuit.

“As a practical matter, users rarely switch the preset default general search engine,” the lawsuit maintained, noting that Google then makes ad money off those users.

Yelp yelps

Dozens of US states filed a lawsuit against Google in December accusing the internet giant of abusing its internet search dominance to eliminate competition.

The suit by antitrust enforcers from 38 US states and territories aligns with but goes beyond the case filed by the Justice Department.

The action differs from the federal litigation in that it accuses Google of unfairly putting “vertical” sites, such as those offering reviews or recommendations, at a disadvantage by tailoring search results to keep people on the internet giant’s pages.

Amazon, Tripadvisor, Yelp and other internet firms involved in recommending products or services have complained that Google favors its own offerings in general search results.

Internet ‘Goliath’

In December, a group of states led by Texas filed a separate antitrust suit alleging anti-competitive practices, and asked to be consolidated with the federal case against Google.

“This Goliath of a company is using its power to manipulate the market,” Texas attorney general Ken Paxton said in a brief Twitter video announcing the suit.

He contended that Google rigged advertising auctions, taking advantage of its position serving up adverts as well as online search results.

“If the free market was a baseball game, Google positioned itself as the pitcher, the batter and the umpire,” he said in the video.

Texas is also alleging that Google has an unlawful agreement with Facebook to avoid competing.

Google on the defensive

Google has rejected the accusations in the lawsuits and countered that it seeks to deliver the best results to online queries.

People are free to use other easily available search engines, the Silicon Valley company has noted.

Google pointed out that digital ad prices and ad tech fees have fallen, saying those are “hallmarks of a highly competitive industry.”

The firm’s software not only crawls the internet and indexes what it finds, it also determines which results to provide for queries and what ads are displayed.

The California-based tech giant also handles auctions for ads competing to be displayed.

The federal case, where all three suits may wind up consolidated, could take years to play out.

Legal experts point out that it may be difficult to show Google’s conduct was illegal under the longstanding “consumer welfare” standard in monopoly cases because its services are largely free.

Google has called the Justice Department lawsuit “deeply flawed.”

© 2021 AFP