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Texas hits Google with antitrust suit over ad tech practices

Texas Attorney General Ken Paxton announced Wednesday that he's leading a multi-state lawsuit against Google, accusing the search giant of taking illegal actions to hurt competition in the advertising technology market.

Why it matters: The lawsuit is yet another legal battle for Google, which is facing a Justice Department antitrust lawsuit on its search practices and imminent legal action from a separate group of state attorneys general who have also been investigating the company for anticompetitive behavior.

Driving the news: The state's lawsuit, filed in a federal court in Texas Wednesday afternoon, goes after Google's stranglehold on its corner of the ad tech market, which it and fellow tech giant Facebook dominate.

  • The suit accuses Google of abusing its market power to rig auctions for placing ads and drive up online advertising pricing.
  • Joining Texas on the suit are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah. The AGs for all those states are, like Paxton, Republicans.

The intrigue: The suit also accuses Google of striking up a secret agreement with Facebook to avoid competing with each other’s ad-tech businesses, though the specifics of the allegations are heavily redacted.

Paxton has long been a foe of tech companies, and Texas is part of the recently filed multistate lawsuit against Facebook for alleged anticompetitive acquisitions and behavior.

  • A controversial figure in his own right, Paxton is separately facing claims from people who worked under him accusing him of bribery, abuse of office and other offenses. He also led the failed multistate effort to have the Supreme Court invalidate election results in crucial swing states and hand the 2020 election to President Trump.

What he's saying: "This Goliath of a company is using its power to manipulate the market, destroy competition and harm you, the consumer," Paxton said in an announcement video. "Google effectively eliminated its competition and crowned itself the head of online advertising."

The other side: "Attorney General Paxton’s ad tech claims are meritless, yet he’s gone ahead in spite of all the facts," a Google spokesperson said, maintaining that digital ad prices and ad-tech fees have both fallen, and that Google's fees are below the industry average.

  • "These are the hallmarks of a highly competitive industry. We will strongly defend ourselves from his baseless claims in court."

What's next: The Justice Department is also investigating Google's role in the ad tech market and may still file a lawsuit in the matter. The suit the DOJ already filed focuses on Google's use of contracts to lock its search engine in as the default on web browsers and mobile devices.

  • Texas is one of a dozen states that have joined the DOJ on its suit, filed in October.

Editor's note: This story has been updated to reflect that the lawsuit has now been filed, and to add information on the suit and Google's response.

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