Allegations of market manipulation: Ten US states are suing Google

Thursday 17th December 2020

Allegation of market manipulation
Ten US states are suing Google

There is a lot of work ahead of Google's lawyers: The internet giant has been targeted by the cartel watchdogs for alleged competition violations and is already facing a lawsuit. Now there is another lawsuit in Texas.

Google continues to come under massive legal pressure in the USA. Ten states filed a lawsuit in federal court in Texas Wednesday against Google's parent company Alphabet on charges of illegal advertising practices. In the complaint, the Internet giant is accused of systematically favoring its own products over those of the competition when auctioning spaces for advertisements and in its search engine. Google is a "Goliath" who uses its power to "manipulate the market," said the Texas Attorney General Ken Paxton, who is in charge of the lawsuit.

Google rejected the allegations as "baseless". The prices for online advertisements and related technical services have fallen. This shows that there is a lot of competition in the online advertising market.

Amazon, Tripadvisor, Yelp and other internet companies accuse Google of unfair advertising practices. They accuse Google of having designed the algorithm of its search engine to give preference to Google products. They also accuse the company of favoring its own offers at the auctions it holds for advertising space.

However, the share of Google in the business of the online advertising market in the USA is declining under pressure from competitors such as Amazon and Facebook, according to data from the market research company eMarketer. This year, Google's share of this market will be less than 30 percent. The total value of the online advertising market in the US is estimated by eMarketer for 2020 at $ 42.4 billion (34.7 billion euros).

The current lawsuit against Google is not the first. As early as October, the US federal government, together with eleven states, sued the company on charges of "illegal" monopoly formation on search engines and online advertising. This lawsuit in federal court in Washington opened the door to the largest antitrust case in the United States in decades.