SALT LAKE CITY — Utah Attorney General Sean Reyes joined colleagues from across the country on the steps of the U.S. Supreme Court Monday in announcing a coordinated investigation of search giant Google on concerns of potential anticompetitive practices.
The bipartisan inquiry, which will include participation from 48 state attorneys general as well as representatives of Washington, D.C., and Puerto Rico, will focus on Google’s advertising business and paid ad placements that appear in search results. Texas Attorney General Ken Paxton will lead the effort.
Monday’s announcement continues the cascade of investigations currently focusing on big U.S. tech firms that also includes a separate effort launched last Friday by a group of eight state attorneys general that will focus on Facebook, as well as federal inquiries already under way by the Federal Trade Commission and U.S. Department of Justice. Congress has also been grilling representatives of Google, Facebook, Apple and Amazon in hearings exploring potential anticompetitive conduct. Collectively, the efforts have attracted support from elected officials on both sides of the aisle in a rare bridging of the current political divide.
Reyes and over 40 other state attorneys general co-signed a letter in June outlining issues they share with how big tech firms operate, following a conference on antitrust issues in Omaha, Nebraska. The 27-page document went to the FTC, which along with the Justice Department, is tasked with antitrust oversight in the U.S.
It noted that companies like Google and Facebook, that give away their products, have created new challenges for enforcement and regulation under current statute.
”Recent antitrust enforcement in technology markets has often failed to meaningfully evaluate non-price aspects of competition such as innovation, consumer choice and privacy,” the letter reads. “Recent comments by Makan Delrahim, antitrust chief at the United States Department of Justice, reaffirm the commitment of government antitrust enforcers to utilize current antitrust doctrine to address consumer harm in zero-price markets.”
Google expects state prosecutors will ask it about past similar investigations in the U.S. and internationally, senior vice president of global affairs Kent Walker wrote in a blog post Friday.
Google’s parent company, Alphabet, has a market value of more than $820 billion and controls so many aspects of the internet that it’s hard to imagine surfing the web for long without running into at least one of its services.
Google will control 31.1% of global digital ad dollars in 2019, according to eMarketer estimates, crushing a distant second place Facebook. And many smaller advertisers have argued that Google has such a stranglehold on the market that it becomes a system of whatever Google says, goes — because the alternative could be not reaching customers.
”There’s definitely concern on the part of the advertisers themselves that Google wields way too much power in setting rates and favoring their own services over others,” said Jen King, the director of privacy at Stanford’s Center for Internet and Society.
Critics often point to Google’s 2007 acquisition of online advertising company DoubleClick as pivotal to its advertising dominance. Europe’s antitrust regulators slapped Google with a $1.7 billion fine in March for unfairly inserting exclusivity clauses into contracts with advertisers, disadvantaging rivals in the online advertising business.
Another visibly huge piece of Google’s business is its search platform, often the starting point for millions of people when they go online. Google dwarfs other search competitors and has faced harsh criticism in the past for favoring its own products over competitors at the top of search results. European regulators have also investigated here — ultimately fining Google for promoting its own shopping service. Google is appealing the fine.
Google has long argued that although its businesses are large, they are useful and beneficial to consumers. But it appears regulators are growing more concerned not just with the effects on regular internet users, but on smaller companies as well.
“On the one hand, you could just say, ‘Well Google is dominant because they’re good,’” King said. “But at the same time, it’s created an ecosystem where people’s whole internet experience is mediated through Google’s home page and Google’s other products.”
Walker emphasized that the company’s products help people every day.
”Google is one of America’s top spenders on research and development, making investments that spur innovation: Things that were science fiction a few years ago are now free for everyone: translating any language instantaneously, learning about objects by pointing your phone, getting an answer to pretty much any question you might have,” he wrote.
This story will be updated.
Contributing: Associated Press