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Federal court denies Google’s motion to dismiss Texas-led antitrust case

SOUTHEAST TEXAS RECORD

Saturday, November 23, 2024

Federal court denies Google’s motion to dismiss Texas-led antitrust case

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Paxton

Paxton

NEW YORK - A federal court has ruled on Google’s motion to dismiss multiple counts of allegations made in an antitrust lawsuit brought by Texas Attorney General Ken Paxton, dismissing only one of the counts.

“Google’s monopolization of the display-advertising industry and its misleading business practices stifle innovation, limit consumer choice, and reduce competition,” Paxton said in a statement. “Here, the court is absolutely right to reject Google’s attempt to throw out our case. We look forward to a jury hearing how this Big Tech giant abused its monopoly power by harming consumers to reap billions in monopoly profits. 

“This is a major step in the right direction to make our free market truly free.”

Since its filing last year, more than a dozen states have joined the Texas-led lawsuit, which alleges antitrust violations and deceptive acts by Google in its lucrative online display advertising business.

According to the complaint, Google’s monopolization includes an anticompetitive agreement with Facebook, making misrepresentations to users and customers, and suppressing competition.

Earlier this year, Google filed a motion to dismiss, asserting that the state plaintiffs are responding to the company’s success by seeking to compel it to share with its competitors “the fruits of its investments and innovation.” 

“They criticize Google for not designing its products to better suit its rivals’ needs and for making improvements to those products that leave its competitors too far behind,” the motion states. “They see the ‘solution’ to Google’s success as holding Google back, rather than letting market forces urge its competitors forward.” 

Google argued that the states’ monopolization and attempted monopolization claims (counts one and two) fail because they have not alleged facts plausibly showing that it has engaged in anticompetitive conduct. 

Google further argued that the state plaintiffs’ third amended complaint fails to allege facts showing that Google coerced the publishers that use Google’s ad exchange to purchase its ad server. 

In the fourth count, the state plaintiffs argue that it was unlawful for Google and Facebook to enter into a Network Bidding Agreement that enabled Facebook to bid against Google and other buyers in Google’s auctions. 

Google argued that while the states suggest that Facebook agreed not to support header bidding when it signed the NBA, they cannot cite any provision in the NBA to that effect. 

The federal court granted Google’s motion to dismiss on the fourth count, but otherwise denied to dismiss the other claims, allowing the coalition of states to proceed on all counts under Section 2 of the Sherman Act, a major body of federal antitrust laws. 

The court found that “the States have plausibly alleged that Google has monopoly power in and willfully engaged in anticompetitive conduct.”

The case is currently in the U.S. District Court for the Southern District of New York, case No. 1:21-md-03010-PKC. 

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