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Google defends its empire from antitrust threat

A bunch of US states have sued Google for alleged anticompetitive conduct that allow the search giant to monopolize online advertising

The lawyer for Texas and other states in the lawsuit allege Google entered into the deal to give Meta advantages on the exchange it runs to buy and sell advertising (REUTERS)

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A 2018 advertising pact between Alphabet Inc.’s Google and Meta Platforms Inc. doesn’t violate antitrust law because it doesn’t restrict Facebook from using rival ad exchanges, Google’s attorney told a federal judge.

Texas and a group of other states sued Google over the agreement, nicknamed Jedi Blue, as well as other anticompetitive conduct they allege allowed the search giant to monopolize the market for the technology to buy, sell and service online advertising. Both Google and Meta, which is not a defendant in the case, have defended the agreement and denied any wrongdoing.

“The written agreement itself has nothing unlawful in it,” Eric Mahr, an attorney for Google, said Wednesday at a hearing in Manhattan federal court. He argued the deal expanded competition because it allowed Facebook to bid on ads being sold through Google’s ad exchange on behalf of websites or mobile apps within its Facebook Audience Network.

But Ashley Keller, a lawyer representing Texas, said Google entered into the deal to give Meta advantages on the exchange it runs to buy and sell advertising. In exchange, the social media company abandoned plans to adopt a new type of technology that would have undercut Google’s online advertising monopoly, he said.

“They were smart enough not to write down their agreement that could result in criminal sanctions,” Keller said. “Nobody wants to go to jail and wear an orange jumpsuit.”

Google has asked Judge P. Kevin Castel to dismiss the antitrust suit, arguing that all of the conduct that the states target is legal.

“Google does not have to design any of its products to take into account the interests of rivals,” Mahr told Castel Wednesday. The states “want to turn Google into an ad tech utility.”

But Texas’s Keller argued that Google has consistently taken steps to make it harder for rivals to compete, such as manipulating the auctions for online advertising to ensure Google’s products end up winning. When those efforts didn’t succeed, Google would buy off the competition, as it did with Meta, he said. The Google-Meta pact, first made public in the states’ suit, is now also under investigation by regulators in Europe and the UK.

“There are privileges that Google gives to its own buying tools,” Keller said. “It’s just naked anticompetitive behavior to make sure others can’t disrupt the monopoly.”

Castel, who asked dozens of questions about Google’s ad tech tools and the online advertising market during the two-hour hearing, said the arguments were “helpful” but didn’t indicate how he might rule, or when.

Lawyers for the Justice Department -- which sued Google in 2020 for allegedly monopolizing the search market and is separately probing the company’s ad tech business -- attended Wednesday’s hearing. The agency could file its own antitrust suit against Google for monopolizing the ad tech market as soon as next month.

The case is In re Google Digital Advertising Antitrust Litigation, 21-md-03010, U.S. District Court, Southern District of New York (Manhattan).

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