Ten state attorneys general accuse the tech giant of abusing its power to manipulate the digital ad market and crush competitors.

Transcript

STEVE INSKEEP, HOST:

Ten state attorneys general alleged that Google abused its power. The AGs, all Republican, accused Google of abusing its power specifically in digital advertising. The Justice Department in some of these same states were already suing Google for allegedly stifling rival search engines. Google is among NPR's financial supporters, but we cover them like any other company. So NPR tech correspondent Shannon Bond is here on the lawsuit. Shannon, good morning.

SHANNON BOND, BYLINE: Hi, Steve.

INSKEEP: Where does this alleged abuse of power happen in online ads?

BOND: Well, you know, this is a big business for Google, of course. And behind every ad you see on your phone or computer, there's this complicated chain of technology that makes it show up. And the AGs say that Google is the biggest player in every link in that chain. Here's how Texas AG Ken Paxton, who led this investigation, put it.

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KEN PAXTON: If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire.

BOND: So in the game of advertising, they're saying Google calls the shots. It acts as the umpire. And it also plays on both sides, helping publishers sell their ad space and helping advertisers buy that space.

INSKEEP: Shannon, I just have to stop a moment to observe a fact. Ken Paxton is the Texas state attorney general who just grabbed headlines a few days ago by filing a spurious lawsuit over the presidential election. The Supreme Court batted away that false lawsuit without even hearing the case. Paxton is also under indictment. He's also under a whistleblower investigation. So that is the attorney general leading this Google lawsuit. Is this lawsuit any less bogus than his previous big case?

BOND: I mean, there certainly is a cloud over Paxton. But, Steve, this Google case looks really strong to me. It's not fact-free. There's a lot of evidence this investigation has turned up. Remember, it's involved several states. And more broadly, you know, this concern about Google's power in advertising and search is bipartisan.

INSKEEP: OK. So how do the experts say that Google abused its power?

BOND: Well, they say Google is overcharging advertisers and boxing out its competitors. But, Steve, it's also interesting in this lawsuit, there's one competitor that they say Google treated differently, that's Facebook, which is also an NPR sponsor. The lawsuit accuses Google of essentially colluding with Facebook, cutting an illegal deal to manipulate the online ad market. That's an explosive charge. So the states are asking for a jury trial. They want Google to pay damages and be forced to change its ways, including possibly making structural changes like selling off parts of its business. Although, there aren't specifics there in this complaint.

INSKEEP: OK. So the allegation is the super big players played nice with each other, but not with other people. How do Google and Facebook defend themselves?

BOND: Well, Google says these claims are meritless. It says prices have fallen for ads and ad tech. And it says that's evidence of a competitive market. And Facebook declined to comment on this lawsuit. But, you know, both of these companies are just under so much pressure and scrutiny right now. Just back in October, the Justice Department sued Google over its search business. Last week, the FTC and more than 40 states accused Facebook of crushing rivals in social media.

INSKEEP: What do these lawsuits suggest about the politics, the political situation, facing the tech industry?

BOND: Well, you know, just a few years ago, these companies were really golden. And they grew in unchallenged ways. But regulators and politicians are finally waking up to this power that they have and challenging it. And this isn't even the last shoe to drop for Google. We're expecting another lawsuit from other states, including some with Democratic attorneys general, very soon about search and how - whether it favors its own products.

INSKEEP: Shannon, thanks so much.

BOND: Thanks, Steve.

INSKEEP: That's NPR tech correspondent Shannon Bond. Transcript provided by NPR, Copyright NPR.

Tags: Texas Attorney General Ken Paxton  antitrust  Google