Texas and nine other states are taking legal action against Google, accusing the tech giant of working with Facebook in a way that violates antitrust law.
The lawsuit centers around a deal the $1 trillion, California-based Google made with Facebook to increase its already-dominant online advertising business. Google controls a third of the global online advertising industry.
U.S. states want Google, which is owned by Alphabet Inc., to compensate them for damages. States are seeking “structural relief,” which is usually interpreted as forcing a company to divest some of its assets, USA Today reported.
The complaint was filed in U.S. District Court in Texas. In 2017 Google felt Facebook was challenging its already-established dominance in online advertising and decided to make a deal with Facebook. Google initiated an agreement in which Facebook would curtail its competitive moves in return for guaranteed special treatment in Google-run ad auctions, The Wall Street Journal reported.
The complaint claims that Google is influencing an initiative for developing mobile webpages, known as Accelerated Mobile Pages, to force publishers to adopt a format that would make it difficult to use alternative ad technologies on those pages, Reuters reported.
The nine states joining Texas in the lawsuit include Arkansas, Indiana, Kentucky, Missouri, Mississippi, South Dakota, North Dakota, Utah, and Idaho. All have Republican prosecutors.
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Google ad sales account for more than 80 percent of Alphabet’s revenue, Reuters reported. In its latest report, Alphabet reported quarterly digital advertising revenue of $37.1 billion.
Here are four things Black America needs to know about state legal attacks on Facebook’s and Google’s predatory monopoly power.
Google and Facebook are being accused of working to maintain dominance in online advertising, yet after years of complaints, the two tech giants have yet to fix their diversity problem.
“Tech’s race problem – why Silicon Valley is so white – was thrust into the national conversation in 2014 when companies from Google to Facebook to Apple disclosed for the first time how few women and people of color they employ. The companies pledged to make their workforce less homogeneous,” USA reported.
Those promises have not exactly been kept.
In 2012, Black workers at Google accounted for about 1.5 percent of U.S. employees. In 2018 — the most recent figures available — the company employed 1,793 Black people, just 2.6 percent of its U.S. workforce.
According to the most recent U.S. government data released in 2016, Black staffers make up 3 percent of employees in the top 75 tech firms in Silicon Valley, while they held 24 percent of jobs in non-tech firms.
While Google and Facebook are being accused of breaking anti-trust laws to reign supreme in the advertising world, Black-owned media companies remain sorely in need of advertising.
During the summer, Devon Johnson, the founder of the men’s lifestyle publication BleuLife Media, and Rhonesha Byng, the founder of Her Agenda, urged corporations to support Black-owned platforms. They called on companies like Target and Starbucks that, at the time, had ceased advertising on Facebook due to the social media firm’s problematic policies to redirect their ad dollars to Black media, Black Enterprise reported.
Johnson and Byng created the Black-Owned Media Sustainability Institute, and they curated a public database of more than 75 Black-owned media companies in the country including Black Enterprise. “Brands like Unilever, Diageo, Verizon, Ben & Jerry’s, Patagonia, The North Face, Target, Starbucks and others have pulled what’s left of 2020 advertising dollars from Facebook and other social media platforms. They’re calling it #StopHateforProfit,” read a news release. “This has been a result of outcries from civil rights groups and consumers calling out divisive and racist content that exists unchecked on the Facebook platform. Billions of dollars already earmarked to spend on marketing efforts are now left in limbo.”
It is hoped that the legal action will lead to advertising being spread around more evenly and Black media will benefit.
The Texas lawsuit is the second major complaint from regulators against Google and the fourth in a series of federal and state lawsuits aimed at reigning in big tech power plays, USA Today reported.
“Today’s suit makes clear that @Google‘s core corporate strategy has long revolved around monopolizing digital advertising markets and defrauding businesses, publishers & consumers who have nowhere else to go” the nonprofit American Economic Liberties Project tweeted.
The nonprofit was launched in February 2020 to “help translate the intellectual victories of the anti-monopoly movement into momentum towards concrete, wide-ranging policy changes that begin to address today’s crisis of concentrated economic power,” according to its website.
In a video posted on Twitter, Texas Attorney General Ken Paxton said, “If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire.”
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That’s the same Paxton who contested the results of the Nov. 3 U.S. presidential election in several battleground states. The Supreme Court rejected that suit, Reuters reported. Paxton allegedly abused the power of his office and committed bribery.
Google has denied the legal attacks, and a spokeswoman said the company will defend itself from the Texas lawsuit’s “baseless claims in court.”