FX.co ★ Google, Facebook accused of breaking antitrust law

Two major US Internet giants are once again at the center of a scandal. According to the latest data, ten US states have sued Google, accusing it of colluding with Facebook to violate antitrust laws. Texas has headed the initiative group. In addition, the states involved in the suit include Idaho, Arkansas, Indiana, Kentucky, Mississippi, Missouri, North and South Dakota, as well as Utah. The lawsuit from multiple states alleges that the companies' illegal actions have led to a digital-advertising monopoly.

Texas Attorney General Ken Paxton believes that Google is an expensive monopoly company that takes advantage of its unique status and significant market power to make other market players dance to their tune. The state prosecutors consider Facebook one of such "hostages to fortune", or a "co-conspirator". Its leadership takes cues from Google, which is trying to implement an illegal scheme. Thanks to it, the company "effectively eliminated its competition and crowned itself the head of online advertising", the lawsuit claims. Thus, Paxton claims that Google is engaged in insider trading. "If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire," he said in a statement. However, this is unacceptable, especially when it comes to the violation of federal laws.

Google is accused of working with Facebook in an illegal deal to carve up the entire advertising market between them, keeping other competitors from entering the industry. As a result, Facebook is maintaining its lead in the online advertising market, while Google continues to occupy a prominent position in the market as a whole. The complaint also claims that Google and Facebook have harmed competition through an unlawful agreement to rig auctions and fix prices. Thus, a conspiracy to obtain their own benefit is evident.

According to the prosecutors, Google overcharges publishers for the ads it shows across the web. As a result, ordinary consumers have to incur greater costs. Moreover, the cost of services grows, while their quality declines.

Interestingly, Internet giants have been dragged into such scandals more than once. In particular, Facebook, Google, and Twitter could face fines of up to 10% of total revenues under new UK competition rules. However, this time, they will hardly be able to get off so easily. For Facebook, a fine could amount to $7.1 billion, and $16 billion - for Google.