State AGs will conduct antitrust investigation of Google

Attorney Generals from almost every state have banded together to investigate whether Google is violating the antitrust laws. This will be a bipartisan effort. The lead AGs are Ken Paxton, a Republican from Texas, and Karl Racine, a Democrat from the District of Columbia.

The two “dissenters” are also bipartisan. Only the AGs from California and Alabama have not joined in.

A bipartisan group of AGs held a press conference about the investigation yesterday in Washington D.C. Paxton said that the probe’s initial focus is online advertising. He noted that Google “dominates all aspects of advertising on the internet and searching on the internet.” It “dominates the buyer side, the seller side, the auction side, and the video side with YouTube.”

One of the AGs compared the situation to a real estate market in which one company owns not just the house you want to buy but all other houses on the block, and is both your agent and the seller’s. This may (or may not) be overstating things, but in my opinion an investigation clearly is in order.

Advertising is only one Google-related concern. There are also concerns about bias in the way the company processes and ranks search results and the way it handles personal information. These might also become the subject of investigation by the AGs. However, if political bias becomes an issue, the bipartisan character of the investigation might be jeopardized.

The Obama Justice Department investigated Google for possible antitrust violations. It wrapped up the investigation after deciding not to take any action against the internet giant. However, there are reports that the Trump Justice Department is looking into Google’s practices and their effect on competition.

Meanwhile, the European Union has issued $9 billion in antitrust-related fines in the past three years. As large as these fines are, I doubt they will cause Google to adopt more pro-competitive practices.

To accomplish this, it might be necessary to break up Google. However, it’s difficult for me to imagine this happening. At most, it might be required to spin off YouTube.

Google was once viewed positively, as a gateway to the internet, and through the internet, to wherever we wanted to go. In this model, Google was not supposed to be steering us to places of its choosing for the purpose of its financial enrichment (or the furtherance of its political preferences).

Google rejected this model. The financial temptation of exploiting its position was too great.

Such exploitation may not, in itself, be an antitrust violation. But it’s worth investigating whether, in the process, Google has violated the law.