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Texas and Nine Other States File New Antitrust Lawsuit Against Google — Here's the Full Complaint

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  • Google is set to face a new antitrust lawsuit from a group of state attorneys general led by Texas, this time targeting its advertising technology services.
  • The announcement follows a separate complaint from the Department of Justice claiming Google has illegally maintained a monopoly in online general search services by cutting off competitors from key distribution channels.
  • The complaint claims Google and Facebook, which it names a "co-conspirator," harmed competition through an unlawful agreement to rig auctions and fix prices.

Google is facing a new antitrust lawsuit from a group of state attorneys general led by Texas, this time targeting its advertising technology services.

The lawsuit claims Google unlawfully acquired, attempted to acquire, or maintained a monopoly in several steps of the online ad market including both buy and sell sides. It also alleges Google has engaged in unlawful tying arrangements between its ad products so publishers had to use another Google tool if they chose to operate on its ad exchange.

The lawsuit alleges that Google's 2008 acquisition of ad tech company DoubleClick marked a "fundamental change" where the company began to "exert leverage" as a middleman to extract payments from all steps of the complex online ad-buying process.

The complaint also claims Google and Facebook, which it names a "co-conspirator," harmed competition through an unlawful agreement to rig auctions and fix prices. According to the complaint, when Facebook announced in 2017 plans to compete with Google in the ad tech space, the search giant allegedly cut a deal to stem the competition. As part of the alleged arrangement, Google would grant Facebook certain advantages in auctions it runs for mobile app advertising inventory.

A Google spokesperson told CNBC that the lawsuit's claim of an unlawful auction rigging agreement with Facebook is not accurate. Facebook Audience Network is involved in exchanges outside of Google's, such as Fyber, MoPub (Twitter's ad exchange), Applovin MAX and Ironsource, the spokesperson said, adding that its Open Bidding program was designed to work with a variety of ad networks and exchanges.

Facebook did not immediately respond to a request for comment.

The states are seeking remedies that could include a break up and fines. They also demanded a jury trial.

Texas Attorney General Ken Paxton said in a video announcing the lawsuit that Google "effectively eliminated its competition and crowned itself the head of online advertising."

"If the free market were a baseball game, Google positioned itself as the pitcher, the batter and the umpire," Paxton said in the video.

Nine Republican-led states are joining Texas as co-plaintiffs: Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota and Utah.

"Attorney General Paxton's ad tech claims are meritless, yet he's gone ahead in spite of all the facts," a Google spokesperson said in a statement. "We've invested in state-of-the-art ad tech services that help businesses and benefit consumers. Digital ad prices have fallen over the last decade. Ad tech fees are falling too. Google's ad tech fees are lower than the industry average. These are the hallmarks of a highly competitive industry. We will strongly defend ourselves from his baseless claims in court."

Here's the full complaint:

The lawsuit follows a separate complaint from the Department of Justice claiming Google has illegally maintained a monopoly in online general search services by cutting off competitors from key distribution channels. Texas, which also joined 10 other Republican state attorneys general in the DOJ suit, had led a large multistate probe into Google's ad tech business beginning last year.

A third antitrust lawsuit is expected to be filed against Google as soon as Thursday from another coalition of bipartisan state AGs, Politico reported Tuesday. That suit is also expected to target Google's search services, but focus on how its changing design has disadvantaged competitors, according to Politico.

Paxton has recently entered the public consciousness for different reasons. Senior officials in his office asked law enforcement to investigate their boss over accusations of bribery, local media reported in October. Paxton has called the allegations "false."

Paxton also recently led an effort to challenge the results of the U.S. presidential election by asking the Supreme Court for permission to sue four battleground states that President-elect Joe Biden won. The Supreme Court denied that request.

-- CNBC's Ylan Mui contributed to this report.

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