Google Subpoenaed for Details on its Ad Business
September 12 2019 - 2:01PM
Dow Jones News
By John D. McKinnon
WASHINGTON -- The probe into Alphabet Inc.'s Google unit by a
coalition of state attorneys general is zeroing in on the search
company's dominant presence in the digital advertising market,
according to a civil subpoena reviewed Thursday.
The subpoena, sent by Texas Attorney General Ken Paxton,
includes more than 200 questions and demands for records. Many of
the questions appear designed to solicit evidence that Google
engaged in anticompetitive conduct in building up its powerful
position.
For instance, the subpoena asks for information about Google's
"business rationale" for acquiring several of the companies that
have helped it build up its advertising business, including
DoubleClick in 2008, AdMob in 2010 and Admeld Inc. in 2011.
Another question asks Google to explain its business
justification for prohibiting rival data-management platforms from
operating on its own ad networks.
Still another asks Google to explain its "control or influence
over" the AMP Project, an open-source initiative to standardize
mobile website design. Google is also asked to explain its
"business justification for removing YouTube [advertising]
inventory from other Ad Exchanges."
Asked for a response, Google referred to a blog post by Kent
Walker, its senior vice president for global affairs, last
week.
"We have answered many questions on these issues over many
years, in the United States as well as overseas, across many
aspects of our business, so this is not new for us," Mr. Walker
wrote on Friday. "The [Justice Department] has asked us to provide
information about these past investigations, and we expect state
attorneys general will ask similar questions. We have always worked
constructively with regulators and we will continue to do so."
In another blog post this week, the company said competition in
the ad space is robust.
"To suggest that the ad tech sector is lacking competition is
simply not true," it said. "To the contrary, the industry is
famously crowded. There are thousands of companies, large and
small, working together and in competition with each other to power
digital advertising across the web, each with different specialties
and technologies."
This year, Google's share of the total U.S. digital ad market
will be 37%, according to eMarketer, a research firm.
The subpoena was sent Monday, the same day that 50 attorneys
general announced their antitrust investigation that is being led
by Texas. The Wall Street Journal reviewed a copy Thursday through
a public records request.
While Google has pledged to cooperate with the probe, some legal
observers believe Google could feel compelled to start fighting
back at some point if it believes the investigation is
overreaching. When Mississippi's attorney general, Jim Hood, sent a
broad civil investigative demand to Google a few years ago, the
company responded with a federal lawsuit seeking to quash the
effort.
Eric Goldman, a Santa Clara University law professor and
co-director of the High Tech Law Institute, cited that lawsuit as
"an example of Google's willingness to fight if it feels it has
to."
Scott Cleland, founder of Precursor Research LLC, an independent
investment research boutique specializing in internet regulation,
said: "Google has no peer in slow-rolling and minimizing government
accountability with a smile; it's a core competency."
Write to John D. McKinnon at john.mckinnon@wsj.com
(END) Dow Jones Newswires
September 12, 2019 13:46 ET (17:46 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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