Thursday, December 17, 2020

Ken Paxton rides again

 Fresh from being laughed out of the Supreme Court with his lawsuit attempting to expand Texas’ jurisdiction to include election law in other states, Attorney General Ken Paxton is back with another top-of-the-fold lawsuit. The lame-duck period is proving to be a goldmine for legal beagles.

Like last week’s Facebook lawsuit, the suit against Google is not about what you’d think. It doesn’t allege censorship or that the company unfairly persecutes conservative viewpoints, social media handwringing notwithstanding.

Instead, the Google lawsuit is about something much more mundane: fixing prices. As Reuters explains, the basis for the lawsuit is a 2018 agreement between Google and Facebook in which the two companies agreed to give Facebook’s advertisers access to sites that were part of Google’s ad network. The agreement was public but the suit alleges that Google failed to disclose that Facebook backed down from supporting competing ad platforms as part of the deal. The lawsuit also alleges that the two companies worked together to fix ad prices on their platforms.

“Facebook decided to dangle the threat of competition in Google’s face and then cut a deal to manipulate the auction,” the complaint says.

The interesting thing is that the lawsuit does not name Facebook, even though the social media company figures prominently in the complaint. For example, the suit states, “given the scope and extensive nature of cooperation between the two companies, Google and Facebook were highly aware that their agreement could trigger antitrust violations. The two companies discussed, negotiated, and memorialized how they would cooperate with one another.”

The reason is explained in a press release by the Texas Attorney General’s office, which claims, “Google is a trillion-dollar monopoly brazenly abusing its monopolistic power, going so far as to induce senior Facebook executives to agree to a contractual scheme that undermines the heart of competitive process. In this advertising monopoly on an electronically traded market, Google is essentially trading on ‘insider information’ by acting as the pitcher, catcher, batter and umpire, all at the same time.”

In other words, Google used the power of its giant monopoly to force its will upon Facebook, a smaller and helpless company.

In contrast to the Facebook lawsuit, in which 46 states joined with federal litigators, only 10 states signed on with Paxton. Those states are Arkansas, Idaho, Indiana, Kentucky, Mississippi, Missouri, North Dakota, South Dakota, and Utah.

Paxton himself is under a cloud after six people who work in his office accused him of bribery and fraud last October. That case is still being investigated by the Travis County DA, who has jurisdiction in the Texas capitol of Austin.

The lawsuit will be one to watch. My prediction is that it will survive the courts longer than Ken Paxton’s last foray into litigation.

Photo credit: Pablo/

From the Racket

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