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NY State and California Settle with Google Over Antitrust, Click Fraud Claims

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In the second antitrust lawsuit filed against Google in four years, the New York attorney general said on Monday that the company retaliated against authors who objected to their characters appearing on Google Street View cars.

The following day, California filed its own suit alleging that Google violates that state’s consumer protection laws by selling search-engine advertising on websites.

The lawsuits were made possible by sweeping changes made by U.S. antitrust regulators this year, making it easier for states to go after companies that violate antitrust laws. The civil suits, which could end up costing Google more than $1 billion in legal fees, are a reminder of the lingering, complicated feelings about what is right for an Internet powerhouse such as Google.

“In the years after Google started out, it grew like wildfire,” said Angelo D’Amato, a partner at the law firm of Cravath, Swaine & Moore, which is representing the attorney general of New York. “No entity is ever an island.”

The New York suit, filed in the Southern District of New York, alleges that Google engaged in anti-competitive behavior by pressuring publishers to delete or alter their books, including threatening to stop publishing books on its library platform unless authors removed their works from the platform.

The German regulator also opened an investigation earlier this year into whether Google had engaged in anti-competitive behavior, warning that it could face fines as high as $3 billion, according to Bloomberg.

Evan Stark, a Google spokesman, said in a statement: “We always welcome scrutiny from regulators, especially from institutions like the Federal Trade Commission, which, at Google’s request, reviewed our first search business in the late 1990s and determined that our innovative approach to search fit well with the U.S. law. We believe the FTC acted appropriately in this review.”

States have yet to fully flesh out their claims in court. But for Google, the problems are all the more vexing as the company, which filed for its IPO in 2004, struggles with a headwind of slowing growth.

In New York, Google’s practices were brought to the attention of then-New York attorney general Eric Schneiderman in 2015, when a local publisher of dating and relationship books complained that Google had included passages from their books, which were digitized by Google Books, in a data set the company provided to make maps of streets.

A public-relations campaign ensued between Google and the publisher, the publisher said, where Google tried to silence authors and book sellers who objected to the works on Google Street View. The issue reached Mr. Schneiderman, who recalled Monday the roadblocks that he encountered when he began investigating Google.

“It was quite obvious to me that there was intense lobbying by Google,” he said. Mr. Schneiderman’s office investigated for two years before filing suit, and did not resolve the matter with Google until this past summer.

New York is not alone. California was accused of violating antitrust laws by engaging in questionable behavior to try to manipulate the marketplace for its own commercial interests. New York’s claims against Google are related to the same lawsuit. But the California suit focuses on Google’s business practices, while the New York suit is more focused on misconduct related to Google’s search business.

In California, the company and the California Attorney General’s Office confirmed that the current attorney general, Xavier Becerra, had been briefed on the California lawsuit before it was filed. A Google spokesman said the company has not been contacted by the New York attorney general’s office.

In an interview with The New York Times, Mr. Becerra accused Google of paying “several hundred million dollars” in marketing and advertising contracts — that Google is then involved in shutting down — that violate the state’s consumer protection laws. He also warned of the burden on Google: “I think their compensation plan is at risk,” he said.

Mr. Becerra plans to seek a multi-year civil penalty against Google. Mr. Schneiderman’s office, in his own interview with The Times, predicted that a precedent will be set: “We will have more, and we will expose more,” he said.

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