MANHATTAN (CN) — Advancing one of the dozens of consolidated civil antitrust lawsuits against Google, a New York federal judge on Thursday refused to throw out a tech firm’s monopoly claims against the online search and advertising behemoth over Google’s forced conversion from Adobe Flash videos to HTML5.
Atlanta-based digital advertising firm Inform Inc. claims its $100 million business was destroyed by Google, who they accuse of using monopoly power to implement a sudden and disruptive transition away from Flash for online video ads — a move the firm claims was exclusionary and anticompetitive to non-Google competitors but convenient for advertisers that switched to Google products.
The company first claimed in a 2019 civil complaint originally filed in the Northern District of Georgia that because a firm’s ad services must be compatible with Google’s ad products and Google’s Chrome browser, the tech juggernaut is able to influence industry standards in its favor by setting “arbitrary and anti-competitive rules” for enabling video content and video ads.
“The complaint plausibly alleges that through its Chrome browser, Google abruptly transitioned from allowing video platforms to play through the long-established Adobe Flash to HTML5, and disabled Flash advertisements in order to ‘steal’ the online video market,” U.S. District Judge Kevin Castel wrote in a 26-page opinion, denying Google’s motion to dismiss antitrust claims arising from the transition from Flash to HTML5.
Castel, George W. Bush appointee, determined that Google edged companied like Inform — which has since gone out of business — out of the online video advertising market by allowing and favoring Flash-based advertisements platformed on its own YouTube, but not for competitors.
However, Castel dismissed Inform’s claims of monopolistic leveraging, finding those claims were vague. Castel disagreed that Google leveraged its position in the market via Android phone operating systems, which typically use Google as a default search engine.
Inform, Castel said, "asserts that Google induced manufacturers to preinstall the Google Search app and Chrome by offering a percentage of ad-search revenue gained from the app, but it does not describe how these apps' preinstallation contributed to the market power of Chrome and Google Search."
Before the case was transferred to Manhattan federal court and consolidated with related Google digital advertising antitrust case, U.S. District Judge J.P. Boulee in Georgia dismissed Inform’s amended complaint in 2021 as a “shotgun pleading,” but the case was later revived by the 11th Circuit Court of Appeals.
Google’s proprietary Chrome internet bowser initially came with Flash pre-loaded, but 2014, Google began to roll out changes to Chrome designed to force advertisers to migrate to the Google advertising network, Inform claimed, while keeping its users fixated on Google, Google products and Google services.
On January 27, 2015, Google-owned YouTube announced that it would no longer be using Adobe Flash by default, but would instead be using its HTML5 video player by default in Google’s Chrome and other browsers.
“As a result, advertisers that had creatives supported by Adobe Flash were faced with the Hobson’s choice of converting their content to HTML5 or, alternatively, migrating to the Google network to reach target users, the latter of which substantially added to Google’s own advertising revenue,” Inform wrote in its complaint.
Last week, Castel ruled that Google and its parent company Alphabet Inc. must face advertisers' proposed class action lawsuit in the Southern District of New York on claims that it monopolizes the digital advertisement exchange market, but struck down other antitrust claims, including those focused on ad-buying tools used by large advertisers.
Last month, U.S. District Judge Leonie Brinkema set a Sept. 9, 2024, date for the start of a jury trial in Virginia for a related sprawling antitrust suit brought by the U.S. Justice Department and a coalition of states against Google accusing the company of abusing its monopolistic power in the world of online advertising.
Google had earlier sought to have case consolidated with the similar lawsuit that’s been ongoing for several years in New York, but Brinkema ruled the case can proceed in the Alexandria courthouse, which is known as the “Rocket Docket” for its reputation of adjudicating disputes swiftly.
Last December, Google agreed to pay $900 million to settle multistate claims that it wielded monopolistic power and charged inflated prices for app purchases in its Google Play Store.
One of the most profitable companies in the world with a market capitalization of around $900 billion, Google controls about 90% of all internet searches.
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