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Attorneys general from a core group of eight states are spearheading the Google probe. | Justin Sullivan/Getty Images

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'A very bad day for Google' as 50 states, territories join antitrust probe

Attorneys general from 50 states and territories on Monday announced an antitrust investigation of Google, a bipartisan probe of the Silicon Valley juggernaut focusing on the company’s ubiquitous search engine and its highly lucrative digital advertising business.

Republican Texas Attorney General Ken Paxton, joined by a dozen other AGs, told reporters outside the Supreme Court that Google dominates the online advertising market, a stronghold that he said could be unfairly hampering the growth of other companies and resulting in higher prices for consumers.

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"We've heard hundreds of those stories from individuals with small businesses, large businesses — there's a lot of concern out there,” Paxton told POLITICO in an interview. “This isn't something the [attorneys general] made up. This is an organic thing all of us have had questions about.”

The states have given Google 30 days to respond to a long list of questions about all aspects of its digital advertising operations, Paxton said, in hopes of better understanding how one of the nation's largest internet companies rakes in its billions of dollars in profit each year.

Paxton declined to speculate on where the investigation could end, though he said the AGs aren't ruling out a hefty fine or even seeking to break up the tech giant — a penalty a number of politicians have endorsed. But they could also walk away from the inquiry with Google intact and unscathed, he said.

“It's unfair to the investigation to presume any remedy when you start,” Paxton said. “That's unfair to Google, that's unfair to expectations of my constituents and the constituencies of other states. We’re here to be fair. And we want Google to be fair about what they’re doing.”

District of Columbia AG Karl Racine, the only Democrat to attend Monday's press conference, said attorneys general from across the political divide are “acting as one” despite their differences on partisan political issues like immigration, health care and abortion rights.

The 50 participating attorneys general represent 48 states, minus California and Alabama, but including D.C. and Puerto Rico. The huge contingent gives major political heft to the probe, which POLITICO and others have reported was in the works.

"I can’t remember the last time you had just about everybody get on the train," said William Kovacic, a former FTC chairman under President George W. Bush. "It provides somewhat of a greater degree of political support and power behind it in terms of resourcing."

"It’s going to be a very bad day for Google," tweeted Sen. Josh Hawley (R-Mo.), who investigated Google as Missouri's attorney general.

The state-level action heightens the peril for Google, which is already under intense scrutiny in Washington over how it conducts its business. And it's another sign of the bipartisan nature of the pressure on the nation's biggest tech companies, with both Republicans and Democrats represented in the group of state AGs conducting the investigation.

The Justice Department's antitrust division, under Makan Delrahim, unveiled its own plans in July to probe whether major social media, search and e-commerce companies have grown too dominant. Days later, Delrahim and U.S. Attorney General William Barr huddled with state enforcers to talk tech competition concerns.

The states’ probe into Google is considered a parallel but separate effort from the Justice Department’s inquiry into the search giant, but they could ultimately intersect, said one person familiar with the probe who spoke before the official announcement. Facebook has attracted the attention of another grouping of states, led by New York AG Tish James, a Democrat.

"This adds a whole different level of complexity for both Facebook and Google to deal with because they're dealing with potentially many different investigations, not all of which may be coordinated," said Robert Litan, who was principal deputy assistant attorney general in the DOJ's antitrust division during the Clinton administration. "All I know is I'm sure this is a major headache for the general counsels of both of these companies."

Attorneys general from a core group of eight states are spearheading the Google investigation, and will take the lead in combing through documents and writing briefs or demands for information, according to the person familiar with the probe. Racine, the D.C. attorney general, said investigators want to hear from Google employees with any evidence of wrongdoing, as well as consumers and "competitors in the marketplace."

As the AGs at Monday's press conference stepped one by one to the microphone, several expressed concern about how Google collects and secures its trove of data on users. A broad coalition of attorneys general, including Paxton, wrote to the FTC earlier this year asking to agency to consider data privacy in antitrust investigations.

Others suggested Google's stronghold on digital advertising is resulting in higher prices for small businesses and consumers.

“This is not anti-tech,” said Republican Utah Attorney General Sean Reyes. “To the opposite, this is actually for the benefit of the tech ecosystem, to help level the playing field.”

“I strongly, absolutely believe that tech innovation has the ability to raise quality of life and lessen human suffering, even save lives,” Reyes continued. “The question for us today is whether Google has strayed from its founding principles to not do evil in its search and relentless drive to be the market-dominant player.”

The fact that the AG party affiliations are split between Democrats and Republicans may complicate any accusations from the companies and their supporters that the efforts are politically motivated.

Google has pledged to work with attorneys general to answer questions about its business and the tech sector in general, spokesperson Jose Castaneda told POLITICO. The company acknowledged Friday that the Justice Department is seeking details about antitrust probes of the company that have been previously conducted, and the state AGs may soon ask for similar information.

"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," Kent Walker, Google's senior vice president of global affairs and chief legal officer, wrote in a blog post Friday.

Kovacic, the former FTC chairman, said he's not surprised the state AGs are calling on Google's employees to dish on the company, saying it's part of the standard playbook in these types of investigations.

“Maybe there are different ways in how you say it and approach people, but that's the implicit message when you announce inquiries," he said. "It's important to give people assurances that you're serious. If you’re not serious, they are not inclined to cooperate."

Google has struggled with employee dissent in recent years. Employees have banded together to protest the company's handling of sexual harassment allegations and its artificial intelligence work with the Defense Department. Google recently told staff to refrain from engaging in disruptive political debates at work.

Silicon Valley is under antitrust pressure on a variety of fronts. Congress is conducting inquiries into competition in online markets. And the FTC's recently established tech task force has initiated multiple antitrust investigations of tech, including one that Facebook previously disclosed.

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