Google Search's 'Self-Preferencing' of YouTube Videos Violates Sherman Act, Says Suit

Google is “self-preferencing” its YouTube videos in Google search results over links to searched-for videos on other online video platforms, alleged Rumble Canada's antitrust complaint Monday (docket 5:24-cv-02880) against Google and parent Alphabet in U.S. District Court for Northern California in San Jose. The plaintiff claims damages of over $1 billion, “before trebling.”

The case is separate from a pending 2021 Rumble antitrust action (docket 4:21-cv-00229) vs. Google in the same court over the defendant's allegedly “anticompetitive and exclusionary practices” that “always give preference” to YouTube over Rumble and other platforms, the complaint said.

The Monday complaint also references agreements Google entered into with third parties that allowed it to dictate that the YouTube mobile app “must be pre-installed on various smart devices, that the YouTube app must be given prominent placement on the smart device, and that the YouTube app cannot be deleted by the end user of the device,” said the complaint.

Google’s “monopoly” in online search allowed it to “dominate other areas of the internet ecosystem, including online advertising," the complaint alleged. Google has garnered “a monopolist’s share of the advertising markets, and with it, a monopolist’s profits at the expense of Rumble and its content creators, of consumers and of competition,” it said.

Rumble, which positions itself as a platform that helps the “little guy/gal" content creators monetize their videos, makes creators' copyright-protected videos available under license to other companies’ websites or social media sites that want to generate advertising revenue from the videos, the complaint said. Because of Google’s dominance in online search, Rumble, like other video platforms, is required to “syndicate” its videos to YouTube “in order to attempt to survive, let alone compete,” alleged the complaint.

Rumble’s videos have been viewed over 10 billion times worldwide on YouTube alone, but its success has been “far less than it could and should have been” due to Google’s monopolistic behavior, alleged the complaint. Its anticompetitive behavior has “coincided with Google’s acquisition and unlawful maintenance of monopoly power in the search engine market,” said the complaint, citing the DOJ’s case vs. Google (docket Ref: 2404250003) in U.S. District Court for the District of Columbia.

Google “exploits significant conflicts of interest that stem from its multiple roles” in the digital ad space, said the complaint. It’s able to “pocket a supra-competitive portion of every advertising dollar that passes through the Ad Tech markets it controls, ad-revenue that rightly should have passed through to publishers like Rumble and its content creators,” alleged the complaint. After Google bought DoubleClick in 2008, it monopolized the publisher ad server and exchange markets, it said.

When Rumble began to use Facebook Audience Network (FAN) in 2017 for header bidding -- to simultaneously route ad inventory to multiple exchanges in order to solicit the highest bid for its inventory – it began to receive “significantly more ad revenue” than it did by using Google Ad Tech, said the complaint. Google, seeing a threat from FAN, reached an agreement with Facebook “that removed Facebook from header bidding,” said the complaint. Rumble “greatly suffered because of it,” having to lay off employees and look to “other, less efficient revenue-generating operations to survive,” it said.

Google “unlawfully forecloses competition" for publisher ad servers in the market for ad buying tools for small advertisers, "and in the separate markets for ad exchanges and ad networks,” alleged the complaint. The company excludes competition by engaging in conduct that’s “unlawful under settled antitrust precedent, including through unlawful tying arrangements, a pattern and practice of exclusionary conduct targeting actual and potential rivals,” it said. That includes its “market allocation and price fixing agreement with Facebook, at one time its largest potential competitive threat in the publisher ad server and ad network markets,” it alleged.

Google’s exclusionary conduct has caused a “wide range of anticompetitive effects, including the exit of rival firms and limited and declining entry rates in the relevant antitrust markets,” even as it enjoys “significant profits” in those markets, the complaint alleged. The Alphabet company’s “harm to competition deprives advertisers, publishers, and consumers of improved quality, greater transparency, greater innovation, increased output, and lower prices,” it said.

The complaint said international rulings about Google’s anticompetitive behavior, including that the U.K. Competition and Markets Authority “identified Google’s misconduct and the harm to publishers, but concluded it did not have appropriate authority to implement a remedy.” The Australian Competition and Consumer Commission “identified Google’s misconduct and the harm to publishers, and is prescribing compensation and a code of conduct to remedy some of Google’s practices,” the complaint said.

Google’s conduct has “directly and proximately harmed Rumble” by allowing it “to skim a large portion of the advertising revenue derived from views” of Rumble videos on YouTube, it said. In addition, the impact of the agreement with Facebook was “immediate and a substantial loss of revenue to Rumble, almost forcing it out of business,” it said.

Rumble claims four violations of the Sherman Act. None of the damages and injunctive relief Rumble seeks is being sought in the 2021 case it brought against Google, it said. The plaintiff seeks compensatory damages, trebled, attorneys’ fees and costs, and pre- and post-judgment interest. It also seeks an order preliminarily and permanently enjoining Google from the anticompetitive behavior alleged. Google didn't comment Tuesday.