• by Wendy Davis  @wendyndavis, March 8, 2024

The defunct Atlanta-based ad tech company Inform, which provided video services to outside publishers, can proceed with claims that Google violated antitrust laws by discontinuing support for Adobe Flash in favor of HTML5 in YouTube and the Chrome browser, a federal judge ruled Thursday.

In a 26-page decision, U.S. District Court Judge Kevin Castel in the Southern District of New York ruled that the allegations in Inform's complaint, if proven true, could support the conclusion that Google both monopolized and attempted to monopolize the online video advertising market. 

“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,” Castel wrote.

The ruling comes in a battle dating to 2019, when Inform alleged that it was put out of business by Google's decision to end support for Flash. The company said it garnered more than $100 million in revenue for online ad services between 2014 and 2016, but was effectively squeezed out of the market in 2016 -- the year Google discontinued supporting Flash.

“Flash was superior in many respects and Google’s primary reason for wanting to marginalize Flash was Google’s lack of control over Abode’s proprietary product,” Inform alleged in its initial complaint, which was filed in federal court in Georgia.

Inform also alleged that starting in 2015, Google automatically converted Flash campaigns to HTML5 -- but only for advertisers that “used or switched to Google’s ad buying tools and uploaded their ads through Google’s AdWords, AdWords Editor, or third-party tools that contracted through Google’s ad platform.”

The upshot, according to Inform, was that advertisers had to either manually convert content from Flash to HTML5 or use Google, which did so automatically.

Publishers also were “coerced into transacting for programmatic ad inventory” through Google tools because publishers “direct relationships with advertisers were disrupted as advertisers worked through the transition to HTML5,” Inform alleged.

Google urged Castel to dismiss the complaint for several reasons, including that the transition to HTML5 was a valid design choice, and that the industry overall was moving away from Flash. Google also noted Apple CEO Steve Jobs's well-publicized criticisms of Flash -- which wasn't allowed on Apple products.

Castel essentially said in his ruling that Google's argument on that point hinged on evidence that wasn't yet part of the record, and therefore couldn't be considered at this time. 

The ruling leaves open an opportunity for Google to defeat the claims at a later stage of the proceeding.

While Castel sided against Google on Inform's major claim regarding Flash and HTML5, the judge narrowed the lawsuit by throwing out some counts relating to Google's ad auction procedures -- including a claim that Google set “unreasonably high minimum bids.”

The allegations relating to that count “provide no clarity as to the nature of Google’s alleged anticompetitive conduct and its claimed effect on Inform,” Castel wrote.

A Google spokesperson said the company was “pleased the court significantly narrowed the case.”

He added: “We'll continue to defend ourselves against these meritless allegations.”