Google is facing a £13.6 billion (about $16.5B) lawsuit over claims that it uses its market dominance to oppress smaller companies in the UK, raking in billions in advertising.
The tech giant has been facing scrutiny over monopolistic practices from watchdogs in its major markets. But a class action lawsuit signals more trouble for the web search company.
Geradin Partners and Humphries Kerstetter filed the suit on Tuesday, on behalf of 130,000 online publishers and app businesses in the UK.
Details of the lawsuit, which were reported below by The Register, alleged that Google has been exploiting the plaintiffs using its dominant market position.
Google is the biggest digital advertising company in the world, netting revenues of $54.4 billion in its latest Q3 results. It acts as a broker, selling space on behalf of third-party websites to advertisers, who have to bid to earn a coveted spot online. The search giant controls up to 90 percent of the market in certain sectors, giving it the power to dictate terms and pricing, Humphries Kerstetter claimed.
The company’s anticompetitive practices, alleged in the lawsuit, have cost smaller businesses – like publishers and online apps selling ad space – up to 40 per cent, the law firm said. The losses incurred from 1 January 2014 to date for the companies in the lawsuit are estimated up to £13.6 billion.
Toby Starr, a partner at Humphries Kerstetter, leading the claim, pointed to similar antitrust probes, accusing Google of abusing its dominant position in online advertising, from the EU.
“Google’s misconduct in this matter is well known. The French authorities have fined the firm and multiple investigations are underway across the globe. However, none of these regulatory actions will do anything to compensate the UK publishers of thousands of websites and mobile apps who have lost billions in advertising revenue because of Google’s actions. The only way to recoup these losses is through a competition class action,” he said in a statement.
The US Department of Justice also accused Google of “unlawfully maintaining monopolies through anticompetitive and exclusionary practices in the search and search advertising markets” in a lawsuit in 2021.
A spokesperson from Google called the latest UK class-action lawsuit “speculative and opportunistic” in a statement to Reuters. “Google works constructively with publishers across Europe – our advertising tools, and those of our many adtech competitors, help millions of websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. These services adapt and evolve in partnership with those same publishers,” the spokesperson said.