Google Faces £13.6bn Lawsuit Over Alleged Abuse of Online Advertising Power
Google must face a £13.6bn lawsuit alleging it has too much power over the online advertising market, a court has ruled. The case, brought by a group called Ad Tech Collective Action LLP, alleges the search giant behaved in an anti-competitive way which caused online publishers in the UK to lose money.
Case Background
Google parent company Alphabet called the case “incoherent” in its attempts to get the legal action dropped. However, the Competition Appeal Tribunal in London has ruled the case can now go to trial.
“This is a decision of major importance to the victims of Google’s anti-competitive conduct in adtech,” said former Ofcom director Claudio Pollack, now a partner in Ad Tech Collective Action. “Google will now have to answer for its practices in a full trial.”
However, Google’s legal director, Oliver Bethell, described the lawsuit as “speculative and opportunistic.” “We’ll oppose it vigorously and on the facts,” he added in a statement.
Understanding the Adtech Case
The case concerns advertising technology, usually shortened to adtech, which decides which online adverts people see, as well as how much they cost to publishers. Hosting such adverts is a huge source of revenue for many websites – Ad Tech Collective Action says digital advertising spend reached $490 billion in 2021. It is also an extremely valuable industry for Google, because it dominates web search so heavily.
Allegations Against Google
At the core of the claim is the allegation that Google is abusing that dominance, reducing the income websites get. Ad Tech Collective Action says Google has engaged in what is known as “self-preferencing” – in other words promoting its own products and services more prominently than that of its rivals. It says that means publishers end up getting less money for the ads they host as well as having to pay “very high” fees to Google.
“I look forward to working with our legal and economic advisers to deliver compensation for years during which the relevant markets did not provide a competitive outcome for the UK publishing market,” Mr Pollack said.
Legal and Regulatory Context
But it will be a long time before any of this is resolved – it has already taken eighteen months to get to this point, and no court date has been set. The case is what is known as opt-out, meaning all relevant UK publishers are included unless they indicate otherwise. It is being funded by an unknown third-party, and says UK publishers who form part of the claim will not pay costs to participate.
It comes as Google faces probes by regulators in the UK, Europe and US into its adtech business, while the firm has already faced fines valued at billions of pounds from the European Commission over what it labelled anti-competitive behaviour.
Conclusion
The legal battle ahead is set to be a significant test for Google, with major implications for the online advertising industry. As the case proceeds to trial, the outcome will be closely watched by publishers, advertisers, and regulators worldwide.
