- A £5 billion ($6.6 billion) class action lawsuit filed in the U.K. accuses Google (GOOG) of abusing its 90% dominance in search advertising to overcharge hundreds of thousands of U.K. organizations since January 1, 2011.
- The lawsuit alleges Google restricted competition by securing default search engine status on Android and Safari through deals with manufacturers and Apple, and by favoring its own advertising products in Search Ads 360.
- Led by Or Brook and Geradin Partners, the case seeks compensation for overcharged advertisers, while Google dismisses it as speculative and plans to defend itself vigorously.
The £5 billion ($6.6 billion) class action lawsuit filed against Google in the U.K. Competition Appeal Tribunal marks a significant challenge to the tech giant’s dominance in online search and advertising. Led by competition law academic Or Brook and backed by Geradin Partners, the case represents hundreds of thousands of U.K.-based organizations that relied on Google’s search advertising services since January 1, 2011. The plaintiffs, as per a CNBC report, argue that Google’s near-total control – evidenced by its 90% share of search advertising revenue, as reported by the U.K.’s Competition and Markets Authority in 2020 – has allowed it to inflate prices and stifle competition, harming advertisers across the board.
Google’s practices, the lawsuit claims, include strategic maneuvers to entrench its market position. By securing agreements with smartphone manufacturers to pre-install Google Search and Chrome on Android devices and paying Apple (AAPL) billions to remain the default search engine on Safari, Google has effectively limited the visibility of rival search engines. Additionally, the suit alleges that Google’s Search Ads 360 tool is designed to favor its own advertising products, offering superior functionality compared to competitors’ offerings. These actions, according to Brook, have left U.K. businesses with little choice but to rely on Google’s platform, where they face inflated costs due to the company’s monopolistic grip.
Brook emphasized the stakes, noting that securing a prominent spot on Google’s search pages is critical for organizational visibility in an increasingly digital economy. The lawsuit seeks to hold Google accountable for what it describes as unlawful overcharging, aiming to secure compensation for affected advertisers. Google, in response, dismissed the case as “speculative and opportunistic,” telling CNBC that its services are chosen for their utility, not a lack of alternatives. The company vowed to defend itself vigorously, signaling a contentious legal battle ahead.
The case taps into broader global scrutiny of Google’s market power. Regulators worldwide have long flagged the company’s dominance, with the U.K.’s own findings underscoring how Google’s 90% share of search advertising revenue reflects a market skewed in its favor. For U.K. advertisers, the outcome could reshape the digital advertising landscape, potentially curbing Google’s ability to dictate terms and prices. However, Google’s deep integration into the digital ecosystem – through Android, Chrome, and partnerships like its deal with Apple – poses a formidable barrier to meaningful competition. As the lawsuit progresses, it will test the U.K.’s resolve to address monopolistic practices in tech, with implications for advertisers and the broader online economy.
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