Google Hit With New Lawsuit For Restricting Ad Competition

Google is facing a multi-billion dollar lawsuit in the UK, brought by a British journalist, claiming it has a stranglehold on the ad tech market.

The collective claim for £3.6 billion ($3.9 billion) alleges that the company has a stranglehold on the UK’s display ad market, worth £3.6 billion annually.

The UK’s Competition and Markets Authority has found that Google controls between 50 and 90 per cent of the complex intermediary markets in ad tech, which control the ads users see and the payments to advertisers.

And, claims the lawsuit, Google’s been unlawfully restricting competition by favoring its own ad tech services and charging inflated prices to publishers since at least 2014.

This, says Arthur, has raised prices for ad tech services across the board, costing publishers up to 19 per cent of their revenue.

“Google has inserted itself between advertisers and publishers in the online display ad market by riding a wave of technological development that it claims has brought benefits to publishers. This is not true: as a result of Google’s conduct publishers have suffered losses running into billions of pounds,” says Arthur.

“The UK Competition and Markets Authority is currently investigating Google’s anti-competitive conduct in ad tech, but they don’t have the power to make Google compensate those who have lost out. We can only right that wrong through the courts, which is why I am bringing this claim.”

The case is just the latest to make similar allegations against the firm. In January, for example, the US Justice department and eight states filed a similar case, alleging that the company was abusing its position.

“Google has thwarted meaningful competition and deterred innovation in the digital advertising industry, taken supra-competitive profits for itself and prevented the free market from functioning fairly to support the interests of the advertisers and publishers who make today’s powerful internet possible,” the lawsuit reads.

Meanwhile, similar accusations have been made in the EU, Australia and France, where in June 2021, the French competition authority ruled that Google had abused its dominant position in the ad tech market. Google accepted a fine of €220 million and agreed to change its practices.

And there’s another similar lawsuit in the UK, launched last November by Claudio Pollack, former director of regulator Ofcom, seeking damages of up to £13.6 billion.

Both cases are intended as collective claims, with the decision on this to be made by the Competition Appeal Tribunal. Collective claims are similar to a US class action, and would include every relevant publisher unless they choose to opt out. As both Arthur and Pollack have secured third party funding, publishers would not be expected to pay to take part in the action, or carry any financial risk in relation to Google’s costs.

Arthur is being represented by law firm Hausfeld LLP.

“We look forward to working with our client to return compensation to websites and apps who have lost out, and to help to put a stop to Google’s anti-competitive conduct in the future,” says partner Luke Streatfeild.

Google is planning to fight.

“Google works constructively with publishers across the UK and 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,” it says in a statement.

“These services adapt and evolve in partnership with those same publishers. This lawsuit is speculative and opportunistic. We’ll oppose it vigorously and on the facts.”