Google faces potential $5.6 billion UK antitrust lawsuit over search advertising
Summary
The lawsuit claims the tech giant abused its dominance and overcharged companies for search advertising services.Google is facing a potential 5 billion-pound ($5.64 billion) collective action lawsuit in the U.K. that claims it abused its dominance and overcharged companies for search advertising services.
The claim filed Wednesday–brought by British competition law academic Or Brook represented by law firm Geradin Partners–argues that Alphabet-owned Google abused its dominant position in the digital economy to exclude competitors from the general search and search advertising markets, allowing it to charge higher prices for search ads.
A Google spokesperson said the case was speculative and opportunistic. “We will argue against it vigorously," the spokesperson said, adding that consumers and advertisers turn to the company because it is helpful.
The action is being taken on behalf of U.K. organizations that published Google ads from January 2011 until when the claim was filed.
“Google is one of the most powerful companies in the world. However, through a range of deliberate and exclusionary practices, it has sought to eliminate its rivals and dominate the search advertising market, ultimately overcharging U.K. advertisers by billions of pounds," Damien Geradin, founder of Geradin Partners, said.
The claim that Google’s business terms, such as requiring device manufacturers to set its own search and Chrome browser apps as defaults on Android devices and a revenue-sharing deal with Apple over how its Safari browser showcases Google Search, breach competition law. It also claims that Google gives its own advertising offering, Search Ads 360, better functionality with its own products compared to rivals.
It argues that advertisers who used Google’s services could be owed roughly 5 billion pounds in damages.
Google has for years fielded complaints from rivals who claim it uses its existing dominance in the digital economy to keep competitors at bay. The U.K.’s Competition and Markets Authority said in September that Google might be stifling competition by favoring its own ad tech services that advertisers and publishers use to bid for and sell advertising space. The European Commission is also in advanced stages of an investigation into Google’s ad tech business.
Write to Edith Hancock at edith.hancock@wsj.com
