A lawsuit has been filed against Google, seeking $4.2bn in compensation for publishers who claim to have lost revenue due to the tech giant’s alleged abuse of its dominant position in online advertising. The claim has been brought by former Guardian technology editor Charles Arthur, who argues that Google’s actions have reduced publishers’ earnings from online adverts.
Google has stated that it will vigorously contest the “speculative and opportunistic” lawsuit. This marks the second legal challenge of its kind, with a similar case initiated in November by ex-Ofcom director Claudio Pollack, who is seeking up to £13.6bn in damages.
Both lawsuits revolve around advertising technology (ad tech) that determines which online advertisements consumers see, their cost, and publishers’ earnings in a matter of milliseconds. Online display advertising is a primary source of income for many websites.
The UK’s Competition and Markets Authority (CMA) is also investigating Google’s dominance in the ad tech sector. In his lawsuit filed on Thursday, Arthur alleges that Google’s abuse of its position has inflated ad tech service prices and unlawfully reduced publishers’ ad sales revenues.
Arthur stated that although the CMA is investigating Google’s anti-competitive conduct in ad tech, they lack the authority to compel Google to compensate those who have suffered losses. He believes that legal action is the only way to correct this injustice.
Both Arthur’s and Pollack’s legal claims request that the Competition Appeal Tribunal certify their cases as “opt-out” collective claims. This means that all relevant publishers would automatically be included in the case unless they decide to opt-out. Collective claims, similar to class actions in the United States, have only been possible in the UK since 2015. These claims are brought on behalf of an entire group or class, which can lead to substantial damages.
Google maintains that its advertising tools, along with those of numerous ad tech competitors, support millions of websites and apps in generating revenue and help businesses of all sizes effectively reach new customers. While the CMA found that Google has the largest share in three key ad tech areas, the company insists that it faces significant competition and that its ad tech fees are lower than or equal to industry averages.
