In a landmark legal battle, UK publishers are suing Google for £3.4 billion ($4.2 billion) in damages, alleging that the tech giant abused its dominance in display advertising since 2014. This development follows similar scrutiny faced by Google in the United States, where the Department of Justice and eight states have sued the company in an effort to dismantle its ads division. The outcome of these ongoing lawsuits and antitrust investigations could lead to significant changes for online advertisers, impacting both publishers and advertisers.
The Lawsuit
The claim was filed by journalist Charles Arthur, a former technology editor for UK news publisher The Guardian, on behalf of all UK publishers of websites and apps in the UK’s Competition Appeal Tribunal (CAT). The central issue of the lawsuit is that Google has breached competition law by abusing its dominant position in online advertising.
Key Allegations
Charles claims that Google gave preferential treatment to its own ad tech products (e.g., Google Ad Manager). As a result, market-wide prices for all ad tech services were increased, and businesses and individuals who sold ad impressions on websites and apps using these services received less compensation than they would have absent Google’s breaches of competition law.
Google’s Response
Google has dismissed the lawsuit as “speculative and opportunistic,” maintaining that its ad tech products, along with those of its many competitors, help millions of websites and apps fund their content and enable businesses of all sizes to effectively reach new customers, according to the BBC.
A Second Lawsuit on the Horizon
This is not the only lawsuit Google is facing in the UK. In November 2022, Ofcom director Claudio Pollack filed a similar lawsuit seeking up to £13.6 billion in damages.
Opt-Out Collective Claims
Both of these lawsuits are collective claims, the equivalent of a U.S. class action lawsuit. The BBC reports that both legal claims ask the Competition Appeal Tribunal to certify their claims as “opt-out,” meaning every relevant publisher would be automatically included in the case unless they choose otherwise.
The Bigger Picture
Google’s legal troubles extend beyond the UK. In the United States, the company is facing lawsuits from the Department of Justice and eight states, which aim to dismantle Google’s ads division. Google had hoped to avoid this by offering to restructure its ad tech business. Moreover, due to EU scrutiny, Google has offered to show ad rivals on YouTube.
Why This Matters
The outcomes of these ongoing lawsuits and antitrust investigations could eventually result in meaningful changes for online advertisers, impacting publishers’ ad revenue and advertisers’ reach. As these developments unfold, the future of online advertising and the balance of power within the industry remain uncertain.
