Google gears up for £20bn ‘ad tech’ claim that it pushes revenues away from newspapers
Google is being sued for up to €25bn (£21.6bn) over claims it has deprived other sites from obtaining billions of pounds in advertising revenues.
The class action complaints from both UK and the Netherlands argue that the Silicon Valley giant used its advertising tech to unfairly sideline publishers, like newspapers, magazine and blogs.
The main argument is that Google’s online ad auction tech has been used to distort competition, putting its own advertising publishing service at an advantage. Claimants argue that this has meant Google has been able to nab the majority of the ad revenue.
Partner at the UK law firm Humphries Kerstetter Toby Starr said alleged victims of Google’s anti-competitive conduct could have lost up to £7bn in revenues since 2014 because of the tech surrounding online banner ads.
Starr said the claim includes news websites up and down the country with large daily readerships as well as the thousands of small business owners who depend on advertising revenue.
The UK claim is likely to be an “opt out” claim, which means affected parties will be automatically treated as part of the claim. The EU claim is set to be lodged as an “opt in”.
The firm is planning to bring the case to the Competition Appeal Tribunal in the next few months, but could take a number of years to proceed.
The Competition Markets Authority launched an investigation into Google’s practices in ad tech in May.
This case follows on from the CMA’s market study into online platforms and digital advertising which identified significant issues and made an assessment of possible solutions to address market power in ad tech.
It is understood that the CMA’s investigation remains at an early stage and it has not drawn any conclusions.
Meanwhile, Belgian law firm Geradin Partners has said it plans to bring the claims to the Netherlands.
“Publishers, including local and national news media who play a vital role in our society, have long been harmed by Google’s anticompetitive conduct,” said Geradin Partners’ Damien Geradin.
“It is time that Google owns up to its responsibilities and pays back the damages it has caused to this important industry. That is why today we are announcing these actions across two jurisdictions to obtain compensation for EU and UK publishers.”
A Google spokesperson said the firm “works constructively” with publishers across Europe, calling the lawsuit “speculative and opportunistic”. “When it is received, we’ll fight it vigorously,” they said.
Senior Counsel at Charles Russell Speechlys Paul Stone told City PM that the lawsuits were a “mirror image” of ongoing investigations by the CMA.
“The difference is that, although the investigations could lead to significant fines being imposed on Google if anti-competitive conduct is found, the lawsuits would allow publishers to obtain compensation from Google for any anti-competitive conduct.
Given the potential for duplication, Google may well push for the lawsuits to be stayed pending the outcome of the investigations.” he said