A UK court has ruled that Google must face a £13.6 billion lawsuit accusing the tech giant of having excessive control over the online advertising sector.
The lawsuit, filed by a group known as Ad Tech Collective Action LLP, claims that Google engaged in anti-competitive practices that led to financial losses for online publishers in the UK.
Alphabet, Google’s parent company, dismissed the claims as “incoherent” in its efforts to have the case dismissed.
However, the Competition Appeal Tribunal in London has allowed the case to proceed to trial.
Former Ofcom director Claudio Pollack, now a partner in Ad Tech Collective Action, described the ruling as significant for those affected by Google’s alleged anti-competitive behavior in adtech.
Google’s legal director, Oliver Bethell, countered the lawsuit, calling it “speculative and opportunistic” and vowed to vigorously defend against it.
The lawsuit revolves around advertising technology, commonly referred to as adtech, which dictates the display of online ads and their costs to publishers.
Online ad hosting represents a substantial revenue stream for numerous websites, with digital ad spending reaching $490 billion in 2021 according to Ad Tech Collective Action.
Google holds a dominant position in the web search market, making the ad industry immensely valuable to the company.
The crux of the lawsuit alleges that Google is exploiting its dominance, causing decreased earnings for websites.
Ad Tech Collective Action claims that Google practices “self-preferencing,” favoring its own products and services over competitors, resulting in reduced revenues for publishers and high fees paid to Google.
Mr. Pollack expressed eagerness to seek compensation for the period when the UK publishing market lacked competitive outcomes due to alleged anti-competitive practices.
Resolving this legal issue is expected to be protracted, having already taken eighteen months to reach this stage with no set court date.
The lawsuit follows an opt-out approach, including all relevant UK publishers unless they opt out. It is financially backed by an undisclosed third party, with participating UK publishers not required to cover costs.
Simultaneously, Google is under scrutiny by regulators in the UK, Europe, and the US regarding its adtech operations. The company has faced significant fines from the European Commission for what was deemed as anti-competitive behavior.
