Google faces ‘first of its kind’ class action for search ads overcharging in UK
Google faces a “first of its kind” £5 billion lawsuit in the UK over accusations it has a monopoly in digital advertising that allows it to overcharge customers.
The suit was brought via law firm Geradin Partners but led by Or Brook, an associate professor of competition law at the University of Leeds, and filed at the UK Competition Appeal Tribunal on behalf of all affected UK businesses.
Google is accused of forcing mobile phone makers and network operators to preinstall Google’s Search and Chrome on Android devices, as well as paying Apple billions of pounds to make Google Search the default on its Safari browser.
Those tactics, the suit alleges, solidified Google’s default position and allowed the company to drive up prices for search advertising, costing its customers.
“Today, UK businesses and organizations, big or small, have almost no choice but to use Google ads to advertise their products and services,” said Brook in a statement.
“Regulators around the world have described Google as a monopoly and securing a spot on Google’s top pages is essential for visibility.”
Last year in the US, a judge ruled that Google had a monopoly in search, with the Department of Justice considering breaking up the wider company. In 2018, Google was fined €4.3 billion for abusing the dominance of the Android OS by requiring mobile makers to install Chrome and Search.
Similarly, earlier this year the UK’s Competition and Market Authority launched an investigation into Google’s search market share, noting that it holds 90% of all search queries.
In a LinkedIn post, Brooks said the lawsuit was unique because it sought to represent businesses, rather than individuals.
“We have now filed the first collective action of its kind in the UK that seeks redress for the direct harm caused to businesses (rather than consumers) who have been forced to pay sub-competitive prices for advertising space on Google pages,” she wrote.
Google is contesting the claims
A Google spokesperson dismissed the case, said the company would fight the allegations, and that customers weren’t forced to use Google advertising.
“This is yet another speculative and opportunistic case and we will argue against it vigorously,” the Google spokesperson told The Guardian. “Consumers and advertisers use Google because it is helpful, not because there are no alternatives.”
ITPro approached Google for comment, but had received no response at time of publication.
Suit claims Google is driving up prices
Brook said Google made use of its monopoly to raise prices due to lack of competition, noting that Google made £14 billion from search advertising in the UK alone last year.
“Google has been leveraging its dominance in the general search and search advertising market to overcharge advertisers,” Brook added. “This class action is about holding Google accountable for its unlawful practices and seeking compensation on behalf of UK advertisers who have been overcharged.
Beyond ensuring Search was the default on mobile devices, the lawsuit alleges that Google’s Search Engine Management Platform had better access to advertising than rivals.
The action seeks compensation for overcharges from 2011 to 2015, which is estimated to be in the region of £5 billion. Any payouts would depend on the settlement if the case is won, and calculated based on how much a company spent during the time period. The case is expected to take up to three years.
Companies that advertised via Google search in the indicated time frame will be automatically included in the class action, though they can choose to opt-out.
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