New Class Action Targets Google’s Search Advertising Practices
Google is facing renewed legal scrutiny in the UK with a substantial antitrust class action lawsuit seeking up to £5 billion ($6.6 billion) in damages. The lawsuit, recently filed at the UK’s Competition Appeal Tribunal, accuses Google of abusing its dominant market position in online search advertising, allegedly resulting in inflated prices charged to hundreds of thousands of British businesses. Competition-law academic Or Brook is leading the legal action, which claims Google’s commercial tactics have significantly disadvantaged competitors, effectively cementing its monopoly in search advertising and limiting consumer choice.
The lawsuit specifically accuses Google of striking exclusive deals. Plaintiffs contend that Google contracted with mobile phone manufacturers to pre-install its Search app and Chrome browser on Android devices. Additionally, the claim alleges Google paid Apple substantial sums to maintain its search engine as the default choice on iPhones. These actions are alleged to have harmed competing search providers and driven up advertising costs, ultimately impacting a vast number of businesses across the UK.
The lawsuit seeks damages for all UK-based firms that used Google’s advertising services after 2011, arguing that these companies were overcharged as a direct result of Google’s competitive practices. This is part of a broader wave of regulatory and legal challenges the company faces globally regarding its business conduct.
“Google has systematically abused its market dominance to suppress competition and inflate prices, harming businesses and consumers alike. This lawsuit seeks redress for all affected UK firms,” stated Or Brook, who is spearheading the class action.
Google dismissed the lawsuit as “speculative and opportunistic,” maintaining that its services are popular because users and advertisers find them useful and effective.
Chronology and Allegations of Google’s Market Behavior
The central accusation in this class action is rooted in a series of practices Google allegedly implemented starting from January 2011. By entering into exclusive agreements with hardware manufacturers and mobile operators, Google is said to have significantly restricted opportunities for rival search engines to compete fairly in the marketplace. These deals reportedly encouraged manufacturers to pre-install Google’s search and browsing services by default, effectively stifling the visibility and competitiveness of rival services.
This class action is not an isolated incident. Google is currently facing another major UK class action, involving approximately £7 billion, addressing alleged anti-competitive practices specifically within the mobile search market. Additionally, authorities globally, including in the European Union and the United States, have repeatedly scrutinized Google’s competitive practices. The EU has already fined Google billions of euros over antitrust violations related to its search dominance and mobile operating systems.
The UK’s Competition and Markets Authority (CMA) has noted Google’s substantial market control, highlighting that Google accounts for approximately 90% of UK search traffic and is regularly utilized by over 200,000 UK businesses for advertising.
“Google’s dominance is unparalleled in many markets, but the UK presents a particularly stark example, with an overwhelming market share influencing the digital advertising landscape,” said a spokesperson from the Competition and Markets Authority.
The CMA itself launched an official investigation into Google’s search advertising practices in January, further evidencing the increasing regulatory focus on the company’s influence over digital markets.
Historical Context and Broader Regulatory Implications
Google’s dominance in global search advertising has long attracted attention from competition regulators. Historically, antitrust authorities have highlighted concerns related to potential market abuses and the consequences for both competitors and consumers. In 2017, the European Commission fined Google €2.42 billion for unfairly favoring its own shopping comparison service. It was followed by another €4.34 billion fine in 2018 concerning unfair dominance in Android mobile devices. These landmark decisions reinforced ongoing international scrutiny into Google’s market strategies.
In the United States, Google has faced multiple investigations and lawsuits at both federal and state levels. The U.S. Department of Justice sued Google in 2020 for antitrust violations, challenging their practices in search engine dominance. These parallel actions underscore a consistent global concern regarding Google’s influence over digital markets.
This UK lawsuit continues a global narrative, potentially influencing future regulatory frameworks and setting precedent for tech industry accountability.
“Cases like this are critical in setting boundaries for digital giants. They serve as important markers for future regulatory frameworks,” said competition law expert Dr. Hannah Murphy.
Legal and economic experts suggest this litigation could have significant implications for future regulations governing digital markets, setting clearer boundaries on permissible competitive behavior. If successful, this lawsuit could lead Google to alter its business operations substantially, potentially opening new opportunities for competitors and benefiting consumers through increased competition and potentially lower prices. Irrespective of its outcome, the case highlights broader discussions about market fairness and competition within the rapidly evolving technology sector.