Google Faces £13.6B UK Legal Battle Over Alleged Ad Market Dominance

Google must face a £13.6 billion lawsuit alleging it has abused its dominance in the U.K. online advertising market, according to a recent court ruling. The case, brought by Ad Tech Collective Action LLP, claims that the tech giant’s anti-competitive practices have led to significant financial losses for online publishers in the U.K.

Alphabet Inc., Google’s parent company, attempted to dismiss the lawsuit, describing it as “incoherent.” However, the Competition Appeal Tribunal in London has decided that the case can proceed to trial.

“This is a decision of major importance to the victims of Google’s anti-competitive conduct in AdTech,” stated Claudio Pollack, a former Ofcom director and now a partner at Ad Tech Collective Action. “Google will now have to answer for its practices in a full trial.”

Despite the ruling, Google’s legal director, Oliver Bethell, labeled the lawsuit as “speculative and opportunistic,” pledging to vigorously oppose the claims on factual grounds.

The case centers on advertising technology, or AdTech, which determines the online ads users see and their associated costs. Ad Tech Collective Action argues in the U.K. lawsuit that Google’s dominant position in web search has allowed it to manipulate the AdTech market to its advantage. This alleged “self-preferencing” behavior, where Google promotes its own products and services over those of its competitors, purportedly reduces the revenue that publishers receive from hosting ads and imposes excessively high fees on them.

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Ad Tech Collective Action contends that this conduct has stifled competition and resulted in an unfair market for U.K. publishers. Digital advertising spending reached $490 billion in 2021, highlighting the substantial economic stakes involved.

“I look forward to working with our legal and economic advisers to deliver compensation for years during which the relevant markets did not provide a competitive outcome for the UK publishing market,” Pollack said.

The legal process has been lengthy, taking eighteen months to reach this stage, with no trial date set. The case is an opt-out collective action, meaning all relevant U.K. publishers are included unless they choose to withdraw. The lawsuit is backed by an undisclosed third party, ensuring that U.K. publishers involved will not incur costs for participating.

As the legal battle unfolds, it remains to be seen how Google’s AdTech practices will be scrutinized and whether the lawsuit will lead to substantial changes in the digital advertising landscape.

Source: BBC