Google is facing a potential £5 billion ($6.6 billion) lawsuit in the UK over allegations that it leveraged its overwhelming dominance in the online search market to inflate advertising prices. A class action filed on Wednesday in the U.K. Competition Appeal Tribunal accuses Google of using its market power to restrict competition and solidify its monopoly, ultimately making itself the only viable option for online search advertising.
Key Points:
- A class action lawsuit filed in the U.K. claims Google exploited its “near-total dominance” in the online search market, driving up prices and hindering competition.
- The suit, seeking over £5 billion in damages, targets Google’s search advertising practices from January 1, 2011, to the present.
- A 2020 study by the U.K. Competition and Markets Authority (CMA) revealed Google controls 90% of the search advertising market.
The lawsuit, led by competition law academic Or Brook, represents hundreds of thousands of U.K.-based organizations that used Google’s search advertising services between January 1, 2011, and the present. Brook, who is being represented by Geradin Partners law firm, argues that Google’s monopolistic practices have forced businesses of all sizes to rely on Google’s advertising platform, giving the tech giant unchecked control over online visibility.
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“UK businesses have no choice but to use Google ads to reach customers,” Brook said in a statement. “Google’s monopoly power in search and search advertising has allowed it to overcharge advertisers. This lawsuit seeks to hold Google accountable and secure compensation for UK businesses that have been exploited.”
The class action follows a 2020 investigation by the U.K.’s CMA, which found that Google captured a staggering 90% of the search advertising revenue in the country. The lawsuit claims Google has taken several measures to further suppress competition, including deals with smartphone manufacturers to pre-install its search engine and Chrome browser on Android devices, as well as multi-billion dollar agreements with Apple to make Google the default search engine on Safari.
Moreover, the suit highlights that Google has made its own search advertising tools, like Search Ads 360, more attractive by offering better features than those of its competitors, further consolidating its dominant position.
The legal action adds to a growing list of antitrust challenges faced by Big Tech companies. In 2018, Google was fined €4.3 billion ($4.9 billion) by the European Union for unfairly bundling its Chrome browser and search engine with Android, a penalty it continues to appeal. This latest case underscores the increasing scrutiny of tech giants’ market practices, as regulators globally ramp up efforts to tackle monopolistic behavior in the digital age.
Additionally, the U.K.’s CMA has recently raised concerns about competition in the cloud computing market, with investigations into Amazon and Microsoft underway. The tech sector is clearly under the microscope, with Big Tech firms facing unprecedented legal challenges worldwide.
