Google is facing a significant legal challenge in the UK as approximately 250,000 businesses have filed a class action lawsuit against the tech giant, seeking a staggering £5 billion ($6.6 billion) in damages. The lawsuit, lodged with the Competition Appeal Tribunal (CAT), alleges that Google abused its dominant position in the online search and advertising markets, effectively stifling competition and overcharging UK advertisers.
According to the law firm Geradin Partners, which is spearheading the case, Google’s actions since 2011 have constituted a deliberate effort to eliminate rivals and dominate the search advertising market. "Through a range of deliberate and exclusionary practices, it has sought to eliminate its rivals and dominate the search advertising market, ultimately overcharging UK advertisers by billions of pounds," said Damien Geradin, the founding partner of the firm.
This lawsuit is not an isolated incident; it follows a similar class action filed against Google in 2023, which sought £7 billion in compensation for consumers. Moreover, last year, a £13.6 billion claim was made against the company for alleged anti-competitive behavior in digital advertising, both of which are still ongoing.
The Competition and Markets Authority (CMA) in the UK is also investigating Google's alleged dominance in the search engine market, which could lead to the company being classified as having "strategic market status" under new UK regulations. This status would impose special requirements on Google, reflecting the growing scrutiny of its business practices.
As part of the current lawsuit, the plaintiffs argue that Google has been able to charge supra-competitive ad prices due to its monopoly-like status. The suit claims that Google has forced phone manufacturers to preinstall its search engine and Chrome browser on Android devices, further solidifying its market position. Additionally, it alleges that Google has paid Apple billions to ensure that its search engine is the default on Safari, limiting consumer choice.
Or Brook, an associate professor in competition law at the University of Leeds and a representative for the plaintiffs, stated, "Today, UK businesses and organizations, big or small, have almost no choice but to use Google ads to advertise their products and services. This class action is about holding Google accountable for its unlawful practices and seeking compensation on behalf of UK advertisers who have been overcharged." The claim, if successful, would compensate any business that purchased Google ads from January 1, 2011, to April 15, 2025.
In 2023 alone, Alphabet, Google's parent company, reportedly generated £14 billion (€16.35 billion) in search advertisement revenue, highlighting the financial stakes involved in this lawsuit.
Google has responded to the lawsuit by labeling it as “yet another speculative and opportunistic case.” A spokesperson for the company emphasized that consumers and advertisers choose Google because it provides valuable services, not because there are no alternatives available. They stated, "We will argue against it vigorously. Consumers and advertisers use Google because it's helpful, not because there are no alternatives."
The ongoing legal battles reflect a broader trend of increasing scrutiny on major tech companies regarding their business practices. The UK’s CMA is actively examining whether Google holds significant market power in the search engine and advertising sectors, a concern echoed by regulatory bodies across the globe.
Earlier this week, Japan issued a "cease-and-desist" order to Google for alleged violations of antitrust laws, marking a significant first in the country’s regulatory history. This action underscores the global nature of the scrutiny facing Google and similar tech giants.
The outcome of the UK lawsuit could have far-reaching implications not only for Google but also for the future of competition in the digital advertising space. Should the plaintiffs prevail, it may set a precedent for how tech companies operate in the UK and potentially influence regulations in other jurisdictions.
As the case unfolds, it will be watched closely by businesses, regulators, and consumers alike, all eager to see how this landmark lawsuit will shape the landscape of online advertising and competition. The stakes are high, and the implications could resonate well beyond the UK, impacting how tech giants are held accountable for their market practices.
