Google faces new multi-billion advertising lawsuit

A lawsuit has been filed against Google to seek £3.4bn ($4.2bn) in compensation for publishers for lost revenue.

The claim, by ex-Guardian technology editor Charles Arthur, alleges Google unlawfully used a dominant position in online adverts in a way that reduced what publishers could make from them.

Google said it would fight the “speculative and opportunistic” action vigorously.

It is the second such lawsuit, after a similar case was launched in November.

That was brought by former Ofcom director Claudio Pollack, who is looking for up to £13.6bn in damages from the tech giant.

The cases concern advertising technology – adtech – that decides in a fraction of a second which online adverts consumers will see, how much they will cost, and how much publishers will earn.

Online display advertising is the main source of income for many websites.

The UK competition regulator, the Competition and Markets Authority (CMA), is also investigating Google’s dominance in advertising technology.

In the lawsuit, which was filed on Thursday, Mr Arthur claims that because of Google’s abuse of its position, the prices of adtech services were inflated, and ad sales revenues of publishers were unlawfully reduced.

“The CMA is currently investigating Google’s anti-competitive conduct in adtech, but they don’t have the power to make Google compensate those who have lost out. We can only right that wrong through the courts, which is why I am bringing this claim,” he wrote.

Both legal claims ask the court – the Competition Appeal Tribunal – to certify their claims as “opt-out”, meaning every relevant publisher would be automatically included in the case unless they choose otherwise.

These are collective claims, often referred to as a class action in the United States, which only became possible in the UK in 2015. Because they are brought on behalf of a whole group or class, the damages can be very large.

Unless Mr Arthur and Mr Pollack agree to collaborate, the tribunal will have to decide which one should lead the collective claim

Google told the BBC its advertising tools, “and those of our many adtech competitors, help millions of websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers”.

Although the CMA found that Google owned the largest provider in three key areas of adtech, the firm maintains it has many competitors. It also says its adtech fees are lower than, or match, industry averages.

But in a case launched in January, the US Justice department accused Google of being an “industry behemoth” that had “corrupted legitimate competition in the adtech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers”.

On Tuesday, Google asked a court to dismiss the case – arguing that the US government had overstated its hold on the market.

In 2021 the French competition regulator, Autorité de la concurrence, fined Google €220m for favouring its own services in the online advertising sector.