2 weeks Ago By Joe Gallop
Shares in Google parent Alphabet Inc. took a hit overnight, falling 2.2% in premarket trading after the tech giant was hit with a massive class action lawsuit in the UK.
The claim, which could cost the company up to £5 billion (AU$10.4 billion), accuses Google of abusing its dominant position in the online search and advertising markets. Filed in the UK’s Competition Appeal Tribunal on Wednesday, the lawsuit alleges that Google unfairly excluded competitors and overcharged British advertisers by billions of pounds.
The action is being brought on behalf of all UK-based organisations that used Google’s search advertising services between January 1, 2011 and the present. The case is being led by competition law academic Or Brook and law firm Geradin Partners, with plaintiffs claiming that Google’s restrictive contracts with smartphone manufacturers and its billion-dollar revenue-sharing agreement with Apple helped it entrench its dominance. “Google is one of the most powerful companies in the world.
However, through a range of deliberate and exclusionary practices, it has sought to eliminate its rivals and dominate the search advertising market,” said Geradin Partners founder Damien Geradin. The lawsuit also claims that Google gave preferential treatment to its own advertising platform, Search Ads 360, at the expense of competing tools – allegedly breaching UK competition laws and costing advertisers dearly. Alphabet has dismissed the case as “speculative and opportunistic,” with a company spokesperson saying it plans to “argue against it vigorously.
” Google maintains that advertisers use its platform because it is effective, not because they lack alternatives. The legal action follows mounting scrutiny of Big Tech across the globe. Google is already facing regulatory probes in the US and EU, with the UK’s Competition and Markets Authority previously warning that the company’s dominance may be stifling fair competition in ad tech.
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