The online advertising market is a multi-billion dollar industry, and Google sits at the heart and brain of it. However, following a trend that has been seen globally, Google is set to face a major challenge in the form of a £13.6 billion ($17.4 billion) lawsuit filed by Ad Tech Collective Action LLP, a group representing UK publishers. The Competition Appeal Tribunal (CAT) in London has ruled that the case can proceed to trial. The lawsuit and the CAT’s decision to allow it to go to court comes at a time when regulators and courts worldwide are doubling down on investigating the influence of these companies in digital ecosystems.
The crux of the lawsuit revolves around Google’s alleged anti-competitive behavior within the ad tech ecosystem, and Ad Tech Collective Action alleges that Google has abused its dominant position in the online advertising technology (ad tech) space, causing significant financial losses to UK publishers and prioritizing its own advertising products and services over those of its competitors. According to the lawsuit, Google’s self-preferencing leads to publishers receiving lower compensation for the ads displayed on their platforms. This is because with Google prioritizing its own ad products, there is less competition for ad space, potentially driving down prices.
And if this is not enough, Ad Tech Collective Action further alleges that Google charges high fees to publishers who want to participate in its ad tech platform. These fees can eat into a publisher’s already squeezed profit margins, especially if they are not receiving competitive rates for ad placements. For its part, unsurprisingly, Google strongly refutes the allegations. The tech giant maintains that the lawsuit is “incoherent” and “speculative.” Google argues that its ad tech business has a positive impact on the industry, and intends to defend itself in court.
The trial could potentially be a landmark one. For Google, a loss in court could result in hefty fines, potentially running into billions of pounds. The company may also be forced to change its ad tech practices to comply with stricter regulations. For the greater digital advertising industry, the outcome of the lawsuit could set a precedent for future antitrust cases against tech companies. A ruling in favor of the publishers could lead to stricter regulations for dominant players in the ad tech space, potentially creating a more level playing field for smaller competitors. This could ultimately benefit publishers by increasing competition for ad space and potentially driving up the prices they receive.
“This is a decision of major importance to the victims of Google’s anti-competitive conduct in ad tech. Google will now have to answer for its practices in a full trial. 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,” Claudio Pollack, a partner of Ad Tech Collective Action, commented on the matter. So far, the court date is yet to be set for the trial.
