£13.6bn claim against Google adtech abuse opens

google_2A group of media owners and advertisers are heading to the UK Competition Appeal Tribunal today to open their legal action against Google that alleges the tech giant is abusing its power in the digital ad market, leading to billions of pounds in ad revenue being lost.

The British claim, which is being supported by similar action in the Netherlands, will seek to recover £13.6bn in compensation for lost revenue from the sale of advertising space on the websites of news publishers and any site funded by online advertising.

The Ad Tech Collective Action (ATCA) group challenges a number of mutually reinforcing abuses of dominance by Google in relation to its adtech business, which intermediates between advertisers and publishers in order to display online advertisements (“ads”) on web sites or mobile apps.

At heart of the issue, the ATCA aurgues that the abuses are stark examples of abusive self-preferencing by Google. It claims that on both the supply- and the demand-side of online advertising, Google dramatically favours its own services. As a result, Google has, for some years now, created, and maintained, multiple near-monopolies within the adtech stack, spanning an entire area of the economy worth hundreds of billions globally.

Since Google has been able to avoid effective competition by favouring its own services, the anticompetitive effect on the proposed class members (PCMs) has been to increase the commission charges (or “take-rates”) they have to pay, while reducing the prices at which they can sell their ad space (“gross price effect”).

The group maintains that the abusive nature of the Google conduct at issue has already been established by the French competition authority (CCA). The UK Competition & Markets Authority (CMA) and the Australian competition authority (ACCC) have also published reports stating Google’s conduct is anti-competitive.

It points out that several further findings are imminent in proceedings before the CMA and the European Commission as well as in complaints being litigated in the US by the Department of Justice Antitrust Division and 17 State Attorneys General.

Furthermore, the collective argues that contemporaneous internal Google documents referred to in those proceedings provide strong support for the its counterfactual and methodology and the robustness of the scale of damages claimed.

Evern so, the collective insists that Google has barely engaged with any of the regulatory findings or the damaging internal documents.
At the time the case first emerged, Toby Starr, a partner at UK legal firm Humphries Kerstetter, said: “This important claim will represent a class of victims of Google’s anti-competitive conduct in ad tech who have collectively lost billions.

“This includes news websites up and down the country with large daily readerships as well as the thousands of small business owners who depend on advertising revenue – be it from their fishing website, food blog, football fanzine or other online content they have spent time creating and publishing.”

The UK claim will be “opt out”, meaning that affected parties will be automatically treated as part of the claim, while the EU claim will be lodged in the Netherlands will be “opt in”, meaning would-be claimants need to apply to join the suit. Starr said he expected “many thousands” of parties in the UK to be part of the claim.

The combined lawsuits are seeking total compensation that, according to some estimates, could reach €25bn.

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