Google sued for $6.6 billion in UK for abusing dominance in search

Google is being sued in the UK over allegations that the tech giant abused its dominance in the online search market to drive up prices

Google is facing a $6.6 billion (5 billion pounds) class-action lawsuit in the UK for potential damages over allegations that the tech giant abused its dominance in the online search market to overcharge businesses for advertising. 

 

The lawsuit, filed on Wednesday with the UK’s Competition Appeal Tribunal, alleges that Google used its market power to inflate fees for ads displayed in its search results — costs that, the suit claims, would have been lower in a truly competitive marketplace.

 

What does the lawsuit claim? 

The lawsuit argues that Google forced mobile device manufacturers to pre-install its search application and Chrome browser on Android devices, which has allowed the company to ‘charge supra-competitive ad prices’ that drive up prices for search advertising and losses for the companies that depend on ad revenue. The suit also alleges Google paid Apple ‘billions of pounds’ to set up Google as the default search engine on Safari.  

 

 

The legal claim has been filed by competition law specialist Or Brook representing thousands of businesses, and asserts that Google designed its search engine to provide superior functionality and features for its own advertising services compared to those of its competitors.

 

“Today, UK businesses and organisations, big or small, have almost no choice but to use Google ads to advertise their products and services,” Brook said. Regulators around the world have described Google as a monopoly and securing a spot on Google’s top pages is essential for visibility, she said.

 

Google’s response to lawsuit

Google called the case “yet another speculative and opportunistic case”, mentioning that it plans to “argue against it vigorously”. “Consumers and advertisers use Google because it is helpful, not because there are no alternatives,” a company spokesperson said.

 

A 2020 market study from the Competition and Markets Authority (CMA) — the UK’s competition regulator — found that 90 per cent of all revenue in the search advertising market was earned by Google.

 

Google, Meta under fire 

This is the most recent legal challenge for the search giant. In recent years, Big Tech firms from Google to Meta have faced numerous lawsuits and regulatory investigations over concerns about their extensive power and influence. In 2018, the European Union fined Google 4.3 billion euros ($4.9 billion) for misusing its dominant position with the Android mobile operating system by requiring smartphone manufacturers to pre-install Chrome and Search bundled with its Play app store. Seven years later, Google continues to appeal this antitrust penalty. This week, an antitrust lawsuit brought by the Federal Trade Commission against Meta officially entered the courtroom in a landmark trial that could potentially force the social media company to divest its Instagram and WhatsApp platforms.