In a significant legal development, Google is now confronting a multibillion-pound lawsuit filed by UK consumers who allege the tech giant’s actions have contributed to rising living costs in the country. The lawsuit, representing all UK consumers, accuses Google of stifling competition in the search engine market, resulting in increased prices across the UK’s economy.
Allegations of Competition Law Violations
The legal action, submitted to the Competition Appeal Tribunal, contends that Google has violated competition laws, leading to a higher cost of living for every UK consumer. The lawsuit alleges that Google’s monopolistic control over mobile searches and its manipulation of advertising prices have had a direct impact on consumers.
Stifling Competition and Price Inflation
Google stands accused of eliminating competition in the mobile search arena and leveraging its market dominance to inflate advertising costs for businesses seeking placement on Google’s search page. These increased costs are then passed on to consumers, exacerbating the cost of living.
A Class Action Supported by Hereford Litigation
Funding for this class action lawsuit comes from Hereford Litigation, a global commercial litigation funder. Nikki Stopford, co-founder of Consumer Voice and the class representative, expressed the aim of this action: “In addition to recovering people what they are owed, our lawsuit seeks to make things right by holding Google accountable for its deeds.”
Estimated Compensation and Widespread Impact
The lawsuit seeks an estimated compensation of £7.3 billion for approximately 65 million UK users over the age of 16, translating to an average of at least £100 per person. These claims highlight the widespread impact of Google’s alleged actions on UK consumers.
International and National Scrutiny
Earlier this year, the US Department of Justice and eight states filed lawsuits against Google, alleging abuse of its dominance in the digital advertising sector. Meanwhile, the UK’s Competition and Markets Authority (CMA) initiated an investigation into Google’s potential abuse of its dominant position in ad tech.
The Role of Google Ads
Google Ads, which generated over $224 billion in revenue in 2022, accounted for nearly 80% of Alphabet’s total revenue for the same year ($283 billion in 2022). This substantial financial influence underscores the significance of the allegations against Google.
In response to the lawsuit, a Google spokesperson stated, “We will strongly contest this speculative and opportunistic case. Google is used by people because it is useful. Only when users click on the adverts, which is determined by their utility and relevance, can we earn money, and only at a cost determined by a live auction? People are greatly aided in their quest to learn about new enterprises, causes, and goods through advertising.”
The lawsuit against Google unfolds amid growing global scrutiny of tech giants’ market practices and their impact on consumers and competition.