ACCC monitors $37b European lawsuit facing Google


Joseph Brookes
Senior Reporter

A $37 billion lawsuit facing Google in the EU and UK over alleged anticompetitive conduct in digital advertising is being monitored by the Australian competition regulator as it finalises recommendations for new regulation of digital markets.

Google, a key player in digital advertising and provider of the ‘adtech’ which coordinates the sale of online advertising around the world, has again been accused of abusing its dominant position at the expense online publishers.

On Tuesday, Belgian law firm Geradin Partners said it would lead actions on behalf of publishers for damages it estimates are up to €17 billion in the EU and up to £7 billion in the UK – around A$37 billion combined.

Google intends to fight the allegations it labelled as “speculative and opportunistic”.

Photo: achinthamb/Shutterstock.com

The Belgian firm is alleging Google abused its dominant position in the adtech market, costing online publishers like news sites and small businesses advertising revenue over several years. It said Google is the “largest and most important ad tech vendor at each step of the value chain”, holding market shares as high as 90-100 per cent.

According to the allegation, Google used this dominance to charge unfairly high revenue share of online ad sales and reduced the competition among ad exchanges – the digital marketplace that enables advertisers and publishers to buy and sell advertising space.

In June last year, Google was fined A$366 million by the French competition authority for self-preferencing its adtech services.

Geradin Partners announced on Tuesday that it will bring parallel damages actions in the UK and the Netherlands (covering the European Economic Area) on behalf of publishers.

“Publishers, including local and national news media who play a vital role in our society, have long been harmed by Google’s anticompetitive conduct,” Damien Geradin of Geradin Partners said.

“It is time that Google owns up to its responsibilities and pays back the damages it has caused to this important industry.”

The Australian Competition and Consumer Commission (ACCC) last year completed an 18-month study of the adtech sector, finding Google’s dominance is chilling adtech competition and driving up fees.

The ACCC recommended Google be more transparent in its adtech practices and that the watchdog be given new enforcement powers to enforce rules for the market.

On Wednesday, an ACCC spokesperson said, “The ACCC is aware of news reports of cases brought against Google alleging anti-competitive behaviour in the EU and the UK.

“We are monitoring the development of these cases.”

The ACCC is currently finalising a 2022 interim report of its ongoing Digital Platform Services Inquiry. It is considering whether there is a need for a new regulatory framework to address the competition and consumer concerns identified in digital platform services markets to date.

The ACCC’s previous chair who oversaw most of its digital platforms inquiries was a strong advocate for a new approach to regulating digital platforms.

The report with any such ACCC proposal for a new approach to regulating digital platforms is due to the Treasurer by the end of the month.

The Interactive Advertising Bureau this month estimated the Australian online advertising market was worth nearly $14 billion last financial year. The trade association, which represents a range of online publishers, advertisers and adtech companies in Australia, including Google, declined to comment on the UK and EU case or the state of competition in the local market.

A spokesperson for Google said the company intends to fight any legal action associated with the allegations.

“Google works constructively with publishers across Europe — our advertising tools, and those of our many adtech competitors, help millions of websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” a Google spokesperson told InnovationAus.com

“These services adapt and evolve in partnership with those same publishers. This lawsuit is speculative and opportunistic. When we receive the complaint, we’ll fight it vigorously.”

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