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Business April 3, 2023

Google Faces Multi-Billion Dollar Lawsuit for Cutting Publisher Revenue

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Google Faces Multi-Billion Dollar Lawsuit for Cutting Publisher Revenue

Google is facing a lawsuit demanding $4.2 billion in compensation for the revenue lost by publishers, reported the BBC. Charles Arthur, a former technology editor for The Guardian, has filed a claim alleging that Google used its dominant position in online advertising to unfairly reduce the revenue earned by publishers.

The tech giant has responded by stating that it will strongly contest this “speculative and opportunistic” action. This is the second lawsuit of its kind, following a similar case initiated in November by Claudio Pollack, a former Ofcom director seeking damages of up to £13.6 billion from the firm.

Arthur’s lawsuit, submitted on Thursday, alleges that Google’s exploitation of its dominant position led to an unjustifiable increase in the cost of adtech services and a subsequent unlawful reduction in ad sales revenue for publishers.

Read Also: Google Will Crush Microsoft and OpenAI, Argues Founder

“The CMA is currently investigating Google’s anti-competitive conduct in adtech, but they don’t have the power to make Google compensate those who have lost out. We can only right that wrong through the courts, which is why I am bringing this claim,” explained Arthur.

Previous investigation ongoing

Google is already under investigation by the Competition and Markets Authority (CMA) over its dominance in advertising technology, which is the main source of income for numerous websites.

The company says its 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.”

Despite the CMA’s finding that Google dominates three critical adtech sectors, the company argues it faces robust competition and that its adtech charges are equal to, or lower than, the industry average.

In a January case, the US Justice Department claimed Google had become an “industry behemoth” and had disrupted fair competition in the adtech industry.

It was alleged that the company had orchestrated a strategic campaign to gain control of various high-tech tools used by publishers.

The Autorité de la concurrence, the French competition regulator, imposed a €220m fine on Google in 2021 for showing preference towards its own services in the online advertising domain.

Google responded on Tuesday by urging the court to reject the lawsuit, claiming the US government had exaggerated its market dominance.

Google’s new ad transparency centre

Google has recently launched a new Ads Transparency Centre to help users quickly and easily learn more about the ads they see on Search, YouTube, and Display.

The company says it understands the importance of users wanting to know more about the ads they see online, and that over 30 million people engage with Google’s ads transparency and control menus every day.

“That’s why over the past five years, we’ve invested in delivering better ways for you to learn more about the ads you see and keep you in control,” wrote Alejandro Borgia, director of Ads Safety at Google, in a blog post.

The centre enables users to look up the advertiser and understand the ads they have run, which ads were shown in a certain region, the last date an ad ran and the format of the ad.

It builds on a history of transparency efforts, including a global advertiser identity verification program launched in 2020 and My Ad Centre, which was launched globally in 2020.

Users can access the Ads Transparency Centre directly or via My Ad Centre, and they can also like, block, or report an ad directly from the ads themselves.

The launch of the Ads Transparency Centre is part of the company’s commitment to creating a safer, more trustworthy and accountable ad experience, indicated Borgia.

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Image credits: Shutterstock, CC images, Midjourney, Unsplash.

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Metaverse Gaming Market Expected to Reach $119.2 Billion by 2028

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Metaverse Gaming Market Expected to Reach $119.2 Billion by 2028

The metaverse gaming market is estimated to encompass $22.7 billion in 2023 and projected to reach $119.2 billion by 2028, according to a recent report from ReportLinker.

The metaverse has been a hot cake in the tech industry in recent years and was boosted by Mark Zuckerberg’s decision to change Facebook’s name to Meta. However, the market has been limping towards AI, which stole the spotlight from virtual reality.

“The global metaverse in gaming market size is estimated at USD 22.7 billion in 2023 and is projected to reach USD 119.2 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 39.3%,” stated the report.

The growth of the metaverse in the gaming market is expected to be fuelled by several significant factors, including the dynamic and evolving landscape of adjacent technology markets “such as extended reality (XR),” which encompasses “virtual reality (VR),” augmented reality (AR), and mixed reality (MR).

Expectation of rapid growth

In 2021, the gaming industry experienced rapid growth, with billions of people playing video games globally and generating over $193 billion in revenue.

Gaming companies quickly became early adopters in exploring the potential of the metaverse. Looking ahead to 2023, it was projected that the metaverse will continue to reshape the gaming landscape.

A survey from last year shows that about 52% of U.S. gamers believe the metaverse will change the game industry.

“According to the survey, just over half (52%) of gamers believe the metaverse will change the video game industry and a plurality (41%) think that the metaverse will have a positive impact on the industry (vs. 25% who disagree),” reads the survey report of Globant and polling firm YouGov.

Moreover, 40% say the buzz around “metaverse gaming is warranted,” though nearly “one-third (30%) were undecided” on that subject.

Who are the big players?

The metaverse is not just a single platform, virtual experience, or game; it is an entire world recreated to provide an immersive experience. Gaming is one of the many experiences in the metaverse that is powered by AI, VR, and AR.

Whenever it comes to gaming, some of the giant games like Fornite, Unreal, and Roblox come to mind.

Read Also: Meta Seeks to Boost Its Metaverse Gaming Credentials

And those are expected to be significant players in the metaverse due to their existing influence and capabilities in the gaming industry, as a report from 2022 states.

“As gaming platforms like Fortnight gain functionality and evolve into technologically advanced social meeting places, it becomes more likely that a functioning Metaverse, with an independent economy, systems, and processes is in our future,” reads the report.

Fortnite has transformed into a social meeting place, offering interactive events and branded experiences.

Unreal’s powerful engine enables immersive media experiences, while Roblox’s user-generated content and virtual currency have attracted millions of users. These factors position them to thrive in the evolving metaverse landscape.

Europe expecting significant growth

Europe is expected to witness significant growth in the gaming metaverse market, with the second-highest CAGR during the calculation period.

The UK, Germany, and France lead the way in technology investment, while Russia and Spain are also adopting new display technologies.

“The substantial growth of the virtual world immersive interactive gaming industry in Europe is a crucial driver for the gaming metaverse market in this region,” stated the report.

The immersive interactive gaming industry in Europe, along with the demand for AR, VR, and MR technologies in the entertainment sector, serves as a driving force, indicated ReportLinker.

Initiatives such as the European Association for Virtual Reality and Augmented Reality (EuroVR) and projects like Augmented Heritage and International Augmented Med (I AM) contribute to market growth.

With increasing startups in extended reality, particularly in Sweden, Europe is poised for increased growth in the gaming metaverse markets.

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Chinese City Pledges $1.42bn to Boost Metaverse Industry Growth

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Chinese City Pledges $1.42bn to Boost Metaverse Industry Growth

Chinese city Zhengzhou has announced a plan to boost the metaverse industry by providing a significant 10 billion yuan ($1.42 billion) fund for local companies’ growth and development.

Although the People’s Bank of China banned digital assets in September 2021, the Asian power centre seems liberal towards the metaverse.

Under the new government’s draft, metaverse companies relocating their headquarters to Zhengzhou will have the opportunity to grab a start-up capital investment of up to 200 million yuan ($28.34 million).

In addition, the municipal government will provide a promising opportunity for companies operating in the metaverse sector within the city.

For each project that receives certification as viable by the government, companies will have the chance to secure a substantial grant of 5 million yuan ($710,000), regardless of their headquarters location.

Moreover, the government is offering other benefits such as rent subsidies for the metaverse company within Zhengzhou.

Open for public to review

The draft is now available on the municipal government’s website for feedback and review by the public.

“The public is now open to solicit opinions, and all sectors of society are welcome to put forward their opinions and suggestions,” reads the translation.

Hence, the purposed plan is only a draft to date, and the government has not mentioned the specific date of the fund allocation.

The metaverse-related sectors in Zhengzhou are expected to generate annual revenues exceeding 200 billion yuan ($28.34 billion) by the end of 2025, according to the municipal government.

Amid speculation about China lifting an absolute ban on crypto, the public is taking this draft as positive news for the industry.

“More positive news for crypto from China, that’s great,” wrote a Redditor in reaction to the news.

“One positive thing after the other,” another agreed, hopeful of China’s liberal step towards the crypto industry.

Will China overtake the West?

Western industry leaders like Meta wanted to be the leaders in the metaverse, but are now pivoting towards AI. Whereas China appears to be positioning itself as a potential metaverse hub.

As part of its commitment to spearheading China’s digital advancement, Nanjing, the capital of Jiangsu province, has also launched the China Metaverse Technology and Application Innovation Platform.

“The Metaverse is a vague concept and every [company] is interpreting it in its own way. In China, it’s very much a government-led concept,” said Brady Wang, an associate director at tech market research firm Counterpoint.

The Chinese government is clearly keen on the technology.

“The key difference [in the metaverse] between China and the rest of the world is it’d be heavily regulated in a centralized manner,” said Zhengyuan Bo, a partner at China-focused research firm Plenum.

Bo emphasised that the monetization of digital assets within the metaverse is constrained due to limited space for growth.

“I think in a decade or two, China will play a bigger role in everything than the US,” speculated one Redditor.

“America hates China because China doesn’t do what America wants it to. They hate it because it exists. I’m happy China is dedollarizing,” another Redditor expressed.

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Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover

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Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover

Microsoft has blamed Britain’s Competition and Market Authority (CMA) for “irrationally” blocking its $68.7 billion takeover of Call of Duty video game maker Activision.

The tech giant announced its plan to acquire Activision to “bring the joy and community of gaming to everyone, across every device,” back in January 2022. The proposed takeover aimed to bring Activision’s popular franchises, like Call of Duty, under Microsoft’s umbrella.

“Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash,” stated the company.

Read Also: Google Opens Up Access to its Search Labs with Generative AI

However, its bid faced regulatory obstruction amid concerns over industry consolidation. The deal’s block provoked Microsoft to appeal, heightening anticipation for the outcome and its potential implications on the gaming landscape.

The regulatory body blocked Microsoft’s takeover of Activision in April, saying it would encourage market monopolies and stifle competition in the growing video game streaming market.

EU offers favorable conditions for businesses

The company has accused the regulator of making “fundamental errors” while blocking its deal.

Microsoft has claimed the CMA had not taken “proper account of three long-term commercial agreements which Microsoft had entered into with the other party” in the filing with the Competition Appeal Tribunal.

After the ruling, Microsoft president Brad Smith slated the regulator, suggesting the decision conveyed a “clear message” that the European Union (EU) offered more favorable conditions for starting a business in comparison to Britain.

Additionally, Activision, which is also the creator of the popular mobile game Candy Crush, accused the UK of having an unwelcoming business environment, stating that it was “closed for business.”

Hence, while the CMA has halted the acquisition, the EU has given the green light for the merger.

Need for broader understanding

Chancellor Jeremy Hunt expressed his belief that regulators should understand their “wider responsibilities for economic growth” following the blockage of the deal.

“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth” stated Hunt.

One of the reasons companies like Microsoft and Google are interested in investing in the UK is due to the presence of independent regulators that are not influenced by politicians, argued Hunt.

‘Takeover won’t be unfair’

The fact that the deal was blocked by the UK but welcomed by the EU has made headlines. Evidently in giving the green light, EU officials believe Activision’s takeover by Microsoft won’t be unfair.

In the meantime, it is still awaiting a confrontation with the US Federal Trade Commission which has filed a lawsuit to block the deal. The trial is scheduled to start in early August, with a decision expected by the end of the year.

“Where we diverged with the CMA was on remedies,” stated Margrethe Vestager, the EU’s competition chief.

She stated that a 10-year free license was granted to consumers, enabling them to stream all Activision games they hold licenses for via any cloud service.

“And why did we do this instead of blocking the merger?” she questioned.

“Well, to us, this solution fully addressed our concerns. And on top of that, it had significant pro-competitive effects.”

However, the Chief Executive of the CMA Sarah Cardell reiterated her support for the decision, emphasizing the regulator’s objective to establish favorable conditions for competition that would foster the growth of both large and small companies.

“I don’t find that we are operating sort of, broadly speaking, in a hostile environment,” stated Sarah.

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