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.
“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.
Google shouldn’t be allowed to be the buyer, seller, broker, and platform host for the sale of online advertising. These conflicts of interest allow one company to collect monopoly rents that tax the economy online and offline. I’ve got a bill to fix that. pic.twitter.com/it7e80WLSg
— Mike Lee (@BasedMikeLee) March 25, 2023
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.