Google, the search engine behemoth, has just been served a 2.1-billion-euro ($2.3 billion) lawsuit which has been jointly launched by 32 media houses, including Axel Springer and Schibsted, on Wednesday. The lawsuit alleges that the group had to endure crippling losses due to Google’s practices in digital advertising. The news of the lawsuit also affected Google’s shares, which tanked by more than 2%.
Media Giants, Including Axel Springer, Demand $2.3 Billion from Google in Lawsuit
The group that has slapped the lawsuit against the search engine giant includes publishers from many European countries like Denmark, Finland, Belgium, Bulgaria, Spain, and Sweden. This comes in the backdrop of a crackdown on Google’s ad tech business by antitrust regulators.
A statement issued by their lawyers, Geradin Partners and Stek, said, “The media companies involved have incurred losses due to a less competitive market, which is a direct result of Google’s misconduct. Without Google’s abuse of its dominant position, the media companies would have received significantly higher revenues from advertising and paid lower fees for ad tech services. Crucially, these funds could have been reinvested into strengthening the European media landscape.”
Google has been in trouble in many EU countries, with the French competition authority slapping a fine of 220-million-euro in 2021. It was also the subject of an investigation by the European Commission last year. The lawsuit clearly mentions the above incidents to buttress their charges against Google.
Lawyers Geradin Partners and Stek stated that Google could face regulatory scrutiny and will have to put an end to its present practices and enable a more consistent and predictable policy of pricing to its advertising customers.
The climate for the search engine giant is going through a turbulent phase, with its core advertising business facing an existential threat from the shift to generative AI.
Meanwhile, a spokesman for Google said that the company denies all the charges and labeled them as “speculative and opportunistic.” It added that it has always engaged constructively with all the publishers in Europe and its advertising policy has evolved in partnership with the publishers.
It also said that it does not agree with the EU antitrust charges against its ad tech business since it is involved in both the buy-side as well as the sell-side of the supply chain.
Google’s increasing clout in the field of advertising has been opposed by publishers around the world, which have seen their revenues plummeting. Google is the most dominant digital advertising platform in the world, and it is restricting the space for other competitors.
Publishers around the world have in recent years lamented Big Tech’s increasing dominance in advertising as their share of revenues fell.
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