By Foo Yun Chee
BRUSSELS (Portal) – Alphabet's Google was hit with a 2.1 billion euro ($2.3 billion) lawsuit on Wednesday by 32 media groups including Axel Springer and Schibsted, alleging that they losses were incurred as a result of the company's digital advertising practices.
Shares of the Mountain View, California-based company fell more than 2%.
The move by the group – which includes publishers in Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, Hungary, Luxembourg, the Netherlands, Norway, Poland, Spain and Sweden – comes as antitrust regulators also crack down on its advertising technology Google go ahead business.
“The media companies involved have suffered losses due to a less competitive market, which is a direct result of Google’s misconduct,” said a statement from their lawyers Geradin Partners and Stek.
“Without Google's abuse of its market dominance, media companies would have generated significantly higher advertising revenue and paid lower fees for ad tech services. What would be crucial is that these funds could be reinvested in strengthening the European media landscape,” said the lawyers.
They cited the French competition authority's €220 million fine against Google over its ad tech business in 2021, as well as the European Commission's allegations last year, to support their class action.
“If the regulatory review is followed, Google may have to limit its practices and offer more consistent, predictable pricing to its advertisers,” said Gil Luria, an analyst at DA Davidson & Co.
The lawsuit comes at a time when Google's core advertising business faces an existential threat from the shift to generative AI chats, Luria added.
In a statement, a Google spokesman said the company rejected the lawsuit, adding that it was “speculative and opportunistic.”
“Google works constructively with publishers across Europe. … (Our advertising tools) adapt and evolve in collaboration with the same publishers.”
The story goes on
Google said last year that it disagreed with the EU's antitrust allegations against its ad tech business because it was involved on both the buying and selling sides of the supply chain.
Publishers around the world have lamented Big Tech's increasing dominance of advertising in recent years as its share of revenue declines. According to analysts, Google is the dominant digital advertising platform in the world.
The group said it filed the lawsuit in a Dutch court because the country is known as one of the main jurisdictions for antitrust damages claims in Europe and to avoid multiple lawsuits in different European countries.
Other members of the group include Krone from Austria, DPG Media and Mediahuis from Belgium, TV2 Danmark A/S from Denmark, Sanoma from Finland, Agora from Poland, Prensa Iberica from Spain and Ringier from Switzerland.
($1 = 0.9247 euros)
(Reporting by Foo Yun Chee, additional reporting by Charlotte Van Campenhout and Jaspreet Singh in Bengaluru; Editing by Jason Neely and Jonathan Oatis)