Last updated on April 4th, 2024 at 11:26 am

Publishers, including Axel Springer, allege Google abused its dominant position in digital ad-tech in a lawsuit

Alphabet’s Google faces a €2.1bn ($2.3bn) lawsuit from 32 media groups, including Axel Springer and Schibsted, alleging losses stemming from the company’s digital advertising practices.

The action by the groups, comprising publishers from several European countries, coincides with antitrust regulators’ scrutiny of Google’s ad-tech operations.

According to a statement from their legal representatives, Geradin Partners and Stek, the media companies have suffered financial losses due to a less competitive market caused by Google’s actions. These companies could have generated significantly higher advertising revenues and paid lower fees for ad tech services without Google’s abuse of its dominant position. The lawyers emphasized that these additional funds could have been used to bolster the European media industry.

They referenced the €220 million fine imposed on Google by the French competition authority in 2021 and the European Commission’s charges from the previous year to support their collective claim.

DA Davidson & Co analyst Gil Luria suggested that if regulatory scrutiny continues, Google might need to change its practices and offer more consistent, predictable pricing to its advertising clients. This lawsuit coincides with a critical period for Google’s core advertising business, which is challenged by the transition to generative AI chat, according to Luria.

In response, a Google spokesperson stated that the company opposes the lawsuit, describing it as “speculative and opportunistic.” The spokesperson emphasized Google’s constructive collaboration with publishers throughout Europe, highlighting the company’s commitment to adapting and evolving its advertising tools in partnership with publishers.

Last year, Google expressed its disagreement with EU antitrust charges related to its ad tech business, where it operates on both the buy-side and sell-side of the supply chain.

Publishers worldwide have increasingly voiced concerns about the growing dominance of Big Tech in advertising, which has led to a decline in their share of revenues. Analysts consider Google to be the most dominant digital advertising platform globally.

The group filed the lawsuit in a Dutch court due to the country’s reputation as a key jurisdiction for antitrust damages claims in Europe, aiming to avoid multiple claims in various European countries.

Other members of the group include Austria’s Krone, Belgian groups DPG Media and Mediahuis, Denmark’s TV2 Danmark A/S, Finland’s Sanoma, Poland’s Agora, Spain’s Prensa Iberica, and Switzerland’s Ringier.