Alphabet Inc.’s (GOOGL.O) Google is facing a lawsuit amounting to 2.1 billion euros ($2.3 billion) filed by a coalition of 32 media organizations, including notable names such as Axel Springer and Schibsted (SCHA.OL). This legal action, taken on Wednesday, accuses Google of negatively impacting the media groups’ earnings through its digital advertising practices. As a result of the lawsuit announcement, shares of the tech giant, based in Mountain View, California, dropped over 2%.
The coalition comprises publishers from a diverse array of European countries, including Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, Hungary, Luxembourg, the Netherlands, Norway, Poland, Spain, and Sweden. Their move aligns with ongoing antitrust actions targeting Google’s advertising technology operations.
According to a statement from their legal representatives, Geradin Partners and Stek, the involved media companies claim they’ve suffered financial losses due to market conditions made less competitive by Google’s alleged unfair practices. They argue that without Google’s dominance abuse, they would have earned more from advertisements and paid less for ad tech services, funds that could have supported the European media sector’s growth.
The lawsuit references a 220-million-euro penalty imposed on Google by the French competition authority in 2021 over its ad tech business, alongside charges by the European Commission last year, to support their collective claim.
D.A. Davidson & Co analyst Gil Luria remarked that the lawsuit’s timing is crucial, especially as Google’s main advertising revenue is challenged by the rise of generative AI chat technologies. Luria suggests that Google might have to adjust its operations and offer more stable, predictable advertising pricing in response to regulatory scrutiny.
Google has contested the lawsuit, with a spokesperson labelling it as “speculative and opportunistic” and stating the company’s commitment to constructive partnerships with European publishers, insisting that their advertising tools have been developed in collaboration with the industry.
The tech giant had previously expressed disagreement with the European Union’s antitrust charges regarding its ad tech business, highlighting its dual role in the advertising supply chain’s buy-side and sell-side.
This lawsuit reflects a broader concern among publishers globally about Big Tech’s encroachment on advertising revenue shares, with Google being the predominant force in the digital advertising market.
The media groups chose to file the lawsuit in a Dutch court, citing the Netherlands’ status as a prime location for antitrust damage claims within Europe and aiming to prevent fragmented legal actions across multiple countries. Other participants in the lawsuit include Austria’s Krone, Belgium’s DPG Media and Mediahuis, Denmark’s TV2 Danmark A/S, Finland’s Sanoma, Poland’s Agora, Spain’s Prensa Iberica, and Switzerland’s Ringier.
