Google faces £5bn lawsuit for abusing search engine market

Google has been sued for £5bn in damages in the UK over allegations it abused its dominance in the search engine market to exclude competition and overcharge advertising firms.

The class action, filed at the Competition Appeal Tribunal on Tuesday, argues the US technology company used “anti-competitive tactics” so it could overcharge advertisers “by billions of pounds”.

It claims Google contracted mobile phone manufacturers and network operators to ensure Google Search and Chrome were preinstalled in Android devices, and paid billions to Apple to make it the default search engine in Safari.

The lawsuit was filed by law expert Dr Or Brook on behalf of hundreds of thousands of UK-based firms that used Google’s advertising services from January 2011.

Brook said: "Today, UK businesses and organisations, big or small, have almost no choice but to use Google ads to advertise their products and services. Regulators around the world have described Google as a monopoly and securing a spot on Google’s top pages is essential for visibility.  Google has been leveraging its dominance in the general search and search advertising market to overcharge advertisers. 

“This class action is about holding Google accountable for its unlawful practices and seeking compensation on behalf of UK advertisers who have been overcharged.”

It comes after the Competition Market Authority (CMA) launched an investigation into Google over its dominance of online search dominance in January.

According to the competition watchdog, the tech company accounts for 90 per cent of all UK web searches with more than 200,000 UK businesses advertising in its platform.

It marked the first investigation by the CMA after gaining new powers to impose “conduct requirements” or “introduce pro-competition interventions” to ensure the digital market remains fair.

In the US, Google, which is owned by tech firm Alphabet, has already been told by the Department of Justice (DoJ) to sell its Chrome web browser in a bid to put an end to is monopoly in online search.

The DoJ proposals came after a landmark ruling in August in which a judge found Google had illegally shut down its competition in the search market.  

Founding partner of Geradin Partners, which represents Dr Brook, Damien Geradin, said:  "Google is one of the most powerful companies in the world. However, through a range of deliberate and exclusionary practices, it has sought to eliminate its rivals and dominate the search advertising market, ultimately overcharging UK advertisers by billions of pounds. 

“This is the first claim of its kind in the UK that seeks redress for the harm caused specifically to businesses who have been forced to pay inflated prices for advertising space on Google pages. 

“We are fully committed to holding Google accountable and securing fair compensation for affected organisations and businesses.” 

A Google spokesperson said: “This is yet another speculative and opportunistic case - and we will argue against it vigorously. Consumers and advertisers use Google because it helpful, not because there are no alternatives”