Google Abuses Advertising, Claims $2.3 Billion Lawsuit by Media Groups

Google faces $2.3 Billion lawsuit from Axel Springer, Schibsted, along with more than 30 European media groups after they reportedly claim the tech giant has abused its position in the advertising market, directly harming the companies' revenues.

A group of more than 30 European media businesses from 17 countries, including media behemoth Axel Springer, claims they suffered losses due to reduced competition in the advertising technology sector. According to the lawsuit, if Google had not had such a dominating position, media firms would have had more revenue and reduced advertising rates.

The action by the group, which includes publishers from Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, Hungary, Luxembourg, the Netherlands, Norway, Poland, Spain, and Sweden, comes as antitrust regulators push down on Google's ad technology business.

(Photo : Michael M. Santiago/Getty Images)
NEW YORK, NEW YORK - JANUARY 25: The Manhattan Google headquarters is seen on January 25, 2021 in New York City.

The lawsuit reportedly refers to a 2021 deal between Google and French antitrust regulators under which the firm agreed to pay over $270 million in fines and make changes to its advertising system and practices. Regulators said at the time that Google had abused its position to hurt publishers and other ad suppliers.

The alliance says that the news media were badly impacted at a time when their business model was already undermined by a drop in print subscription sales and accompanying advertising revenue.

The organization stated that they filed the complaint in a Dutch court due to the country's reputation as a crucial venue for antitrust damages claims in Europe, as well as to avoid having several claims in different European nations.

The group also includes 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.

Google's Response

Google Legal Director Oliver Bethell reacted to the charges, noting that the business collaborates with publishers throughout Europe and that its tools, as well as rivals' tools, assist websites in funding content and reaching new customers.

Last year, Google reportedly stated that it disagreed with EU antitrust claims against its ad tech company, which operates on both the buy and sell sides of the supply chain.

Publishers throughout the world have recently decried Big Tech's growing dominance in advertising, as their proportion of revenue has declined. Analysts say Google is the world's most dominating digital advertising platform.

Claims on Google's Anticompetitive Advertising

This lawsuit is not a new one against Google as last December, the Alphabet-owned company saw a similar class action lawsuit filed in the U.S. District Court in D.C. The complaint also accused Google and its parent company, Alphabet, of engaging in anticompetitive activities.

However, the lawsuit particularly cited the negative impact of Google's latest AI technologies, such as the Search Generative Experience (SGE) and Bard AI chatbot, as the primary cause.

The complaint claimed that Google's activities harm the free press by distributing publishers' material on its platform, causing billions of dollars in losses for news publishers.

Aside from the most recent AI technology, the complaint blamed Google's previous question-and-answer tools, like the "Knowledge Graph" introduced in May 2012, for contributing to the problem.