The lawsuit alleges that the search engine hindered competition, leading to an increased cost of living for consumers
Google is now confronting a significant multibillion-pound lawsuit from UK consumers, asserting that the company has played a role in the surge of living expenses. The legal action, representing all consumers in the UK, contends that Google’s actions stifled competition in the search engine sector, leading to widespread price hikes in the UK economy. Filed with the Competition Appeal Tribunal, the lawsuit alleges that Google violated competition laws and contributed to an increased cost of living for every consumer in the UK. The claims suggest that Google monopolized mobile searches, leveraging its market dominance to escalate advertising prices on its search page, subsequently affecting consumers.
Funded by Hereford Litigation, a global commercial litigation funder, the class action involves Nikki Stopford, co-founder of Consumer Voice and the class representative. Stopford emphasized the action’s dual purpose: seeking restitution for individuals and holding Google accountable for its conduct. The claim seeks an estimated compensation of £7.3 billion, intended for approximately 65 million UK users aged 16 and above, translating to an average of at least £100 per person. This legal action follows similar lawsuits filed by the US justice department and eight states earlier this year, accusing Google of exploiting its digital advertising dominance.
The UK’s Competition and Markets Authority (CMA) is conducting an inquiry into whether Google has abused its dominant position in ad tech. The investigation focuses on Google’s payment of around £1.2 billion to Apple in 2019 for default status on Safari in the UK. The legal action alleges that Google manipulated its search pages with paid advertising, compelling companies to increase payments for “clicks” rather than relying on organic user discovery. The lawsuit contends that a more competitive search engine would prioritize ad relevance to users over the advertiser’s payment.
The legal action asserts that the contractual arrangements between Google and Apple, securing Google as the default search engine for the Safari browser on iOS, Apple’s iPhone operating system, played a role in sustaining Google’s dominant mobile position. In 2022, Google Ads yielded over $224 billion in revenue, comprising nearly 80% of Alphabet’s overall revenue of $283 billion.
Stopford stated, “Google has manipulated circumstances, at times in violation of the law, to establish itself as the default search engine on almost every mobile device in the UK. It exploited its market dominance to impose higher charges on advertisers than would have prevailed in a competitive market – such as for the sponsored links visible in Google search results. Advertisers have inevitably transferred these increased expenses to consumers.
Luke Streatfeild, a partner at the legal firm Hausfeld leading the litigation, commented, “Google provides a valuable service, but it comes at a cost. This claim asserts that Google has stifled competition in search engines for years, to the detriment of businesses using its services and, ultimately, consumers. The lack of competition results in higher prices and lower quality, affecting the entire UK economy.”
A spokesperson for Google responded, stating, “This case is speculative and opportunistic – we will contest it vigorously. People use Google because it is helpful. We only make money if ads are useful and relevant, as indicated by clicks – at a price that is set by a real-time auction.