Google faces £20bn claim for depriving newspapers of ad revenue

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Google is being sued for up to €25bn (£21.6bn) over claims it has deprived newspapers and internet bloggers of billions of pounds in advertising revenues.

The Big Tech giant is facing class action complaints in the UK and the Netherlands that it used its advertising technology to unfairly sideline publishers while hoovering up ad revenues. 

The claim is being brought on behalf of all websites and publishers that carry online banner advertising, including newspapers, magazines, blogs and other digital media sites.

Toby Starr, a partner at the law firm Humphries Kerstetter, said alleged UK victims may have potentially lost up to £7bn in revenues since 2014.

“This includes news websites up and down the country with large daily readerships as well as the thousands of small business owners who depend on advertising revenue,” he said, “be it from their fishing website, food blog, football fanzine or other online content they have spent time creating.”

Newspapers advertising revenues have been hit particularly hard by the rise of Google as brand advertising and classified ad sales collapsed over the last two decades.

Google and Facebook have emerged as dominant forces in the digital advertising market, controlling more than 70pc of online ads.

Law firms Geradin Partners and Humphries Kerstetter are planning to bring the claims to a court in the Netherlands and the Competition Appeal Tribunal in the UK.

The firms, which will apply for class action status for the claims, said publishers could be owed billions of euros. The case will see a representative for the “class” bring the case on behalf of thousands of online publishers.

The claim centres around allegations that Google’s ad exchange – its online ad auction technology – was used to distort competition and to benefit its own advertising publishing service. This meant Google unfairly secured a greater proportion of internet ad revenues, according to the claimants. 

Google was contacted for comment.

The Californian tech giant was fined €220m by French competition authorities in 2020 over its advertising conduct. In a separate UK case, the Competition and Markets Authority has announced an investigation into whether Google’s advertising business broke competition law.

The new claim brought by Geradin Partners and Humphries Kerstetter is being backed by litigation funders Harbour. 

Litigation funders have been pumping millions of pounds into UK legal claims against Big Tech firms in a series of class action cases.

Vannin Capital, a Jersey-based company, stumped up an £11m war chest for a £920m competition claim against Google over excessive fees on its smartphones, according to filing in the ongoing case.

Claimants allege the 30pc fees Google charges on payments made through its app store are unlawful. Google denies the claims. Vannin is funding the claim through an £11.3m loan agreement with its parent company, SoftBank-owned private equity firm Fortress.

Litigation funders are paid a share of the proceeds if the case is successful. The rise of investors willing to back high stakes legal claims has led to a flurry of new class action lawsuits in the UK.

According to data from law firm RPC, British litigation funding firms have doubled their assets over the past three years and are now sitting on £2.2bn in cash to back claims.

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