Google Faces $2.3 Billion Lawsuit From Media Groups

Google has found itself in a legal tussle as 32 media conglomerates, including Axel Springer and Schibsted, collectively filed a hefty 2.1-billion-euro ($2.3 billion) lawsuit against the company. The claim alleges that Google’s digital advertising practices have caused significant financial losses to these media organizations. This move led to a more than 2% drop in stock for Alphabet, Google’s parent company, headquartered in Mountain View, California.

The coalition of media entities spans various European countries, including Austria, Belgium, Bulgaria, and many others. They accuse Google of monopolizing the digital advertising market, leading to reduced competitiveness and revenues for them. The legal action follows a pattern of increased regulatory scrutiny on Google’s ad tech operations by antitrust authorities.

According to statements from legal representatives Geradin Partners and Stek, Google’s dominant position has deprived media companies of higher advertising revenues and forced them to pay inflated fees for ad tech services. They referenced previous fines and charges imposed on Google by European regulatory bodies to bolster their case.

Financial analyst Gil Luria from D.A. Davidson & Co. commented on the potential implications of regulatory actions, suggesting that Google might have to adjust its practices and offer more consistent pricing to advertisers.

This legal clash coincides with challenges to Google’s core advertising business due to emerging technologies like generative AI chat. Google refuted the allegations, labeling the lawsuit as “speculative and opportunistic,” emphasizing its collaborative efforts with European publishers.

In response to EU antitrust charges, Google disagreed with the accusations regarding its ad tech operations, where it plays a significant role in both buying and selling advertising space. The dominance of Big Tech in the advertising realm has raised concerns among publishers globally, with Google being identified as the leading digital advertising platform.

The media coalition chose to file the lawsuit in a Dutch court, leveraging the country’s reputation for handling antitrust damages claims effectively and avoiding fragmented legal proceedings across multiple European jurisdictions. Notable members of the group include Krone from Austria, DPG Media from Belgium, and Prensa Iberica from Spain, among others.