Google accused of anti-competitive practices that have led to 65 million UK consumers paying more for goods and services
A class action lawsuit will today be launched against Google for anti-competitive practices and abuse of market dominance that could result in almost everyone in the UK receiving an estimated share of £7.3 billion in compensation.
The claim accuses Google of shutting out search engine competition on smartphones by fixing things to make itself the default on practically all mobile phones in the UK. This led to higher prices for advertisers who, to a large extent, have passed costs onto consumers, forcing them to pay more for goods and services than they would in a competitive market.
Consumer Voice co-founder and consumer rights campaigner, Nikki Stopford, who is leading the claim, said:
‘Almost everybody uses Google as their go-to search engine, often trusting the company to help them find the best products and services at reasonable prices. Unfortunately, Google’s dominance of the search market has actually raised those prices for consumers. Despite judgments at the highest levels in Europe and complaints in the US, Google continues to rig the search market so that it can charge advertisers more.’
What is Google accused of?
The lawsuit argues that Google has effectively ‘bought’ the UK mobile phone search engine market. Google forced mobile phone handset manufacturers to pre-install the Google Search and Google Chrome browser apps on devices that use Google’s Android operating system in order to obtain a licence to use Google Play.
Google also unlawfully paid billions to Apple to ensure that it was the default search engine on iPhones and other devices that used Apple’s iOS operating system. In 2019, Google paid £1.2 billion to Apple in the UK to be the default search engine on the Safari browser.
It is claimed that Google has used its market dominance to effectively charge advertisers over the odds. Costs were then passed on to such an extent that all consumers ended up paying higher prices for goods and services sold by brands that have advertised on the platform.
Stopford, who is seeking to lead this claim on behalf of 65 million UK consumers, said:
‘It’s a clear breach of competition law, for which consumers are paying the price. Google has been warned about its behaviour by competition regulators repeatedly but has taken no meaningful action to stop the abuse. This action aims to make the company accountable for its repeated lawbreaking and get consumers back the money they’re owed.’
Legal team behind the claim
Stopford has instructed the law firm Hausfeld & Co. LLP to represent her in this mobile search claim.
Luke Streatfeild, a partner at Hausfeld, who is leading the litigation, said:
‘Google provides a great service, but it isn’t free. This claim says that Google has choked off competition in search engines for years, to the detriment of the businesses that use its services – and, ultimately, consumers. The lack of competition leads to higher prices and poorer quality, and the effects of this are felt throughout the UK economy.’
The claim will today be filed at the specialist competition court, the Competition Appeal Tribunal.
Who is eligible for compensation?
The claim seeks to get overcharges back for everyone affected. This includes all UK consumers who bought goods or services from a business who advertised using search advertising services provided by Google. This is effectively everyone in the UK.
Consumers do not have to have seen these goods and services advertised on Google, or used Google to have purchased the goods or services. This is because the claim says that these inflated prices were paid by everyone if the business advertised on Google.
Consumers affected by the Google claim could be owed around £100 if the claim is won. They will not pay costs or fees to participate. The claim is being funded by global litigation funder Hereford Litigation.
Google says it will dispute the claim ‘vigorously’
A Google spokesperson is reported as saying:
‘This case is speculative and opportunistic – we will argue against 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. Advertising plays a crucial role in helping people discover new businesses, new causes and new products.
Concerns about the impact of Google’s search engine dominance
Google received a record 4.1 billion euros (£3.6bn) fine for this anti-competitive conduct from a top EU court in September 2022. The European Court of Justice upheld the European Commission’s 2018 decision that Google had imposed unlawful restrictions on manufacturers of Android mobile devices forcing them to pre-install the Google Search app and Chrome browser in order to obtain a licence to use its Google Play store.
Regulatory authorities in the UK, EU and US have said that Google’s conduct in search is anti-competitive. A complaint by the Department of Justice and several Attorneys General in the US in January 2021, as well as findings from the UK’s Competition and Markets Authority, support the claim that Google’s commercial agreement with Apple forced out competition for search on iOS devices.
Consumer Group Which? has also long held concerns about the impact of Google’s search engine dominance on the prices paid by advertisers. Rocio Concha, Which? Director of Policy and Advocacy, said:
‘If Google were to be found guilty of wrongdoing, this opt-out action would rightly return money back into the pockets of UK consumers.
Which? has campaigned hard for an effective collective redress scheme for consumers, but with no claim under the regime reaching a conclusion yet, consumers are still waiting to see the benefit.
The regime has the ability to play a vital role in making markets work better for consumers by deterring big companies from indulging in abusive behaviour, so it’s incredibly important that these types of claims can continue to be brought.’
Google is accused of anti-competitive behaviour by shutting out search engine competition in £7 billion lawsuit affecting 65 million UK consumers.
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