Google is facing a heavy 2.1-billion-euro ($2.3 billion) lawsuit filed by 32 media conglomerates, including Axel Springer and Schibsted.
According to Reuters, the lawsuit that was initiated on Wednesday, accused Google of engaging in practices harmful to digital advertising, causing significant losses to media companies.
This legal action adds to the mounting challenges Google is confronting, with antitrust regulators intensifying scrutiny over its ad tech operations.
The development prompted a dip of more than 2 per cent in Google’s stock shares.
The consortium of media groups, spanning various European countries, alleges that Google’s monopolistic behaviour has led to an uncompetitive market, resulting in financial setbacks for publishers.
Lawyers representing the media companies pressed that Google’s actions have curtailed potential revenues from advertising and inflated fees for ad tech services.
They brought out instances such as the French competition authority’s hefty fine against Google in 2021 and the European Commission’s recent charges as evidence supporting their collective claim.
According to analysts, if regulatory scrutiny persists, Google might be compelled to revise its practices and ensure more equitable pricing for advertisers.
Reuters cited an DA Davidson & Co analyst, Gil Luria who noted the unstable position of Google’s advertising business, especially with the emergence of generative AI chat continues to pose a huge challenge.
Luria highlighted that there would potential consequences of regulatory actions on Google’s operational strategies and pricing policies.
Meanwhile, Google refuted the allegations, denouncing the lawsuit as “speculative and opportunistic.”
A spokesperson reiterated Google’s collaborative efforts with publishers across Europe, asserting that their advertising tools evolve in unison with publishers’ needs.
Google had previously contested EU antitrust charges related to its ad tech business, where it operates on both the buy-side and sell-side of the supply chain.
The lawsuit was filed in a Dutch court, with aims to streamline legal proceedings and prevent fragmented litigations across various European nations.
Notable groups that have joined the legal action against Google include Austria’s Krone, Belgium’s DPG Media and Mediahuis, Denmark’s TV2 Danmark A/S, Finland’s Sanoma, Poland’s Agora, Spain’s Prensa Iberica, and Switzerland’s Ringier.
(With inputs from Reuters)
