Twin class actions aim to capitalise on a finding by the French competition authority against Google to win advertising compensation for publishers that operate within the European Union or the United Kingdom.
This post explains the goals and background to the cases, the French finding the new cases are relying on, the mechanics of who the class action is expected to work in the E.U. compared with the U.K., with a look at possible outcomes and the statements of the key parties at the launch of the class actions.
The claims are seeking €17 billion in the EU and £7 billion in the UK for compensation for lost advertising income. They are being organised by the same competition law firm, Brussels-based Geradin Partners, which brought the earlier case against Google in France on behalf of a small group of media companies, including News Corp.
France’s antitrust regulator, the Autorité de la concurrence, fined Google €220 million last year after finding it had abused dominance in its ownership of advertising technology. Google did not contest the finding, which is key to the new claims. The offence included, in part, “self-preferencing” or “vertical leveraging,” where Google directs deals and priority to other Google products within the advertising chain — for example, from its ad tools to ad server to ad exchange to Web sites it controls to show the ad and/or vice versa.
EU class action
Any digital publisher that accepts advertising is eligible to sign up for the class action but must explicitly opt in. It covers not just news media but also sports, entertainment, food, leisure, and specialist publishers that can join at no charge. The infringement already established by a national regulator within the EU is the case’s focus. The claim is being filed in the Netherlands, not France, because this type of case is common there, and the country allows damages to be calculated for every EU country that the infringement may have occurred in, not just in the country hosting the case. Many media companies have already signed up, according to Damien Geradin, who has initiated the claims.
UK class action
The action in the UK will work differently. Firstly, all publishers with an operation domiciled in the country are automatically included in the claim unless they opt out. This includes international publishers. Secondly, while last year’s French finding confirmed an earlier recommendation made by Britain’s Competition & Markets Authority (CMA) in its market study, any infringement may still need to be formally established given the UK is a separate jurisdiction. Therefore, if it goes to trial, it may run longer. A formal CMA inquiry into ad tech is now under way in the UK, and its findings may impact this publisher class action.
The twin class actions in Europe are funded by a London-based litigation fund, Harbour, the world’s largest privately owned fund of its type, which would be paid out of any damages that are awarded. The action is represented in the Netherlands by law firm Stek and in the UK by Humphries Kerstetter. It has been initiated by Geradin Partners, and the damages have been assessed by a team of economists (Charles River Associates). The claims use 2014 as their starting point, which is when the French regulator determined the damage to have commenced.
Google is unlikely to sit on its hands with this one. The company could elect to go to trial to prove it didn’t violate the law, or it could decide to settle given last year’s French regulatory finding. If Google chose a settlement path, it would allow it to stay in control of the terms that they would have to offer – not just financial damages but also the commitments Google would need to offer regulators to solve the underlying discord and bring the regulatory inquiries to an end. In normal circumstances, a company in Google’s position would attempt to delay proceedings, yet that may not work in this case given several other court decisions and regulatory reviews are imminent. These could compound the tech giant’s problem. For the publishers in the class actions, the longer the EU and UK cases drag out, the higher the potential chance of a bigger payday.
Google responded in a written statement issued to reporters after the class actions were announced: “Google works constructively with publishers across Europe — our advertising tools, and those of our many ad tech competitors, help millions of Web sites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. These services adapt and evolve in partnership with those same publishers. This lawsuit is speculative and opportunistic. When we receive the complaint, we’ll fight it vigorously.”
Damien Geradin told INMA: “I’ve been defending … publishers for a very long period of time. It’s actually the result of many years of work, of investigation, of visiting competition authorities, of triggering these investigations. I’ve been lucky to have extremely patient clients and to work also with the European Publishers Council which has been also very supportive. So, it’s not opportunistic. It’s the logical outcome of everything we’ve tried to achieve for many years now.”
One more thing
Google knows publishers are just one part of the ad tech ecosystem. Advertisers, media agencies, and other tech providers would be lining up more claims straight after any publisher victory.
Four ad tech-related cases news publishers should watch
The European Commission opened a formal antitrust investigation to assess whether Google has violated EU competition rules by favouring its own online display advertising technology services, “distorting competition by restricting access by third parties to user data for advertising purposes on websites and apps, while reserving such data for its own use.”
The United Kingdom’s Competition and Markets Authority launched an investigation into whether Google has “abused a dominant position through its conduct in ad technology.” It had earlier concluded its markets study which found that the company preferenced its own businesses across the demand side and supply side components of ad tech.
The 16 U.S. states and Puerto Rico versus Google case has moved jurisdiction to New York, where a federal court judge has dismissed Google’s application to throw out the case. The states allege Google monopolises the digital advertising markets or attempts to do so. Another element of the case, linking Meta/Facebook to Google’s preferencing (in a venture called Project Jedi Blue), was recently dismissed.
A new U.S. Department of Justice case is reportedly imminent, with the DoJ expected to sue Google over its dominance in the ad tech market.
Click here to read INMA’s explainer on ad tech.