Google must face £7B UK class action over search engine dominance
- Reference: 1732625682
- News link: https://www.theregister.co.uk/2024/11/26/google_7_billion_cat/
- Source link:
[1]The complaint centers around Google shutting out competition for mobile search, resulting in higher prices for advertisers, which were allegedly passed on to consumers. According to consumer rights campaigner Nikki Stopford, who is bringing the claim on behalf of UK consumers, Android device makers that wanted access to Google's Play Store had to accept its search service. The ad slinger also [2]paid Apple billions to have Google Search as the default for the Safari browser in iOS.
The UK's Competition Appeal Tribunal (CAT) [3]granted permission for the claim to proceed earlier this week, after Google, among other things, protested that the allegations of abuse in relation to the iOS were "so weak that they ought to be struck out."
[4]
Stopford is leading the [5]collective proceedings (basically a UK style class action case under the Consumer Rights Act 2015) against Google. She told The Register that the £7 billion ($8.8 billion) figure was a "conservative estimate" and could result in affected UK consumers receiving almost £100 ($125) each. The claim was brought on an opt-out basis.
[6]
[7]
Stopford emphasized that while having a dominant position in the market was not against the law, companies should not abuse that position. "Google," she claimed, "has abused its dominance in search, essentially, and it's done that through a number of commercial contracts that it has with Android [device] manufacturers and Apple to make it the default search engine.
"What that then means is advertisers who want to advertise their products and services are left with little option but to advertise on Google, because most of our searches start there."
[8]
According to Stopford, Google used its position to up prices paid by advertisers, resulting in higher costs to consumers. "What we're trying to achieve with this claim is essentially compensate consumers," she said.
If this all sounds a little familiar, it should. The US Department of Justice recently [9]filed a proposal that would regulate Google's activities in the search market and force it to divest itself of the Chrome browser. Google is due to file its response in the coming weeks.
[10]How US Dept of Justice's cure for Google could inflict collateral damage
[11]Why Google's Chrome monopoly won't crack anytime soon
[12]DoJ wants Google to sell off Chrome and ban it from paying to be search default
[13]Google decides Europe's political ad rules are too hard to implement at scale
Stopford acknowledged the legal and regulatory actions being taken against Google in the US and elsewhere, but said: "Whilst all of that regulator enforcement is great, and is challenging Google, and is trying to ensure that it behaves in a fair way, what it doesn't do is compensate people who have lost out … the people that have spent more because of Google's actions.
"And that's really the point of difference in terms of what we're trying to do with this claim."
Stopford told us the trial was unlikely to kick off before 2027 and noted there remained substantial work to gather evidence. Stopford also paid tribute to the Collective Action capability in UK consumer law.
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"It's a powerful tool in terms of addressing often dominant abuses of behavior," she said.
This claim focuses on Google, yet other big tech companies such as Amazon, Apple, and Microsoft are also under scrutiny by regulators and lawmakers worldwide.
A Google spokesperson told The Reg : "We still believe this case is speculative and opportunistic - we will argue against it vigorously. People use Google because it is helpful; not because there are no alternatives." ®
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[1] https://searchclaim.co.uk/
[2] https://www.theregister.com/2023/10/10/google_pays_apple_18_20_claims_bernstein/
[3] https://www.catribunal.org.uk/judgments/16067723-nikki-stopford-v-1-alphabet-inc-2-google-llc-3-google-ireland-limited-and-4
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z0X-stFJjItPH3TcefD1LwAAAMc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://www.arnoldporter.com/en/perspectives/advisories/2024/10/the-growth-of-uk-collective-actions#:~:text=Although%20the%20UK%20collective%20proceedings,active%20participation%20by%20class%20members.
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z0X-stFJjItPH3TcefD1LwAAAMc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z0X-stFJjItPH3TcefD1LwAAAMc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z0X-stFJjItPH3TcefD1LwAAAMc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/11/21/usa_vs_google_full_filing/
[10] https://www.theregister.com/2024/11/25/doj_google_collateral_damage_opinion/
[11] https://www.theregister.com/2024/11/23/opinion_google_chrome/
[12] https://www.theregister.com/2024/11/21/usa_vs_google_full_filing/
[13] https://www.theregister.com/2024/11/15/google_stops_eu_political_ads/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z0X-stFJjItPH3TcefD1LwAAAMc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://whitepapers.theregister.com/
Failed Regulatory Oversight
This is just one of many recent examples where regulatory oversight should have prevented an issue rather than letting it get too far.
Quite often the damage is done and it is hardly possible to get it undone after being left unchecked for too long.
What other search engines are out there? A quick (Google) search reveals some names, but most consumers default to Google, just because it is there embedded in their devices.
Why does it take an individual to take this action when it should have been the CMA?
Other failing UK regulatory environments include - I am sure there are a few more:
Monopolies and Mergers Commission, then Competition Commission and now CMA (Competition and Markets Authority)
Ofcom (Broadcast and Telecoms)
Ofgem (Energy)
Ofwat (Water and Sewage)
FCA (Financial Conduct Authority)
ICO (Information Commissioner's Office)
Interested to see where this will end up, but the timescales are far too long, which is one of the problems - Google's market position is too entrenched already.
Re: Failed Regulatory Oversight
UK regulatory environments are only there so they can give the illusion of something being done to keep the scoundrels in check.
Put your hand up if the ICO attended to your complaint and changes were made.
Now , put your hand up if the ICO did sod all and couldn't care less.
Exactly.
The British government, especially the last one, doesn't like too much regulation. It gets in the way of the brown envelopes.
Re: Failed Regulatory Oversight
Perhaps this also comes down to egregiously poor education re IT and online activity, and almost total indifference amongst the hosts that carry the Google parasite.
I haven't used Google...
for search, or a search engine that sucks off Google, or for anything else really, for at least five years. At least on the desktop—we'll quietly ignore my Pixel phone, although there are mitigating apps at work there.
Guess what? Life goes on without issue.
It only takes a few clicks. And the will.
[costs] which were allegedly passed on to consumers
There seems little 'allegedly' about it: everything we spend, on anything, ultimately contains the advertising budget associated with it. Even if a product is not explicitly advertised, there are very few products which are not part of a family, sharing development, production, and advertising costs.
I wonder just how much of what we spend goes directly to the advertisers (and thence to the advert providers like Google)?
Re: Ads?
Wot Ads?
There is a who industry devoted to splatting annoying ads for things that we don't want, can't afford etc etc.
There is a whole industry devoted to stopping the above.
I know which one I support.
Just to be clear, whenever I drive past the Alphabet Building (built for Nokia) in Farnborough, I give it the finger.
Re: Ads?
I agree entirely with the concept of not seeing adverts... but whether _I_ see them or not, they're still being paid for somewhere. And then there are all those other adverts - TV, Radio, advertising hoardings, print... they still come off the advertising budget and straight off the bottom line unless they're passed on to the customer.
Re: Ads?
I know which one I support.
Whether you see ads or don't see ads, you buy products that pay for advertising, ergo you pay for advertising. Lets say you only buy from local farmers who don't advertise, are completely off grid for energy, and are a nudist - you still pay taxes, and the government advertises.
Re: Ads?
Ads have a target demographic. Grumpy Old Men (like many here) are just not on the hit list for most ads apart from Funeral Plans and Life Insurance.
Do we care about the 'Freshness' of our washing? Hell no. As long as they get clean.
Watching an ad is time that people my age never get back. That's why I hardly ever watch things as they are broadcast. They get recorded so I can skip the ads.
Taxes I can't avoid Ads I can and do. Yes, I do buy from local farmers and am 99% off grid.
fast forward 10 years
- 10 yrs being rather optimistic...
court proceedings having cost both sides a couple of billions (guess who EXACTLY pays for the lawyers on both sides?), the proposed fine will have been reduced to 1.1 billion on non-admission of guilt, which in 2035 is 0.3 sec worth of Google's profit.
p.s. and guess where EXACTLY this reduced fine goes?
... this is an optimistic view, by the way, i.e. IF there is ANY fine.
Re: fast forward 10 years
This right here. Class action seems to be a way for lawyers to get rich - at least 30-40% is going to the lawyers. If this action is valid, why is the state not bringing it.
It's going to be interesting to see how this is going to connect Google to consumer prices. I recognise that advertising budget ultimately come out of the money customers spend. I can see how Google will affect the way advertising budget is spent but how the budget is set is another matter.