Google faces a £7 billion collective action due to abuse of dominance in search

A collective claim against Google will today be filed in the Competition Appeal Tribunal (CAT) arguing that the business has used its search engine dominance to shut out competition in mobile search. It is alleged that Google uses its market dominance to raise the prices paid by advertisers for prominence on the Google search page. Those increased prices are then systematically passed on to consumers, who are charged higher prices for the goods and services they buy.

Hausfeld represents proposed class representative, Nikki Stopford, a UK-based consumer champion with 25 years’ experience advocating and raising industry standards for consumers.

The claim seeks approximately £7bn in redress on behalf of tens of millions of consumers – in short, anyone aged 16 years or over who has purchased goods and/or services from a business selling in the UK, which used search advertising services provided by Google. The action is being brought as an opt-out collective action, meaning that everyone in the UK affected is automatically included as a claimant in the case unless they opt out.

The case against Google

The collective action argues that Google used its position in the UK search engine market to overcharge advertisers and that these costs were then passed directly on to the consumer.

• Google forced mobile phone handset manufacturers to pre-install the Google Search and Google Chrome browser apps on devices that used Google’s Android operating system
• Google paid billions to Apple to ensure that Google was the default search engine on devices, such as the iPhone, that used Apple’s iOS operating system. A complaint by the Department of Justice and several Attorneys General in the US in January 2021, as well as recent findings by the UK Competition and Markets Authority, support the claim that Google’s commercial agreement with Apple foreclosed the market for search on iOS devices.

Furthermore, the European Commission imposed the biggest fine in history on Google for the anti-competitive practices in Android.

The alleged abuses by Google are possible because Google is set as the default search engine account for at least 94% of the mobile device sector, by usage. Google Ads generated over $224 billion in revenue in 2022, accounting for almost 80% of parent company Alphabet’s revenue ($283 billion in 2022).

Nikki Stopford, proposed class representative in the action, said:

“Almost everybody uses Google as their go-to search engine, often trusting the company to help them find the best products 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.

“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.”

Luke Streatfeild, Partner at Hausfeld, leading the litigation, said:

“Google provides a great service, but it isn’t free. Instead, this claim says that Google has choked off competition in search 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. We represent Nikki Stopford in bringing this action, to promote healthier competition in digital markets, and compensation for UK consumers for the losses they have suffered because of Google’s breaches of competition law.”

Who is eligible to be part of the claim?

All that is necessary is that a consumer purchased goods or services from a business who advertised using search advertising services provided by Google. It is not necessary for them to have seen the goods or services advertised on Google, or used Google to purchase the goods or services. This is because the claim says that these higher prices affected all of a business’ products if it advertised on Google.

Those who are interested in finding out more about the claim and signing up for regular updates should visit www.searchclaim.co.uk.

About the class representative

Nikki Stopford is a current member of the British Standards Institute (BSI) Standards Policy and Strategy Committee and Chair of its Consumer Forum. She is also co-founder of Consumer Voice and brings 25 years of experience in advocating and raising industry standards for consumers. She has held executive leadership roles running successful digital and content-led consumer-facing businesses that have engaged and advocated for millions of consumers. For more than 10 years, she was Group Director of Research and Publishing at Which? – the UK's largest consumer organization. She was also COO Officer at Resolver, a well-known technology, data and digital business operating in consumer complaints and dispute resolution markets.

Additional notes

Affected claimants, on whose behalf the class action is brought, will not pay costs or fees to participate in this legal action, which is being funded by global commercial litigation funder Hereford Litigation. The action is insured, which means that class members have no adverse cost risk in relation to the claim.

Hausfeld has instructed Daniel Jowell KC and Colin West KC of Brick Court Chambers, and Mehdi Baiou and Andrew Lomas of One Essex Court.

Media

City A.M 
Consumer Voice
Evening Standard
Global Competition Review (subscription)
The Guardian
The Independent

Media enquiries

Palatine Communications - Conal Walsh / Victoria Fell / Joshua Wolff
SearchClaim@palatine-media.com