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‘Egregious’: Google facing two Australian class actions

By David Swan

Google is facing multiple proposed Australian class action lawsuits, with two law firms investigating claims the tech giant engaged in anticompetitive conduct in the multi-billion dollar digital advertising market.

Law firms Phi Finney McDonald and Maurice Blackburn have this week separately announced proposed class actions against Google, alleging the company has a dominant position at all points of the digital advertising supply chain, taking billions of dollars in revenue away from publishers and advertisers as a result.

Phi Finney McDonald principal lawyer Joel Phibbs, who led action against Google and Apple in a Federal Court app stores trial earlier this year, is now investigating the tech giant for its conduct in the ad tech market.

Law firms Phi Finney McDonald and Maurice Blackburn this week separately announced proposed class actions against Google.

Law firms Phi Finney McDonald and Maurice Blackburn this week separately announced proposed class actions against Google.Credit: AP

“Imagine if the ASX owned and controlled the majority of brokerages buying and selling securities on that exchange, so that it could preference transactions that benefit its own interests above those of the people wanting to trade,” Phibbs said.

“Regulation of the ad tech space has not kept up with the rapid growth and dominance of Google, and, until recent moves by regulators and class action lawyers globally, Google has exploited its position of dominance to the detriment of publishers and advertisers unchecked.”

“Ad tech” describes the complex technological tools that connect website publishers wishing to sell ad space, and advertisers wishing to buy ad space. They involve the use of complex algorithms and systems to trade digital ads on websites and apps in an automated auction-style system that happens in a matter of milliseconds.

Google dominates all facets of this process and has built up its power in ad tech through its access to consumer data as well as through major acquisitions on online ad service provider, including of DoubleClick in 2007, AdMob in 2009 and YouTube in 2006.

Governments and regulators globally are grappling with how to rein in the power of tech giants including Google, Apple and Amazon. In the US, the Department of Justice is currently suing Google over its ad tech dominance, and the court has just heard closing arguments at the end of a 15-day trial. A decision there is expected as early as next month.

Phibbs said those proceedings had revealed egregious conduct from Google.

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Phi Finney McDonald principal lawyer Joel Phibbs.

Phi Finney McDonald principal lawyer Joel Phibbs.

“We’ve had the benefit of almost a de facto discovery of sorts, through what the DOJ has done,” he said.

“We particularly want to hear from publishers and advertisers. There’s a great degree of concern about the conduct and how it’s affected people’s revenue lines. The challenge, as always, with Google as it was with Apple, is having people who are prepared to stand up and have their case lead the charge on this.”

Class action suits typically take between two and four years to play out. Phibbs suggested that the case could be worth billions of dollars given a similar ongoing lawsuit in Canada is worth as much as $8 billion.

On Friday, Canada’s competition watchdog announced a lawsuit against Google, alleging it illegally linked two advertising tools to maintain a monopoly and used this dominant position to distort ad auctions by preferring its own tools. It filed an application that, if successful, would require Google to sell two of its ad-technology tools and pay a fine of up to 3 per cent of its global revenue.

Australian publishers have long complained about meagre online advertising revenues, and many have blamed Google’s dominance of the market for their decisions to lay off staff.

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“We believe that the tech giant’s conduct … foreclosed rivals and tied businesses to its services in a manner that we are concerned is inconsistent with lawful competition,” Maurice Blackburn principal Miranda Nagy said in a statement.

“Our case will be focused on recovering compensation for publishers, who we believe were charged too much for Google’s services and received less revenue from their advertising inventory.”

An inquiry by Australia’s competition and consumer watchdog in 2021 found that Google’s conflicts of interest had “led to poor outcomes” for publishers. It found that more than 90 per cent of ad impressions traded via the ad tech supply chain passed through at least one Google service in 2020.

“Over more than a decade, Google’s vertical integration and strength in ad tech services has allowed it to engage in a range of conduct which has lessened competition over time and entrenched its dominant position,” the ACCC said at the time.

The federal government is also expected next week to unveil a policy framework designed to curb anticompetitive behaviour by the tech giants, with Assistant Treasurer Stephen Jones appearing at an event at the University of Sydney titled “50 years of consumer protections: Revitalising consumer law to strengthen markets and deliver fairness in the digital age”.

Google did not respond to a request for comment.

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Original URL: https://www.brisbanetimes.com.au/link/follow-20170101-p5kuj3