Google faces £5 billion lawsuit in the UK for allegedly abusing search dominance

Recently, the Japan Fair Trade Commission issued a cease-and-desist order against Google over search dominance on Android smartphones, demanding changes to how Google bundles its search app and Chrome browser. Now, the Guardian reports that Google is getting sued in the UK for up to a hefty £5 billion over similar allegations, adding another major legal headache for the tech giant.

This new challenge comes in the form of a class action lawsuit filed at the UK's competition appeal tribunal. Led by competition law expert Or Brook on behalf of potentially thousands of businesses, the suit argues that Google has unfairly elbowed out competitors when it comes to internet search.

The core claim is that Google abused its dominance to crank up the prices businesses have to pay for those crucial promotional spots that appear in search results, charging more than they could in a truly competitive market.

How did Google allegedly pull this off? The lawsuit points to tactics that might sound familiar if you've been following Google's regulatory battles elsewhere. It alleges Google pushed deals on phone makers to pre-install the Google search app and Chrome browser on Android devices.

That's pretty much what Japan's FTC just called them out on, and it echoes the core issues that led to the European Commission slapping Google with a record fine back in 2018 over Android practices.

The UK lawsuit also highlights Google's multi-billion-dollar payments to Apple to ensure Google Search is the default engine on iPhones. This specific point is a central pillar of the massive antitrust lawsuit brought by the US Department of Justice, which went to trial last year and is awaiting a verdict.

Regulators and litigants globally are zeroing in on these default and pre-installation deals as key mechanisms by which Google allegedly maintains its search monopoly.

Or Brook put it bluntly:

Regulators around the world have described Google as a monopoly and securing a spot on Google’s top pages is essential for visibility. Google has been leveraging its dominance in the general search and search advertising market to overcharge advertisers.

She argues that businesses really don't have much choice but to pay up for Google ads to get noticed online. The lawsuit further alleges that Google deliberately made sure its advertising tools worked better and had more features within its search engine compared to what competitors could offer. Google, for its part, isn't buying it. A spokesperson fired back, calling the lawsuit:

Yet another speculative and opportunistic case and we will argue against it vigorously. Consumers and advertisers use Google because it is helpful, not because there are no alternatives.

This UK lawsuit lands while Google is already under the microscope domestically. The UK's own Competition and Markets Authority (CMA) launched its own probe into Google's search services back in January, looking specifically at the impact on advertising markets.

The CMA noted at the time that Google handled about 90% of UK searches and was used by over 200,000 UK businesses for advertising.