GOOGLE’S EUROPEAN ANTITRUST LAWSUITS EXPLAINED
Businesses in the UK and EU are seeking billions in damages
22 December 2022
In the digital advertising industry, Google can be compared to fire: It provides a valuable service that lets an industry live, but it’s also immensely destructive. It’s that damaging side of Google in digital advertising which has led to two new, major lawsuits in the UK and EU.
These latest lawsuits are a warning on two fronts. Firstly, they’re a warning to the United Kingdom to catch up with the EU’s latest standard-setting antitrust legislation, which is designed to prevent these practices going forward.
They’re also a warning to brands and advertisers to not rely too heavily on Google. While their services are invaluable, Google’s self-preferencing and term dictation can be suffocating.
Let’s take a deeper dive!
WHY IS GOOGLE GETTING SUED?
A long-standing claim against Google has been that with its size and influence, they create self-preferencing monopolies. That was confirmed by the UK’s Competition and Markets Authority (CMA) in 2019, where their deep dive into the digital advertising markets ecosystem found major dysfunction and pointed out Google and Meta in particular as the major culprits.
The current lawsuits against Google reflect the CMA’s findings. In the UK, Google is being sued on behalf of 130,000 businesses, which publish around 1.75 million websites. The litigation claims that Google’s self-preferencing, anti-competitive practices have hurt publishers financially to the tune of £13.6 billion. A second, parallel lawsuit is currently in the process of being filed in Dutch courts, representing European businesses.
This isn’t the first time Google has found itself in hot water under the same accusations. In 2021, French authorities fined Google $268 million for self-preferencing in the adtech market. The US Department of Justice, after submitting an antitrust lawsuit in 2020, has just another completely separate lawsuit about Google’s digital monopoly.
The consistent cross-continental courtroom proceedings have prompted European lawmakers to get involved, but the no-longer European UK government has found itself lagging behind with a lack of sufficient antitrust legislation.
FORGING FOUNDATIONAL LAWS
Google is no stranger to antitrust lawsuits, which is a good indicator that the law hasn’t been going far enough. The deterrence of an occasional antitrust lawsuit doesn’t seem to outweigh the benefits of monopolizing the adtech industry.
To focus more on preventing monopolization rather than reacting to its effects, the EU recently passed the Digital Markets Act, a foundational law that can impose eye-watering fines if Google and other major players don’t toe a strict pro-competition line. You can read our write-up about the DMA here.
The DMA is set to prevent lawsuits like the ones currently being filed in the UK and EU from being necessary in the future. Now removed from the EU and no longer subject to its laws, the UK should take inspiration and pro-actively push through legislation – lest its publishers are left to file more litigation for damages again in the next several years.
BRANDS NEED 360-DEGREE COMMUNICATION STRATEGIES
As publishers and brands alike await the DMA’s full effects and clamor for the UK to take legislative action, the question of the digital advertising industry’s relationship with Google and the rest of the GAFA economy remains.
It’s inevitable that publishers and brands will need to work with Google and other monopolies in the space. While publishers are going through the courts, brands can proactively strike a balance with their marketing strategies by evaluating all distribution channels and partners.
These are our recommendations for how brands and advertisers can strengthen and diversify their marketing strategies:
1. Build your first-party data
Focus on developing first-party data and building a strong client base. Offer incentives for sign-ups and encourage account creation to build internal mailing lists and contact customers directly. First-party data will be all the more relevant in the upcoming cookieless future.
2. Actively run and test campaigns with independent providers
Diversifying ad distribution with various independent providers ensures that not all the eggs are in the same basket. ShowHeroes’ solutions, for example, offer a vast premium publisher network and precise advertising distribution outside of the GAFA hegemony by combining contextual and AI-powered semantic targeting technology with creative, ad hoc content production via ShowHeroes Studios.
3. Establish customer loyalty
Google is great for acquiring customers top of funnel, but customer retention is achieved when content is relevant and integrated into what the consumer is already viewing. Contextual targeting delivers ads to the viewer at the right time in the right place by exposing them to brand messages that are relevant to what they are already consuming. Further reading on creating positive associations can be found in our blog post on brand suitability.
Customer loyalty is cemented by utilizing first-party data, brilliant follow-up messaging, and outstanding products and services.
Learn more about ShowHeroes’ benefits for advertisers, from incremental reach to SemanticHero and more, below!