Google rivals queue up for damages following record $1 billion fine

Europe’s years-long crackdown on Google’s business practices is moving into a costly new phase, with the loss of the first case against it under new EU rules paving the way for a wave of private lawsuits seeking up to $10 billion in damages.

Alphabet’s search powerhouse, which has already swallowed billions of euros in EU fines since 2017, is also facing lawsuits from smaller rivals across Europe, according to half a dozen lawyers and litigation funders, and a tally of cases filed in half a dozen nations.

This followed a $1 billion fine – the first imposed under the Digital Markets Act – for favouring its own services and blocking app developers from guiding customers to cheaper alternatives outside its app store, Google Play.

That judgment of persistent misconduct could encourage more parties to sue, lawyers believe. ‘This will lead to a new wave of lawsuits, I suspect,’ said Thomas Hoppner, a partner at Geradin Partners who advised German price comparison platform Idealo for market abuse.

Germany’s largest ever fine for an antitrust violation, a Berlin court ordered Idealo to pay €465 million ($528.9 million) in damages in November.

Under Article 102, specialised search businesses “may seek damages, possibly not only ⁠for the DMA period but also for the years before the DMA breaches,” noted Hoppner, referring to older EU legislation that prohibits enterprises from exploiting a dominating market position.

“The claims are without merit,” Google said.“A Google spokesperson said, ‘We strongly oppose these lawsuits, brought by companies seeking a payout instead of investing in their own products.’

SHOPPING AROUND

The damages claims come as Google has gone on an AI investment spree that has left it burning cash, with Alphabet’s free cash flow becoming negative in the second quarter for the first time as a public business.

They come on top of €10.4 billion EU-led sanctions on Google over the past decade as authorities crack down on Big Tech. The private cases are at various levels, with more in the works and yet to be filed, lawyers and litigation financing businesses said.

When Google began promoting its own comparison shopping service in search results in 2008, traffic to other price comparison sites dropped and complaints were filed, resulting in an EU investigation that led to a €2.42 billion fine in 2017.

Google appealed the decision, but lost in Europe’s top court last year.

Britain’s Foundem pressed its claim from the beginning. In 2022, PriceRunner in Sweden, financed by Klarn, filed a multibillion-dollar claim after Google’s appeal was thrown out.

UK price comparison business Kelkoo, which is seeking billions of pounds from Google in multiple damages claims following the EU judgment against Google’s shopping service, claimed the additional EU penalty could strengthen continuing claims.“This will have some impact from the DMA decision because it proves that Google is still self-referencing even now,” said Kelkoo CEO Richard Stables to Reuters, adding that the DMA decision offered other companies greater space to suit.

This was repeated by Matej Pardo, chief operating officer at litigation financing business LitFin, which is sponsoring two parties suing Google in Amsterdam over its shopping auctions, demanding over $1 billion combined.“There are a lot of these claims being filed now, and probably more that are (being) ⁠prepared,” he said.

Price comparison website Trovaprezzi.it’s parent company Moltiply Group is looking to raise €2.97 billion.