Legal challenges against Google have intensified in the UK, following the US Department of Justice’s (DOJ) antitrust win against the tech giant in August. The UK Competition Appeal Tribunal (CAT) has approved a £7 billion case against Google, allowing a landmark legal action to proceed.
The case was brought forward by Nikki Stopford, co-founder of Consumer Voice, and the legal firm Hausfeld & Co LLP. Google now faces scrutiny over its advertising practices and its commercial agreement with Apple, both of which are central to the complaint.
The first part of the complaint focuses on Google’s advertising model, specifically its sponsored search results, where advertisers pay to appear higher in Google Search. A market study by the UK’s Competition and Markets Authority (CMA) found that Google’s parent company, Alphabet, achieved an average return on capital employed of 39% between 2011 and 2021, well above competitive benchmarks.
Critics argue that this inflated pricing, which is 30% to 40% higher than it would be in a competitive market, leads to increased costs for businesses, which are then passed on to consumers through higher product prices. Stopford claims that this overcharging results in consumers paying £7 billion more than they should.
The second part of the complaint concerns Google’s arrangement with Apple, wherein Google has paid billions to ensure that its search engine is set as the default on Apple’s iPhones and other iOS devices. This practice, which has already been challenged in the US, is argued to be anti-competitive.
UK Legal Action Against Google Advances Following US DOJ Antitrust Victory
The DOJ in the US has similarly contended that Google’s payments to Apple and Samsung to make Google Search the default on their devices stifle competition in the search engine market. This is a critical component of Stopford’s case in the UK as well.
In addition to these ongoing legal battles, Google faces potential scrutiny from the UK’s Competition and Markets Authority (CMA) under the Digital Markets, Competition and Consumers Act. This could result in further regulatory action, particularly in the mobile browser market.
The CMA has highlighted concerns regarding the dominance of Apple and Google’s browsers, such as Apple’s WebKit engine, which limits competition by restricting how competing browsers can operate on iOS devices. Google’s own browser design decisions are also seen as inhibiting competition, as they make it more difficult for consumers to choose alternative browsers, stifling innovation and choice in the market.
These ongoing regulatory actions reflect broader concerns about the power of Big Tech companies like Google and Apple. In the EU, the Digital Markets Act (DMA), which came into effect in March 2024, mandates that Google and Apple offer users more choice in default browsers and search engines.
Similarly, in the US, the DOJ is exploring whether Google should be forced to divest its Chrome browser as part of its efforts to address anti-competitive behavior in the adtech market. The regulators’ goal is to create a more competitive environment, but the question remains whether consumers will benefit from these disruptions, especially given concerns over security and the convenience of existing services.
