- GOOG
July 28 (Reuters) – A decades-long crackdown on Google’s business practices in Europe is entering a costly new phase, as the loss of the first case brought against it under new EU legislation opens the door to a wave of private lawsuits demanding up to $10 billion in damages
Having already absorbed billions of dollars in EU fines since 2017, Alphabet’s search giant is now facing lawsuits from smaller rivals across Europe, according to half a dozen lawyers and litigation financiers, and a tally of cases filed in half a dozen countries.
That has been precipitated by a $1 billion fine, the first under the Digital Markets Act, imposed on the company for favouring its own services and preventing app developers from steering users to cheaper options outside its app store Google Play.
That finding of ongoing wrongdoing may embolden more parties to sue, lawyers say. “I think this will trigger a new wave of litigation,” said Thomas Hoppner, a partner at Geradin Partners, which advised German price comparison platform Idealo for market abuse.
A Berlin court in November awarded Idealo €465 million ($528.9 million) in damages, the biggest fine ever awarded by a court in Germany for an antitrust infringement.
Specialised search firms “may seek damages, possibly not just for the period of the DMA but also for the years prior to the DMA breaches” under Article 102, Hoppner added, referring to older EU legislation prohibiting companies from abusing a dominant market position.
Google said there is no merit in the claims.
“We strongly disagree with these lawsuits, which are brought by companies looking for a payout instead of investing in their own products,” a Google spokesperson said.
The damages claims come as Google’s AI spending spree has left it burning cash, with Alphabet’s free cash flow negative in the second quarter for the first time as a public company. Tech and chip stocks are under pressure as investors question lofty valuations amid concerns over booming AI infrastructure spending.
The cases also come on top of €10.4 billion EU-led fines on Google over the last decade as regulators take a harsh stance on Big Tech. The private cases are at different stages, and more are being prepared and yet to be filed, according to lawyers and litigation financing firms.
When Google started pushing its own comparison shopping service in search results in 2008, traffic to rival price comparison sites plunged, triggering complaints and an EU probe that produced a €2.42 billion fine in 2017.
