TLDR:
- Google faces £5 billion ($6.6 billion) class action lawsuit in UK Competition Appeal Tribunal
- Lawsuit alleges Google abused its “near-total dominance” in online search market, resulting in higher advertising prices
- Filed on behalf of thousands of British companies that advertised with Google between 2011-2025
- Google allegedly stifled competition by making deals with phone manufacturers for pre-installation and default settings
- GOOGL stock trending down, has lost 17.3% year-to-date
Google’s parent company Alphabet Inc. is facing a massive legal challenge in the United Kingdom. The tech giant has been hit with a class action lawsuit seeking damages of more than £5 billion ($6.6 billion) over alleged market abuse practices.
The lawsuit, filed on Wednesday in the UK Competition Appeal Tribunal, claims Google has been misusing its dominant position in the online search market. Competition law academic Or Brook filed the suit on behalf of hundreds of thousands of British companies that advertised with Google between January 1, 2011, and April 16, 2025.
According to the legal action, Google’s practices have effectively pushed up prices for advertisers. The lawsuit specifically targets how Google has supposedly squashed competition from other search engines.
Allegations of Anti-Competitive Behavior
The plaintiffs argue that Google has used its monopoly over online search to hurt competition and strengthen its market dominance. They claim this has left UK businesses with no alternative but to use Google Ads to promote their products and services.
One key allegation focuses on Google’s deals with smartphone manufacturers. The lawsuit claims Google has been entering into contracts requiring the pre-installation of Google Search and Chrome browser on Android devices.
The legal action also points to Google’s arrangement with Apple. According to the lawsuit, Google pays Apple to ensure its search engine is the default option on iPhones.
These tactics, plaintiffs argue, have made Google “the sole viable platform for online search advertising.”
Another complaint centers on Google’s Search Ads 360 tool. The lawsuit alleges Google offers better features and support for its own advertising offerings compared to competitors’ options.
Market Dominance and Regulator Concerns
The issue of Google’s market power isn’t new to regulators. According to a 2020 study by the UK’s Competition and Markets Authority (CMA), Google earned nearly 90% of all revenue in the search advertising market.
This market position means advertisers feel they must secure top spots in Google’s search results to increase their companies’ visibility. The class action seeks to hold Google accountable for allegedly overcharging advertisers for its services.
The case comes as antitrust regulators worldwide are taking stronger actions against big tech firms. Several American companies including Meta Platforms, Amazon, Microsoft, and Apple face multibillion-dollar lawsuits in anticompetitive cases.
Some of these legal actions aim to break up tech giants to reduce their power in key sectors. In the UK and European Union, regulators are pursuing cases under the Digital Markets Act and the Competition and Consumers Act.
Stock Performance Impact
Alphabet’s stock has been negatively affected by these developments. GOOGL shares were trending lower, down 1.8% in pre-market trading after the lawsuit announcement.
The company’s stock performance has been weak this year overall. Year-to-date, GOOGL stock has lost 17.3% of its value.
Analysts remain split on Alphabet’s stock outlook due to ongoing market challenges. According to market data, GOOGL stock currently has a Moderate Buy consensus rating based on 27 Buy and 10 Hold ratings.
The average price target for Alphabet Class A shares is $203, suggesting a potential upside of 29.9% from current levels.
This lawsuit adds to the growing list of legal challenges facing major tech companies. It reflects increasing regulatory scrutiny of digital platforms that have grown to dominate their respective markets.
The class action specifically seeks to represent hundreds of thousands of British businesses that have used Google’s advertising services during the specified period.
If successful, the lawsuit could force Google to change its business practices and pay substantial damages to affected advertisers in the UK market.
The outcome of this case could set precedents for similar actions in other countries where Google holds comparable market dominance.
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