Google rivals line up seeking damages after record $1 billion fine

A Costly New Phase for Google in Europe

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 favoring 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.

A Decades-Long Crackdown

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. They 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.

Google fought the ruling before losing at Europe's top court last year. Britain's Foundem pursued its claim from the start. Sweden's PriceRunner, backed by Klarna, filed a multibillion-dollar suit in 2022 after Google's appeal was rejected. UK price comparison site Kelkoo, which is seeking billions of pounds from Google in various damages claims after the EU decision against Google's shopping service, said the latest EU fines could boost ongoing claims.

"We expect these to be impacted somewhat by the DMA decision because it shows that Google is still self-referencing even to this day," Kelkoo CEO Richard Stables told Reuters, adding the DMA decision gave others more ground to sue. Matej Pardo, chief operating officer at litigation financing firm LitFin, which is backing two groups suing Google in Amsterdam for its shopping auctions, seeking over $1 billion combined, echoed the sentiment.

"There are already a lot of these claims being prepared and filed," Pardo said. "The DMA decision has given a lot of parties more ground to sue Google."