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Berger Montague Files Antitrust Class Action Against Google on Behalf of Ad-Supported Online Content Creators

DATE: December 24, 2020

SAN JOSE, Calif., Dec. 24, 2020 – Berger Montague PC filed an antitrust class action lawsuit Wednesday on behalf of a proposed class of “Publishers”—ad-supported online content companies. The lawsuit, Sterling International Consulting Group v. Google, LLC, was filed in the U.S. District Court for the Northern District of California, San Jose Division, where Defendant Google LLC is located. Sterling International Consulting Group (“SICG”) alleges that Google engaged in a scheme to monopolize the market for publisher ad server services.

SICG filed the lawsuit on behalf of a proposed class of all Publishers that sell digital display advertising inventory through a Google publisher ad server targeting consumers in the United States between December 23, 2016 and the date the Court certifies the class.

Publishers use ad servers to identify ad inventory created when users load the Publishers’ webpages and then solicit bids from advertisers’ ad tech agents to fill the ad slots. Publisher ad servers are part of what is known as the “Ad Tech Stack,” a series of services that work together to facilitate the purchase and sale of digital display ads on the web. Publisher ad servers directly interface with sources of advertising demand such as ad exchanges that conduct auctions between advertisers and notify the publisher ad server of the winning bid prices. Other entities in the Ad Tech Stack assist advertisers by optimizing advertiser bids in auctions and storing, tracking, and serving advertisements.

According to the lawsuit, Google provides the dominant offerings at each level of the Ad Tech Stack, positions Google gained through a series of anticompetitive actions. First, Google engaged in a series of acquisitions to gain footholds at each level of the Ad Tech Stack, including most notably, Google’s acquisition of DoubleClick in 2007. Second, Google allegedly took control of a substantial pool of advertisers’ demand by tying its data services to advertisers’ use of Google’s advertiser-facing ad tech offerings. Specifically, Google’s consumer-facing businesses (such as Search, Gmail, Maps, YouTube, Chrome, Android OS) provide Google with an unparalleled source of user data that advertisers can use to target their display ads and track their campaigns’ effectiveness. But to use those services to target users, Google allegedly requires advertisers to use Google’s ad tech offerings. Third, Google allegedly used its control over how its advertiser clients can bid on Publishers’ ad inventory to essentially prevent Publishers from accessing Google’s pool of advertisers without using Google’s publisher ad server. Because Google allegedly controls so much advertiser demand through this scheme, Publishers are left with little choice but to use Google’s ad server—a fact reflected in Google’s alleged 90% market share.

Further, Google allegedly used its market position to inhibit innovations that would have threatened its market dominance. For example, when header bidding debuted, it offered Publishers a potential way to access demand outside of the Google ad tech offerings. Google feared that if a large competitor with access to (1) significant user data, and (2) a large pool of advertisers, adopted and endorsed header bidding, the resulting competition would threaten Google’s market share. In 2017, when Facebook announced plans to do just that, Google reacted by allegedly negotiating an agreement pursuant to which Facebook would not directly compete with Google in ad tech offerings in exchange for Google offering Facebook privileged positions in Google’s ad auctions.

SICG alleges that Google’s scheme suppresses the ad revenues Publishers can generate on their content.

“This lawsuit seeks to restore free and fair competition to an industry that, we allege, has been intentionally captured and controlled by one dominant player through an illegal predatory scheme,” explained Michael Dell’Angelo, Managing Shareholder of Berger Montague, a leading complex litigation firm.

According to Patrick Madden, a Shareholder at Berger Montague, “Publishers have been impaired in their ability to monetize their digital content for years. The industry has seen layoffs, decreased investigative and other investment-heavy reporting, and a corresponding reduction in content quality. This lawsuit seeks to rectify that and restore Publishers’ ability to receive fair compensation for the content they create.”

Berger Montague is a national plaintiffs’ class action and complex litigation law firm headquartered in Philadelphia with additional offices in Minneapolis, Washington, D.C., and San Diego. Berger Montague litigates complex civil cases and class actions in federal and state courts throughout the United States. In its 50 years of operation, the Firm has pioneered the use of class actions and recovered well over $36 billion for its clients and the class members it has represented.

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