Google has been slammed with a proposed class action lawsuit by its shareholders, who are unhappy about the tech company’s monopoly in the advertising industry. While the case is yet to go to trial, the matter has been investigated by the US Department of Justice, and that alone has led to significant damages and losses.
The shareholders have accused Google of knowingly concealing its monopolistic advertising strategies.
The lawsuit has been filed against Google’s parent company, Alphabet as well as CEO Sundar Pichai, CBO Philipp Schindler, and CFO Ruth Porat in the Northern District of California by the lawyers of AMI (a government employee investment management company).
So far, the lawsuit has only been proposed to be a class action. But if the proposition goes through, the group of plaintiffs will expand to all the people owning Alphabet stocks and who filed between February 4, 2020, and January 23, 2023, the day before the investigation against Google commenced.
Speaking of the details of the lawsuit, Google has been accused of absorbing its competitors or forcing them out of business and forcing the smaller competitors to use its tools and software. They’re also accused of tampering with the advertising auctions, manipulating the results, and trying to get complete control of the global advertising market.
If the court finds Google guilty of these accusations, the company will be forced to sell its Ad Manager Package and other advertising tools.
These are the accusations that are brought on Google after the investigation of the DoJ and eight other states. However, the lawyers of AMI decided to go a step ahead and claimed that the leaders mentioned above deliberately took these measures. They were fully aware of its illegalities because they saw gaining undivided power as the only means to skyrocket Google’s success.
What lies ahead for Google?
The lawsuit is as clear as day, and it seems that the accused do not have much choice in the matter. They can either accept the claims and face the consequences, which would mean selling their Ad tools, giving away the monopoly, increasing competition, and a huge plunge in the stock market. Or they might make a series of false statements between 2020 to 2023.
Google’s measures are said to be driven by selfish motives, which were to increase its revenue to benefit people in power financially.
Google seems to have landed in troubled waters. While the lawsuit brought by the DoJ is still in its early stages, they are facing the backlash from another lawsuit filed in 2020 that now has an interesting lead claiming that Google has deliberately destroyed important evidence (chat messages) to maintain their innocence.
Even a close look at their stocks will reveal why the company has been accused of monopolistic behavior.
The stocks rose in 2020, recovering from the slight dip that came after the first lawsuit filed against the company, and continued to rise up until 2022. But during this duration, most of its competitors suffered losses.
Also, since Google’s stocks seem to recover quite quickly after each lawsuit or summon, it might be hard for the plaintiffs to explain to the court how Google’s advertising approach is hurting the shareholders.
