Google is facing two class-action lawsuits over its dominance in the ad tech sector amid claims it is hurting news outlets, with one regional publication stating its ad revenue from the company amounts to just $20 a month.
The federal court in Melbourne on Friday held a hearing for the class action brought by law firm Piper Alderman, on behalf of publications including LGBTQ+ outlet QNews and funded by British financial institution Woodsford, alleging Google has misused its market dominance.
The court also heard a proposed second class action, brought by Maurice Blackburn on behalf of regional outlet Riverine Grazier, will also be launched against Google in the coming weeks.
Websites, including Guardian Australia, typically include embedded advertising provided by Google that is pushed to those sites through programmatic auctions that determine what that site receives for hosting the ads. Google takes a cut from both the advertiser and the revenue provided to the site.
An Australian Competition and Consumer Commission report estimated Google was making around a 27% cut on each advertisement sold. The 2021 report found Google was involved in almost every part of the ad technology supply chain.
In 2020, 90% of ad impressions traded via this supply chain passed through at least one Google-owned service, the report found. The company had solidified its market power through takeover of ad companies, including DoubleClick and Admob, as well video platform YouTube, the report said.
The two class action cases allege Google’s actions have led to publishers receiving less in advertising revenue than they otherwise would have.
In a statement, Google said the allegation “ignores the intense competition where ad buyers and sellers have plenty of choice and we look forward to making our case”.
“Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” a spokesperson said after the hearing. “Google creates value for our publisher and advertiser partners in this highly competitive sector.”
The spokesperson also said the company has been “a major contributor to Australian publishers”.
The general manager of the Riverine Grazier, Krista Schade, told the ABC on Friday that her 151-year-old publication had set up an online news site to earn extra revenue, to stop having to increase prices for the print newspaper.
But the revenue publishers earn from Google ads will depend on traffic to that site. A site with lower traffic is likely to earn less, and with 850 print editions and in a community of 3,000 readers, the Riverine Grazier was sometimes earning just $20 a month.
“Our numbers are woefully low. We might make $20 a month from website ads, so it’s been a really tough slog to try and earn anything online,” she said.
“We’re a weekly newspaper. We cover things like the local darts competition and safety on farms and the awards day at the high school.”
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QNews’s publisher, Richard Bakker, last year said Google’s dominance had “created an environment that’s not just unfair but also detrimental to smaller publishers and media outlets”.
The court heard on Friday that compensation was being sought in the QNews class action, in relation relate to historical conduct by Google that the tech giant has ceased doing.
Lawyers for the Riverine Grazier indicated their separate action may involve conduct Google is still undertaking and might require injunctive relief.
Justice Michael O’Bryan asked the publishers if they have held discussions to join their cases, but they indicated they had yet to do so.
The next case management hearing has been set down for 4 March, with the Riverine Grazier’s claims expected to be filed in the federal court in mid-February.
The legal action comes after the US Department of Justice last year took Google to court over whether the tech giant illegally monopolised the digital advertising industry. The hearings, which occurred in September last year, detailed evidence from a former Google executive that the company was aiming to “crush” its digital advertising rivals.
Google rejected the premise of the case, arguing it has significant competition in the advertising industry and its competitors take a larger cut. A judgment has yet to be handed down in the US case.
The Albanese government is planning to introduce a news media bargaining incentive charge applied to digital platforms which is effectively refunded by an offset if they pay news companies directly instead. It was developed after Meta has signalled it is unwilling to enter into new agreements to pay news outlets for news. Google has, however, begun signing new agreements with publishers to pay for news.