Google was hit with a class action lawsuit from its shareholders who are unhappy about Google’s monopoly of the advertising industry. Although the case is still pending, the US Department of Justice has already begun investigating the matter, which has resulted in significant damages and losses.
The shareholders accused Google of knowingly concealing its monopolistic advertising strategies.
The lawsuit was filed by AMI (an investment management company for government employees) against Google’s parent company Alphabet, as well as CEO Sundar Pichai and CBO Philipp Schindler. It is located in the Northern District of California.
The lawsuit has not been proposed as a class action. If the proposal is approved, the plaintiffs’ group will include all those who own Alphabet stock and who filed between February 4, 2020 and January 23, 2023. This was the day before the investigation into Google began.
Google is accused of forcing its smaller competitors out of business, or absorbing them. They are also accused of manipulating the results of the advertising auctions and trying to take control of the global advertising market.
If Google is found guilty, the company will have to sell its Ad Manager Package as well as other advertising tools.
These are the accusations levelled against Google following the investigation by the DoJ and eight additional states. AMI’s lawyers went one step further and claimed that the above-mentioned leaders had taken these steps intentionally. They knew the illegalities of these actions because they believed that gaining undivided authority was the only way to skyrocket Google’s popularity.
What is Google’s future?
The case is clear and the accused have no choice. They have two options: accept the claims or face the consequences. This would include selling their Ad tools, giving up the monopoly, increasing competition and a massive plunge in the stock markets. They might also make a series false statements between 2020 and 2023.
Google’s actions are believed to have been motivated by selfish motives. They were meant to increase revenue and benefit those in power financially.
Google seems to be in trouble. Although the DoJ lawsuit is still in its infancy, they are now facing backlash from a 2020 lawsuit that claims that Google deliberately destroyed important evidence (chat conversations) in order to preserve their innocence.
A close examination of their stocks will reveal the reasons why they have been accused of monopolistic behavior.
After a slight dip in 2020 following the first lawsuit against the company, stocks rose again and continued to climb until 2022. During this time, however, most of its rivals suffered losses.
Google’s stock seems to recover quickly after each lawsuit. It might also be difficult for plaintiffs to explain to court how Google advertising is harming shareholders.
