Next Tuesday the Federal Court's Justice O’Bryan will indicate how three publisher class actions against Google can proceed or whether to roll the claims together.

Two – brought by Phi Finney McDonald and Maurice Blackburn – have already combined. They are seeking compensation for every digital publisher with an Australian audience, even those based outside of Australia and those not plugged into the Google ad stack, over the last six years. They also seek "injunction relief to prevent the occurrence of further breaches" under Australian competition and consumer law, per lead lawyer, Miranda Nagy. 

The third claim, via Piper Alderman. seeks similar compensation, at least for Australian domiciled publishers, but is narrower in scope. 

Next week will likely determine which goes forward, and how.

Size of the dog...

Maurice Blackburn filed an 80-page statement of claim with the Federal Court of Australia on Valentine’s Day.

Exactly 96 years after a massacre of rivals orchestrated by Al Capone, the law firm alleges that Google’s multiyear moves to eliminate competition and game both media owners and advertisers has resulted in a publisher revenue bloodbath.

It’s seeking compensation running into the billions as well as injunctions to prevent what it claims are ongoing breaches of Australian competition and consumer law.

Whether regulators have the powers to force remedies – or even have the appetite to do so amid shifting political dynamics and fear of US sanctions – is another question. But Miranda Nagy, leading the case for Maurice Blackburn, says it’s a moot point.

“Class action lawyers never rely too much on governments doing the right thing,” she told Mi3. But private rights of action within the Competition and Consumer Act mean there are other avenues. Now Maurice Blackburn aims to square off with Google, Alphabet and global law firm Herbert Smith Freehills, AKA “the big dog”, per Nagy, of defendant class actions.

But Maurice Blackburn isn’t taking on the big dogs alone. It has wrapped a separate action by Phi Finney McDonald into its own, with the practice now acting as its agent and pooling resource.

Meanwhile rival law firm Piper Alderman has simultaneously launched a class action against Google. It’s also seeking compensation for publishers – though crucially only those based in Australia. Maurice Blackburn’s claim, if successful, aims to compensate any digital publisher with Australian audiences – from tiny apps to The New York Times – regardless of where they are domiciled. Even those that no longer exist, provided they were active at any point between 2019 and now.

Next Tuesday, or Pancake Day, Justice O’Bryan will indicate what’s in the legal mix, whether to roll both claims together, or flip one for the other.

The cases against

Both cases lift much of the evidence submitted in cases brought against Google in the US by the Department of Justice and state attorneys general – which used subpoenaed internal communications from both Google and Facebook – as well as analysis conducted by the ACCC via its digital platform inquiries. They likewise mirror cases underway in Canada and Europe.

The law firms allege Google manipulated and gamed publishers and brands for years with secret deals and projects – some in collusion with Meta – that actively sought to disadvantage them while entrenching Google’s market dominance. They claim it took billions of dollars away from publishers while fleecing advertisers in the process by charging far more than was either necessary or officially disclosed via ruses like ‘project Bernanke’.

Meanwhile, the firms claim Google moved actively to crush competition by refusing to participate in new ad markets, notably header bidding, and wielding its dominance to effectively shut them down.

Header bidding, Bernanke

Header bidding was a mechanism that allowed publishers to circumvent Google’s exchange and create a more competitive market, generating more revenue by using a piece of JavaScript code that effectively opened up their inventory to the broader market.

The competitive nature of auctions means more adtech firms bidding on audiences on behalf of advertisers in real time would likely mean higher prices – while giving publishers and the broader digital supply chain alternatives to Google’s pipes and wires.

Seeing the threat, Google refused to participate in header bidding and ‘killed it off’, per Maurice Blackburn’s statement of claim, to avoid being disintermediated by rival adtech firms and protect its take.

The statement of claim also alleges in detail that Google engineered systems to be able to see rivals’ bids and tilt auctions for eyeballs in its favour: It got the ‘first look’ at rival bids, and subsequently the ‘last look’ and could then adjust its own bids accordingly.

Meanwhile, according to the claim, Google allegedly charged advertisers a higher price – the second highest auction bid – but then gave publishers the third highest auction bid price, pocketing the difference and using it to further manipulate ad buying auctions. That purported ruse was dubbed ‘project Bernanke’.

'Very large sums’

The claim details explicitly Google’s dominance across the market, and states the case for Google and its actions to be deemed in breach of both Australian competition and consumer law.

If successful, there could be billions in dollars of compensation split between any app or online publisher that has or had Australian audiences at any time over the last six years – potentially even those not plugged in to the Google ad stack, per lawyers

Maurice Blackburn’s Nagy won’t put a number on it.

“We're not in a position to know what those sums are. We just know that they're going to be very large,” she told Mi3.

“This industry, this type of advertising, across the last six years is well over a $10bn-$12 billion proposition. Some part of that will be hopefully returned back to publishers. But it's way too early to work out what the overall sums are.”

Conflicted publishers

While the likes of News Corp told the US Department of Justice-led antitrust trial they felt “frustrated,” “stuck,” and unable to innovate, and that Google had hindered “fair competition” by giving publishers no “freedom to switch”, Nagy said no large publishers have yet joined the action.

That could be related to the fact that Google is still cutting deals, the last game in town after Meta scorned the news media bargaining code. Antony Catalano's regional publisher ACM, for example, told Mi3 it will not participate after extending its Google agreement late last year. “We’re not involved,” per MD Tony Kendall.

Yet ACM – and any other publisher on the sidelines – may well get paid if either Maurice Blackburn or Piper Alderman are successful. Which is perhaps why Nagy says most publishers are “watching to see what happens”. But she still wants to talk to any publisher, even if they don’t want to join the action, to better gauge impacts and potential scale of revenue loss.

If successful, Nagy said publishers that have never used Google’s stack for ads could still receive compensation.

“Some publishers use services that are offered by people other than Google. There aren’t many [alternatives] … not many people use them, they don’t have much reach. But our case also covers those people.

“This case is about serving ads in an automated way … the auctions that happen. But publishers also do bilateral or direct deals with some advertisers, and we think the conduct of Google has had an adverse impact on revenues that publishers get from those direct deals as well. And that is a pretty significant factor,” said Nagy.

“We think that prices were depressed, were lower than they should have been, not just for ads that are sold by programmatic auction but also those sold pursuant to direct deals. So it had a depressing effect more broadly than you might imagine.”