Aussie SMBs have ‘little choice but to bow’ to Google’s higher ad fees, claims law firm

Aussie law firm Slater & Gordon is calling on businesses that have taken out advertising with Google to register for its investigation into the tech giant’s alleged anticompetitive practices.

Slater & Gordon is investigating Google’s sustained dominance in online advertising, alleging that this dominance has led to a reliance by small and medium Australian businesses on Google’s ad technology – potentially resulting in overcharging.

According to the law firm, which is conducting the investigation “on behalf of Australian business owners,” for the average Aussie SMB, there is “no alternative” to Google and no room to challenge the fees that the tech giant requires.

“Across the world, we have seen action being taken against Google for its conduct in advertising,” said Slater & Gordon practice group leader Ben Hardwick.

“In particular, Google has been found in the US to have illegally acquired and maintained a monopoly in online advertising.”

Here in Australia, the law firm claims that businesses are virtually left with no choice but to rely on Google’s advertising services, which involves paying a “significant” commission fee for each ad space on top of the thousands spent each month.

Slater & Gordon also claimed that Aussie SMBs are left with little to no control over the rollout of their paid advertisements, or insight into the operation of their ad campaigns.

“Google’s power in the ad tech industry is so extensive that the vast majority of ads you see online – whether on websites or in search results – will have gone through one of Google’s platforms, allowing Google to extract its high fees and earn millions from Australian businesses,” said Hardwick.

Hardwick stated that in order for Aussie SMBs to keep their businesses running, they have “little choice but to bow” to Google’s demands.

“Google’s dominance in online advertising means that Australian businesses have little choice but to bow to Google’s demands to keep their businesses running. This is allowing Google to charge a much higher fee (called the ‘take rate’) than they otherwise would have been able to in a properly competitive market,” he said.

“Many of these Australian businesses are start-ups or small to medium businesses – the job-creating lifeblood of Australia’s economy – who have little choice but to operate and advertise online.

“With their profit margins already cut to the bone these high fees are adding to the cost of doing business.”

Slater & Gordon encouraged any businesses that have previously taken out advertising on Google or used any of Google’s advertising technology over the past six years to register.

“The investigation is likely to conclude in the commencement of a claim seeking that advertisers be repaid some of the fees they have paid to Google for the use of Google’s ad sale technology, which we will allege Google was only able to charge as high fees as it did, because of anticompetitive conduct,” said the firm’s registration page.