Shareholders sue Google, claim it hid anticompetitive ad practices Google parent Alphabet is facing a proposed class action lawsuit from investors unhappy that the company's alleged advertising monopoly, and the subsequent DoJ investigation into this, led to "significant losses and damages." The lawsuit [PDF], filed in the Northern District of California yesterday by lawyers representing …
It strikes me that the shareholders can see that there is no way out for Google in the long term - sooner or later, they are going to be hit with a lawsuit they can't just buy their way out of and that will result in major on-the-record financial and reputational damage.
So by suing Google like this first, it clears the shareholders of being party to these practices, leaving them still looking good when they decide on their next big investments. Yes, they might lose money in the short term, but to be dragged down by Google when the inevitable does finally happen would cost them even more.
Yeah, I've never quite understood shareholder class actions - if they are successful and get compensation for their "losses"*, then the usual share market reaction will be to send the share price down by more than warranted, in which case the shareholders will have "lost" more money, and presumably have to sue themselves.
*and, yes, I do understand that the losses are only on paper, unless the shareholders sold during the dip.
Not quite.
AFAICT the shareholder in question is apparently upset because they bought shares at a price which was higher than it would otherwise have been, because Google executives allegedly provided known false information in response to the 2020 antitrust lawsuit.
> This new suit seeks to establish a class of anyone who purchased Alphabet shares between February 4, 2020, and January 23, 2023
> [knowingly engaging in anticompetitive practices] put Alphabet's leadership in a position to either face the music and take a stock hit, or make a series of statements between 2020 and 2023 that "were materially false and misleading at all relevant times"
> A look at Alphabet's class A stock (GOOGL) indicates that it rose in the wake of the 2020 lawsuit
So AIUI the argument goes: If Google had come clean and admitted what they were doing, the share price would have instead dropped after the 2020 lawsuit, and they would have bought shares for a lower price than they did. Or perhaps not bought the GOOGL shares at all due to perceived risk.
The only way you could possibly not know that Google is monopolistic is to deliberately hide your head in the sand. Surely the investor class must have known that, which is why they invested in Google, to get a taste of that easy, ahem, monopoly money. Now there's a downturn in the market, and the rich are feeling mopey and looking for someone to blame. Goddamn duplicitous rent seekers.
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I started thinking about shareholders suing for more money because Google's monopoly was making them more money.
My brain entered a recursive loop, heap overflowed and stack dumped.
Next time I will use Forth to think about it - that's the only way it can possibly make sense.
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