Gannett Co., the publisher of USA Today and hundreds of daily and weekly newspapers across the country, on Tuesday sued Google and its parent Alphabet, claiming that the tech giant illegally monopolizes the advertising technology market.
“Google has carried out a sophisticated, anticompetitive, and deceptive scheme for well over a decade,” claims the suit, filed in US District Court for the Southern District of New York. It notes that despite the $200 billion business that is today’s digital advertising market, news publications’ ad revenue has plunged nearly 70% since 2009, and as a result, newspaper employment has dropped by more than half and more than 20% of the nation’s newspapers have shuttered, including over 170 Gannett publications since 2019.
“The result is less news where it is needed most,” the complaint states. “Communities throughout the United States now do not have a suitable local paper to advise on local events, hold local officials to account, or encourage the civic bonds that are paramount in an increasingly polarized country.”
The suit also notes that the issue is not that readers demand less online content.
“Growing numbers of U.S. readers get their news online, and spending on online advertising to reach those readers has exploded,” the complaint states. “Rather, publishers do not see the growing ad spending because Google and its parent Alphabet unlawfully have acquired and maintain monopolies for the advertising technology (“ad tech”) tools that publishers and advertisers use to buy and sell online ad space.”
“Google controls how publishers sell their ad slots, and it forces publishers to sell growing shares of that ad space to Google at depressed prices,” the suit continues, describing how Google controls 90% of the market for the ad servers that publishers use to offer ad space for sale, and more than 60% of the market for ad exchanges, that run auctions among advertisers bidding for ad space on publishers’ websites.
“The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google enjoys exorbitant monopoly profits,” the filing states.
The suit contends that Google’s scheme is “wildly profitable,” and notes that in 2022 Google made $30 billion from digital advertising. “That is six times more revenue than every single U.S. news publication made from digital advertising, combined,” the complaint states. “Google, as middleman, has dwarfed the content creators that invest in journalists, editors, photographers, and many others to produce important news content.”
The suit is one of several launched against Google in recent years, including one filed in January by the Department of Justice and attorneys general from eight states that charges Google with anticompetitive conduct.
A group of attorneys general led by Texas also filed a suit in 2020 claiming anticompetitive practices over Google’s ad tech products.
Google did not immediately respond to a request for comment on the latest suit.
“Our lawsuit seeks to restore fair competition in a digital advertising marketplace that Google has demolished,” Gannett CEO and Chairman Mike Reed wrote in a column that appeared in USA Today Tuesday. “Google’s practices have real world implications that depress not only revenue, but also force the reduction and footprint of local news at a time when it’s needed most.”