The largest newspaper publisher by total circulation in the country has sued Google over allegations that the company is violating antitrust law in controlling tools used to buy and sell ads.
Gannett filed the lawsuit Tuesday against Google and its parent company, Alphabet, arguing that it controls how publishers sell their ad slots and is forcing them to sell increasingly more ad space to Google at lower prices, leading to less revenue for the publishers and the company’s rivals in advertising technology.
Gannett CEO Mike Reed explained the reasoning for the lawsuit in an op-ed in USA Today, saying news publishers’ advertising revenue has significantly declined as Google owns 90 percent of the market for “publisher ad servers,” through which publishers sell advertising space online.
“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,” Reed said.
He said Google also owns 60 percent of the market for “ad exchanges,” which run auctions for advertisers to receive space on publishers’ websites. He added that 60 percent of all of Gannett’s buyers come through Google, demonstrating that Google is controlling and manipulating “all sides of each online advertising transaction.”
Reed said this system hurts local news outlets that are struggling because of Google’s practices, and that newsroom employment has dropped by more than half since 2008. He said the lawsuit dives into more than a dozen practices by Google that Gannett believes hurt competition, starting in 2009 and continuing to the present.
Dan Taylor, the vice president of Google Ads, said in a statement that the claims in the lawsuit are “simply wrong.” He said publishers have many options to choose from in using advertising technology, and Gannett uses dozens of competing ad services.
“And when publishers choose to use Google tools, they keep the vast majority of revenue. We’ll show the court how our advertising products benefit publishers and help them fund their content online,” Taylor said.
Google told The Hill that it has provided billions of dollars to support journalism in the digital era and is one of the world’s largest financial backers of journalism.
It said publishers use multiple tools to sell ads on the platforms and Google’s advertising technology fees are transparent and consistent with industry standards.
Google has faced other legal challenges recently that target its dominance in digital ads. The Justice Department and eight states sued the company in January over its control of digital ad space, arguing that it is an “industry behemoth” and has “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers.”
The European Union also initiated an antitrust investigation into Google in 2021 and brought up new antitrust charges against the company last week. It said the company should sell off parts of its digital advertising business to revive healthy competition.
The Gannett lawsuit is seeking an unspecified amount in damages and an injunction against Google from further violating the Sherman Antitrust Act, a federal law that governs antitrust and monopoly regulation.
Gannett underwent multiple rounds of layoffs last year as part of cost-cutting measures amid a wider trend of several major news outlets undergoing layoffs.
The Associated Press contributed to this report.
