MCLEAN, Va. (CN) — The country's largest news media publisher filed suit Tuesday against Google, claiming the global technology company has monopolized online advertising technology.
Gannett, the owner of over 200 local daily print publications and national publications like USA Today and the United Kingdom's Newsquest, filed the complaint in Manhattan federal court. The media giant alleges that Google applies deceptive commercial practices by controlling how publishers sell their ad slots, forcing publishers to sell growing shares of that ad space to Google at depressed prices resulting in less revenue for publishers.
"Google has monopolized market trading to their advantage and at the expense of publishers, readers and everyone else. Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms," said Michael Reed, Gannett's chairman and CEO, in a press release.
Gannett, which owns publications in 43 states, says the low ad revenue impacts all its publications. Over 170 Gannett publications have shut down since 2019, while newspaper newsroom employment has dropped by more than half since 2009.
"The result is less news where it is needed most," the lawsuit 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."
According to the suit, Google owns the technology used in the digital ad marketplace, giving it control of the market.
Publications use a publisher ad server to manage their digital ad slots inventory, also called impressions. The ad server identifies when an impression is available for sale, solicits bids and chooses which offer is the winner. Google controls over 90% of the publisher-ad-server market.
Google also controls over 60% of all ad exchanges, a technology platform that facilitates buying and selling media advertising inventory from multiple ad networks by allowing bidders to determine the inventory price through its company DoubleClick Ad Exchange.
"With control over the largest ad exchange and ad server — both of which Google acquired rather than developed — Google has carried out a sophisticated, anti-competitive and deceptive scheme for well over a decade," the suit states.
According to the complaint, Google made $30 billion from manipulating auctions for ad space across the internet in 2022, six times more revenue than every U.S. news publication combined from digital advertising.
Gannett also claims that Google unfairly profits off news publishers' content. The circulation of daily and weekly newspapers has decreased by more than 40% since 2009, yet Google made upwards of $60 billion from third-party news content on its search page in 2022.
Google has capitalized on America's move from print and TV news to consuming news through the internet. Over 86% of Americans consume news content over the internet through new methods like interactive infographics, videos and photo essays.
The switch to online allows publishers to advertise directly to the consumer rather than casting wide nets with their advertisements that consumers might view as irrelevant.
"That makes publishers' ad space markedly more valuable to advertisers, who no longer need to spend ad dollars where they are unlikely to make a difference, and to readers, who are more likely to see advertisements in line with their interests," the suit states.
A bipartisan coalition of 17 state attorneys general brought an antitrust case against Google in 2020. The Justice Department brought its own ad tech lawsuit against Google earlier this year, while the European Union's competition authority filed a similar case last week based on the same underlying conduct. Despite Google's attempts to dismiss the claims, they remain in litigation.
The DOJ and EU seek a breakup.
"A remedy requiring Google just to change its behavior would allow Google to continue doing what it has been doing so far, just under a different disguise," said Margrethe Vestager, executive vice president of the European Commission for a Europe Fit for the Digital Age.
Reed warned in Gannett's announcement that without a fair market, the future of news media is at risk.
"For more than a hundred years, Gannett has been a tireless advocate for freedom of the press, empowering communities to thrive," Reed said. "This lawsuit seeks to ensure we can continue our mission for hundreds of years more."
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