Gannett sues Google over ‘scheme’ to gain online ad monopoly
Gannett, the parent company of USA Today, has filed a lawsuit against Google, accusing the tech giant of engaging in anticompetitive practices to establish an illegal monopoly in the digital advertising market. The lawsuit, filed in Manhattan federal court, claims that Google and its parent company, Alphabet, have been carrying out a deceptive scheme for over a decade. Gannett alleges that Google controls how publishers sell their ad slots and forces them to sell an increasing share of that ad space to Google at lower prices. As a result, publishers and Google’s ad-tech rivals suffer a significant decline in revenue, while Google enjoys monopoly profits.
This lawsuit adds to the regulatory troubles faced by Alphabet, as it is already facing multiple antitrust probes from the Justice Department regarding its search business, digital ad practices, and other aspects of its business empire. In Europe, regulators are also taking action against Google’s digital ad dominance, with the possibility of forcing the company to sell part of its digital ad tech platform. Gannett claims that Google’s actions have had a tangible negative impact on its business, leading to the shutdown of over 170 publications in the past four years alone. Circulation at Gannett’s largest active publications has also dropped by almost 20% from 2020 to 2021.
Digital advertising is a major source of revenue for Google, accounting for nearly 80% of its overall revenue last year, generating $224.5 billion. In contrast, Gannett highlights that ad revenues for news outlets have plummeted by nearly 70% since 2009, despite the online digital advertising market experiencing a nine-fold increase, now valued at $200 billion.
Google has yet to provide a comment on the lawsuit. Gannett, however, expects to secure significant damages and seek equitable relief to restore competition in the digital advertising landscape. Gannett chairman and CEO, Michael Reed, stated that Google has monopolized market trading to its advantage, at the expense of publishers, readers, and others. He emphasized the importance of fair competition in digital ad space for publishers to invest in their newsrooms.
Over the past few years, scrutiny has intensified on Google and other major tech firms regarding their digital advertising practices. Lawmakers in California, for example, recently advanced a bill that would require Big Tech companies, including Meta (formerly Facebook), to pay media outlets for their content. If this bill becomes law, Meta has threatened to remove all news content from its sites in California.
FAQs:
1. What is Gannett?
Gannett is the largest US newspaper publisher and the parent company of USA Today.
2. What is the lawsuit against Google about?
Gannett has sued Google, alleging anticompetitive practices that have allowed the tech giant to establish an illegal monopoly in the digital advertising market.
3. How has Google allegedly engaged in anticompetitive behavior?
Gannett claims that Google controls how publishers sell their ad slots and forces them to sell more ad space to Google at lower prices, resulting in decreased revenue for publishers and Google’s rivals.
4. What impact has Google’s actions had on Gannett?
Gannett states that Google’s ad practices have negatively impacted its business, leading to the closure of over 170 publications in the past four years and a nearly 20% drop in circulation at its largest active publications between 2020 and 2021.
5. How important is digital advertising for Google’s revenue?
Digital advertising is a significant source of revenue for Google, accounting for nearly 80% of its overall revenue in 2020, generating $224.5 billion.
6. What is the status of other antitrust investigations against Google?
Alphabet, Google’s parent company, is already facing multiple antitrust probes from the Justice Department regarding its search business, digital ad practices, and other aspects of its business empire.
7. What action is being taken against Google’s digital ad dominance in Europe?
European regulators have signaled that they may force Google to sell part of its digital ad tech platform to address its digital ad dominance in the region.
8. What is Gannett seeking in the lawsuit?
Gannett expects to recover substantial damages in the lawsuit and aims to obtain equitable relief to restore competition in the digital advertising landscape.
9. Has Google responded to the lawsuit?
Google has not provided a comment on the lawsuit at this time.
Gannett files lawsuit against Google for alleged plot to establish online ad monopoly
Gannett, the largest US newspaper publisher and parent company of USA Today, has filed a lawsuit against Google, accusing the tech giant of engaging in anticompetitive practices to establish an illicit monopoly over the digital advertising market. The lawsuit, filed in Manhattan federal court, alleges that Google and its parent company, Alphabet, have been operating a sophisticated and deceptive scheme for over a decade.
According to Gannett’s complaint, Google controls the sale of ad slots for publishers and pressures them to sell an increasing portion of their ad space to Google at reduced prices. This has resulted in significantly lower revenue for publishers and Google’s ad-tech rivals, while Google enjoys excessive profits from its monopoly.
This legal action adds to Alphabet’s regulatory woes, as it is already facing multiple ongoing antitrust investigations by the US Department of Justice regarding its search business, digital advertising practices, and other aspects of its extensive business empire. In Europe, authorities are also taking steps to curb Google’s dominance in the digital advertising industry and may require the company to divest part of its ad tech platform.
Gannett argues that Google’s actions have had a tangible negative impact on its business. The company claims that within the past four years alone, it has been forced to shut down over 170 publications. Additionally, circulation at Gannett’s largest active publications has decreased by almost 20% from 2020 to 2021.
Digital advertising is a crucial revenue stream for Google, accounting for $224.5 billion in revenue last year, making up approximately 80% of the company’s overall revenue. Meanwhile, the lawsuit states that the digital advertising market has grown nine-fold since 2009 and is now a $200 billion industry. Despite this exponential growth, ad revenues for news outlets have declined by nearly 70% during the same period.
Google has yet to comment on the lawsuit. Gannett expects to receive substantial damages and seeks equitable relief to restore competition in the digital advertising market. Michael Reed, Chairman and CEO of Gannett, expressed his concerns about Google’s monopolistic practices, emphasizing that without fair competition, publishers are unable to invest in their newsrooms.
In recent years, Google and other big tech companies have faced increasing scrutiny over their digital advertising practices, leading to discussions of potential regulations. Earlier this month, California lawmakers proposed a bill that would require Big Tech firms, including Meta (formerly Facebook), to compensate media outlets for their content. Meta strongly opposed the bill, warning that it may remove all news content from its platforms in California if it becomes law.