Gannett, the largest news publisher in the United States, has taken legal action against Google, joining a growing list of lawsuits accusing the search giant of monopolistic behavior. Gannett’s lawsuit echoes many of the arguments put forth by the Department of Justice (DOJ) in its second lawsuit against Google, filed earlier this year. The lawsuit alleges that Google’s dominance in the online advertising industry has negatively impacted publishers, readers, and the overall digital economy.
According to Gannett CEO Mike Reed, “Google has monopolized market trading to their advantage and at the expense of publishers, readers, and everyone else.” Reed emphasized the vital role of digital advertising in sustaining the online economy and expressed concerns about the lack of free and fair competition for digital ad space, which hinders publishers’ ability to invest in their newsrooms.
Gannett, which owns prominent publications like USA Today and various local newspapers, contends that Google’s extensive control over the online ad business has resulted in reduced ad spending despite increasing online readership. The core of the complaint revolves around Google’s ownership of the largest ad exchange and ad server, both acquired rather than developed organically, which has allegedly contributed to a decline in industry revenue.
In a statement responding to the lawsuit, Google emphasized that its services are popular due to their quality and not because of a lack of competition. Google Ads Vice President, Dan Taylor, stated, “These claims are simply wrong. Publishers have many options to choose from when it comes to using advertising technology to monetize.” Taylor pointed out that Gannett itself utilizes numerous competing ad services, including Google Ad Manager. Google further explained that publishers retain the majority of revenue when they opt to use Google tools, and the company will demonstrate in court how its advertising products benefit publishers and support their online content.
Google asserted that, on average, large publishers utilize six different platforms to sell ads on their websites, while advertisers and media agencies employ over three platforms to purchase ads. The tech giant also maintained that its ad tech fees are transparent and aligned with industry rates.
Gannett’s allegations closely align with those made by the DOJ in its January lawsuit (alongside eight states) aimed at dismantling Google’s advertising business. The DOJ accused Google of engaging in anticompetitive behavior, creating high barriers to entry, forcing competitors out of the market, and disadvantaging remaining competitors. This was the second lawsuit filed by the DOJ against Google, following a 2020 suit that targeted the company’s search and search-related advertising monopoly.
Gannett’s recent lawsuit and the DOJ’s legal actions both claim that Google has stifled competition through its acquisition strategies. The DOJ contended that whenever competitors and customers introduced innovative solutions that threatened Google’s control over specific ad tech tools, the company responded swiftly and effectively with anticompetitive measures.
It is worth noting that Gannett has faced previous allegations of monopolistic practices. Following its acquisition by New Media Investment Group and subsequent merger with GateHouse Media in 2019, Gannett underwent significant downsizing, leading to layoffs and the closure of numerous local news outlets. While Gannett owned 261 daily and 302 weekly newspapers at the time of the merger, those numbers dwindled to 217 dailies and 175 weeklies by the end of 2022. The company’s workforce also saw a substantial reduction, with employee numbers dropping from approximately 25,000 during the acquisition to 11,200 as per the most recent filing report.
As Gannett’s lawsuit against Google progresses, it adds another layer to the ongoing legal battles surrounding the search giant’s alleged monopolistic practices. The outcome of these lawsuits may have significant implications for the future of the digital advertising industry and competition within the market.
