Gannett, the largest U.S. newspaper chain and publisher of USA sued Google on Tuesday for trying to corner the market for online advertising by monopolising ad technology.
In a lawsuit filed in federal court in Manhattan, Gannett, which owns more than 200 daily newspapers, claimed that because Google controls the tools for buying and selling online ads, publishers are compelled to give the Alphabet Inc unit more cheap ad space.
Google keeps its “exorbitant monopoly profits,” while publishers and Google’s rivals in the ad technology market see “dramatically less revenue,” according to Gannett.
In an opinion piece that was published in USA on Tuesday, Gannett Chief Executive Mike Reed stated that “digital advertising is the lifeblood of the online economy.”
“Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”
Vice President of Google Ads Dan Taylor issued a statement that read, “These claims are just flat-out false.” He went on to say that by utilising Google, publishers “keep the vast majority of revenue” and have access to a range of ad technology options.
According to Gannett, it is seeking triple damages in addition to “very substantial” actual damages.
The lawsuit increases the legal pressure on Alphabet, based in Mountain View, California, which is already under scrutiny from regulators in two continents.
On June 14, the European Union brought a similar lawsuit, and said Google might have to sell some of its ad technology.
A case against Google was first filed by the US Department of Justice five months ago; 17 US states have since joined. Texas is leading a second group of states that are suing.
Nearly 80% of Alphabet’s total revenue in 2022 came from advertising, with Google accounting for $224.5 billion of that total. Google was also a significant contributor to Alphabet’s $60 billion profit for the year.
A large portion of Google’s YouTube video platform, Android, and email are all made possible by advertising.
Google’s first-quarter advertising revenue was $54.5 billion, barely changing from the previous year.
Since an estimated 86% of Americans now get their news online, Gannett, a newspaper publisher based in McLean, Virginia, has struggled with declining advertising revenue.
While newspaper ad revenue fell by almost 70% during that time, Gannett reported that digital advertising is now a $200 billion industry, nearly eight times larger than it was in 2009.
The company reported that print circulation at its newspapers dropped by almost 20% in 2020 and 2021, and that since 2019—the year it merged with GateHouse Media—more than 170 publications have been shut down.
On Tuesday, shares of Gannett closed at $1.86, down 1 cent. Since the merger’s completion in November of 2019, they have dropped by 70%.
The case is Gannett Co v. Google LLC et al., Southern District of New York U.S. District Court, No. 23-05177.
