Gannett sues Google over ‘scheme’ to gain online ad monopoly

USA Today parent Gannett sued Google on Tuesday, alleging the tech giant has used anticompetitive business practices to gain an illegal monopoly over the digital advertising market.

Gannett, the largest US newspaper publisher, argued in Manhattan federal court that Google and its parent company, Alphabet, have “carried out a sophisticated, anticompetitive and deceptive scheme for well over a decade.”

“Google controls how publishers sell their ad slots, and it forces publishers to sell growing shares of that ad space to Google at depressed prices,” the filing says. “The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google enjoys exorbitant monopoly profits.”

The lawsuit represents yet another regulatory headache for Alphabet, which already faces multiple pending antitrust probes from the Justice Department over its search business, digital ad practices and other elements of its sprawling business empire.

A separate effort to crack down on Google’s digital ad dominance is underway in Europe, where regulators have signaled they may force the company to sell off part of its digital ad tech platform.

Gannett argued that Google’s actions have had a measurable negative impact on its business.

The complaint noted that the company has shut down more than 170 publications within the last four years alone.

Elsewhere, average daily circulation at Gannett’s largest active publications plunged by nearly 20% from 2020 to 2021.

Digital advertising is the most profitable piece of Google’s business, generating $224.5 billion in revenue last year. That figure amounted to nearly 80% of the company’s overall revenue.

Gannett’s lawsuit stated that the online digital advertising market has experienced a “nine-fold increase” since 2009 and is now a $200 billion business. Despite the massive proceeds, ad revenues for news outlets has plunged by nearly 70% over the same period.

Google did not immediately return a request for comment.

In a separate release, Gannett said it expected to recover “very substantial damages” in the suit, as well as “equitable relief to restore competition in digital advertising.”

“Google has monopolized market trading to their advantage and at the expense of publishers, readers and everyone else,” Gannett chairman and CEO Michael Reed said in a statement.

“Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms,” Reed added.

Google and other Big Tech firms have faced mounting scrutiny over their digital ad practices in recent years — with several locales exploring potential crackdowns.

Earlier this month, state lawmakers in California advanced a bill that would require Big Tech firms, including Facebook parent Meta, to pay media outlets for their content.

The bill, which is set for final consideration later this year, prompted a sharp rebuke from Meta, which warned it could remove all news content from its sites in California if it becomes law.