Gannett, The Google Case: What You Need to Know

The nation’s largest newspaper chain sued Google on Tuesday, arguing that the search giant’s dominance of the digital ad market is stifling the struggling local news industry.

The complaint From Gannett, the filing in federal court in New York alleges violations of antitrust and consumer protection laws. It’s the latest challenge to Google and parent company Alphabet on this front, following actions by the US Department of Justice, the Australian government and a group of small West Virginia weekly newspapers.

A Gannett’s op-ed was published in USA Today, a national newspaper, the company’s CEO, Mike Reed, argued that “Google monopolizes markets for critical software and technology products that publishers and advertisers use to buy and sell ad space.” As a result, he wrote, newspapers are reaping less of the $200 billion market for online advertising, even as online readership continues to grow.

“Connett’s lawsuit seeks to restore fair competition in the digital ad market that Google has demolished,” he said in a separate news release. “Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital advertising space, publishers cannot afford to invest in their newsrooms.

In a statement released Tuesday, Google Ads vice president Dan Taylor vehemently denied the claims against the company.

“There are many options for publishers to monetize using ad technology,” he said, adding that Gannett uses dozens of competing ad services. He argued that Google’s ad services allow publishers to keep most of the revenue.

Competitors and critics of Google have long accused Google of using its position in the advertising world to favor its own products over those of others. The advertising ecosystem is dizzyingly complex, comprising hundreds of companies that offer services as diverse as helping to design ads and tracking whether someone clicks on them.

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But over two decades, Google has steadily expanded its footprint in the ad business by buying other companies — unlike its rivals, operating products at every stage of the advertising process, selling tools to advertisers and publishers. Acts as an intermediary between the two. Today, it controls many of the world’s most important advertising platforms, including YouTube and Google Search.

In 2020, a group of state attorneys general sued the company for using unfair practices in the space. Earlier this year, the Justice Department launched its own lawsuit. Last week, the European Union issued its own complaint that Google is seeking to sell parts of its ad tech empire.

Two years ago, Australia led the way in getting Google and Facebook — another formidable player in the online advertising market — to require media companies to pay for all links shared. In response, Facebook blocked all news sharing in Australia, and Google threatened to pull its search engine from the country. (Google later signed deals with major publishers that helped them avoid the harsher parts of the law.)

HD Media, which owns several weekly magazines in West Virginia, sued Facebook and Google two years ago — and called on other news publishers to join in what managing partner Doug Reynolds said “will fight for the future and protection of journalism.” Our democracy.”

Cameron Dowlatshahi, a Los Angeles antitrust attorney, said the moves reflect frustration that companies have failed to thrive in the digital age. “These companies rely on [Google] For their survival,” he said. “Maybe they’re assessing at this point that they won’t survive.”

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Omar Ochoa, an antitrust and class-action attorney, said Gannett’s most recent lawsuit “could significantly increase the chances” of lawsuits by states and the Justice Department.

Earlier this year, the New York Times went the other way, signing a deal with Google worth about $100 million over three years. Wall Street Journal.

Gannett’s lawsuit comes as the chain faces financial challenges, for which many employees blame CEO Reed. The company has closed or sold several newspapers since its merger with the Gatehouse chain in 2019, which executives said was for its cost-savings potential.

In August, the company reported a loss of $53.7 million on revenue of $748.7 million between inflation and rising print costs. Dozens of employees were laid off, including some who had last worked in their newsrooms.

This month, hundreds of employees at 24 Gannett newspapers walked off their jobs and decided not to go to work, shortly after Reid touted cuts and other “cost-management initiatives” that saved the company millions. Their strike was aimed at focusing on budget cuts and pressuring shareholders to vote no-confidence in Reid.

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