Gannett, the largest news publisher in the United States, filed a lawsuit against Google, accusing the tech giant of monopolizing advertising technology markets and engaging in deceptive commercial practices.
In an op-ed to USA Today, Gannett CEO and Chairman Mike Reed explained the reasons behind the lawsuit, emphasizing the need to restore fair competition in the digital advertising marketplace.
"The core of the case and our position is that Google abuses its control over the ad server monopoly to make it increasingly difficult for rival exchanges to run competitive auctions," Reed said in his USA Today piece.
Gannett owns more than 500 digital news and media brands, including USA Today, and has been in the business of local news for centuries, the USA Today op-ed said. However, as readers have shifted to online platforms, news publishers have seen a significant decline in advertising revenue, resulting in newspaper closures and job losses.
Reed highlighted the vital role of advertising in supporting news coverage, which has been a cornerstone of journalism since Gannett's oldest publication, the Poughkeepsie Journal, was established in 1785, he said in the USA Today piece. With 86% of Americans now reading news online, digital ad revenue has become essential for news publishers to provide timely and cutting-edge reporting. However, while the move to digital platforms should have presented significant opportunities, news publishers have witnessed a significant decline in advertising revenue.
According to Reed's USA Today article, Google's practices have had tangible consequences, not only reducing revenue but also shrinking the presence of local news when it is most needed. Gannett's lawsuit points out Google's control over the ad server market, with DoubleClick for Publishers holding a 90% market share, and its dominance in ad exchanges, where DoubleClick Ad Exchange holds more than 60% of the market.
Furthermore, Google controls the largest source of advertisers bidding on exchanges, creating an unfair advantage that affects all sides of online advertising transactions, the USA Today piece reported.
Google has reportedly effectively eliminated competition and driven down prices for publishers' ad inventory. The lawsuit claims Google's anticompetitive practices have allowed it to generate exorbitant profits while publishers suffer.
Google's manipulation of auctions for ad space enabled the company to make $30 billion in revenue from publishers' websites in 2022 alone, six times more than all U.S. news publications combined, the lawsuit alleges. The case highlights the harm caused to local news organizations, with more than 170 Gannett publications being shut down since 2019.
The decline in local news coverage has significant consequences for communities, depriving them of important information and civic engagement opportunities, according to the lawsuit.
Reed emphasized the negative impact of Google's practices on U.S. news organizations, particularly local news outlets that have been severely affected, his USA Today piece reported. Since 2008, newsroom employment has decreased by more than half, and 20% of newspapers have been forced to close.
In contrast, Google generated more than $30 billion in revenue in 2022 from the sale of ad space on publishers' websites, six times the digital advertising revenue of all U.S. news publications combined, Reed's USA Today op-ed said.
