Gannett, the owner of USA TODAY and a couple of hundred local newspapers, recently joined with the U.S. Department of Justice and attorneys general from mostly blue states by filing suit against Google for violations of antitrust law.
The complaints against Google by Gannett are typical of antitrust suits. They include exercising monopoly power, engaging in deceptive trade practices, and unfairly manipulating markets. However, if you dig a bit deeper into Gannett’s reasons for suing Google, you will find the same reason that is at the bottom of almost every antitrust lawsuit: Gannett is unhappy with its low profits.
In explaining the effects of Google’s “anticompetitive” actions, Gannett claims “Google has reduced the value of publishers’ ad space” and that “a fair [market] would produce higher publisher revenue, greater investment in content, more impressions for sale, and ultimately more and better content for Gannett’s millions of readers.”
Obviously, Gannett is hoping that the judge who gets this case hasn’t been paying attention for the last 30 years, since the decline of the value of mainstream newspapers’ “ad spaces” began well before Google even existed.
One of the earliest challenges newspapers faced because of online competition was the loss of their monopolies on classified print advertising. The Internet also opened access to news sources that had not existed before. At first it was individual blog sites, followed by sites like TownHall that brought together like-minded writers and readers. Then, traditional news media joined the online migration, led by sites such as the Wall Street Journal Interactive Edition.
All of this began the “decline of the value of mainstream newspaper’s ad spaces” before Google was founded in late 1998. The major cause of this for Gannett and other mainstream news outlets was that competition introduced by the Internet had broken their monopoly on providing news. This is why they began losing readers – and ad revenue – by the millions, a trend that continues today.
U.S. e-commerce topped $1 trillion for first time in 2022 as Internet traffic is in the midst of a growth spurt that is expected to average 24% over the five years ending in 2026. Yet this online growth has largely evaded Gannett properties in recent years. In fact, USA TODAY should be worrying about competition from Yahoo, Fox News, and El Mundo rather than Google, all of which have more web traffic than the 45th-ranked usatoday.com
That USA TODAY and other Gannett properties are having problems with attracting readers – particularly moderate and conservative readers – should not surprise anyone given their left-leaning bias and participation in the cancel culture. "USA Today Decides That a Man is a 'Woman of the Year,'" "USA Today removes the word 'male' from op-ed by Connecticut's fastest female runner,” and "USA Today demoted me for a tweet - because its woke newsrooms are out of touch with readers" are just a few examples of this. Gannett, not Google, is the reason its readers do not have “better content.”
However, Gannett refuses to face the fact that the company itself is the primary cause of its low profits and “reduce[d] investment in content for readers.” Perhaps this is because it cannot give up its woke ways. But it also might be because Gannett decided that using the government to increase its profits through antitrust actions is a heck of a lot easier than competing in the news media and online advertising markets.
If this is the case, Gannett would not be the first to try this. Web browser pioneer Netscape encouraged the government to go after Microsoft in the 1990s for anticompetitive behavior. What was Microsoft doing to harm competition? It was giving away its browser for free, behavior that just happened to cut into Netscape’s profits from the sale of its browser.
The rapid demise of Netscape should serve as a warning to Gannett. And to conservatives who support the use of government to reshape market outcomes. The recent efforts of federal law enforcement to use technology and media companies, including Google, to censor speech is an example of this. If Gannett wants more profits and conservatives want less censorship, the answer is less, not more, government control of the Internet.
Bill Peacock is the policy director at the Huffines Liberty Foundation and the former Vice President of Research at the Texas Public Policy Foundation. He has extensive experience in Texas government and policy on a variety of issues including competitive markets and antitrust. His work has focused on identifying and reducing the harmful effects of regulations on the economy, businesses, and consumers.
