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Discover how Gannett’s lawsuit against Google could redefine the digital advertising landscape, as it claims Google’s ad monopoly is harming the local news business.
Key Takeaways:
- Gannett has filed a federal lawsuit against Google and Alphabet, alleging that their monopolistic practices within the ad tech market have hurt local news business.
- Google has refuted Gannett’s claims, arguing that publishers have a range of advertising technology options to choose from, and maintain the majority of revenue when using Google’s tools.
- This lawsuit comes amidst growing antitrust complaints against Google’s ad business both in the US and EU, potentially signalling a seismic shift in the digital advertising landscape.
Gannett Sues Google Alleging Ad Monopoly: A Clash Impacting News Publishers
Gannett, America’s largest newspaper publisher, has instigated legal action against tech behemoth Google, and its parent company, Alphabet. The lawsuit, lodged on a federal level, contends that Google’s monopolistic practices within the ad tech market are negatively impacting local news. This case could be pivotal in re-establishing competition within the digital advertising arena.
The Crux of the Gannett Lawsuit: Ad Monopolies and Publisher Revenue
Gannett states that the burgeoning digital ad market hasn’t necessarily translated into increased profits for publishers, primarily due to the monopolies held by Google and Alphabet. The lawsuit alleges that the tech giants control the ad tech needed for buying and selling ads, thereby limiting the publisher’s ability to maximize revenue. Google’s ad server monopoly, according to Gannett CEO, Mike Reed, has negatively impacted local news organizations, a concern expressed in a USA Today editorial.
Google’s Response: Denying Gannett’s Allegations
In response to Gannett’s lawsuit, Google stands firm. Dan Taylor, the VP of Google Ads, denies the allegations, asserting that publishers have numerous ad technology options at their disposal, with Google Ad Manager being one among many. He further asserts that the lion’s share of revenue remains with publishers who opt to use Google’s tools, hinting that Google’s defense in court will focus on demonstrating the benefits their ad products bring to publishers.
This case is just the most recent legal challenge Google has faced regarding its online advertising practices. Google has previously encountered legal action from the US Department of Justice, several US states, the European Commission, and the UK’s Competition and Markets Authority. These cases have been largely premised on accusations of Google’s monopoly within the ad market.
Gannett also endorses the Journalism Competition and Preservation Act (JCPA), an act aiming to allow publishers to negotiate with big tech corporations like Google and Meta over content distribution. However, Meta has expressed opposition, claiming that it may have to remove news from Facebook in the US if the act is passed.
Gannett, with its portfolio of over 200 local publications and USA Today, is bringing attention to the potentially adverse effects of monopolies on the digital ad market. They are not alone in their struggle; many publishers heavily rely on Google’s advertising technology for operational support, as Google allegedly controls about 90% of the ad market for publishers.
Despite Google’s current dominance, a slight erosion of Big Tech’s share in the digital advertising market has been noticed. Regardless, Google remains the most significant individual player. The outcome of this lawsuit could influence the landscape of digital advertising and news publishing in significant ways.
Broader Implications: Antitrust Complaints and The Future of Google’s Ad Business
Google’s legal woes are not confined to the US; antitrust complaints in the European Union over its advertising business are mounting. Just last week, EU officials suggested breaking up Google’s advertising business due to perceived “inherent conflicts of interest.” Similarly, earlier this year, the Justice Department and eight states called for Google to be broken up, echoing similar competition concerns.
