Topline
Gannett, publisher of USA Today and over 200 daily local news publications in the U.S., filed suit against Google and parent company Alphabet over its alleged monopoly on the advertising business and the effect it’s had on the news industry.
The sign for Gannett headquarters is displayed in McLean, Virginia. Gannett has filed a civil … [+]
Key Facts
In a lawsuit filed Tuesday morning, Gannett accused Google and Alphabet of maintaining an illegal monopoly over the tools used to buy and sell advertising online.
This, Gannett said in its suit, has created a lack of competition in the space, which has “depressed” the prices publishers can charge for advertising and “dwarfed” the amount of content that news organizations, which have historically relied heavily on advertising revenue, can produce for readers.
Gannett told the Wall Street Journal it is seeking “substantial damages.”
Forbes has reached out to Alphabet for comment.
News Peg
The newspaper industry has been rocked by declining advertising revenue and subscriptions for decades as the internet and technology has changed how people consume news. The Rebuild Local News Coalition, a nonprofit organization working to counter the collapse of local news, reports that since 2004, while the U.S. population has increased, the number of newsroom employees in the nation has fallen 57%, with an average of two newspapers shutting down each week. This has left 1,800 communities without a source of local news, leading to more misinformation, higher rates of government corruption and lower rates of civic engagement, the coalition said. Most media observers blame Google and Facebook as a leading cause of this decline due to their disruptive advertising business. A 2021 report by the American Economic Liberties Project reported that 86% of online advertising is now sold through a “stock market-like ‘advertising exchange’ controlled by these tech giants.” This means news organizations, which the report argues are doing the “heavy lifting” by creating content that attracts readers, only receive 30 to 50 cents per dollar of advertising revenue, according to the report.
Crucial Quote
In an editorial published alongside this lawsuit’s release, Gannett CEO Mike Reed pointed out that 86% of Americans read the news online and argued that Google is to blame for news organizations failing to capture that market. “The move online should have created enormous opportunities for publishers,” he wrote. “Digital advertising is now a $200 billion business – nearly an eight-fold increase since 2009. Yet news publishers’ advertising revenue has significantly declined. Google’s practices have real world implications that depress not only revenue, but also force the reduction and footprint of local news at a time when it’s needed most.”
What To Watch For
Whether other newspaper publishers will sign onto this lawsuit. Forbes has reached out to McClatchy and Lee Enterprises, two of the most prominent newspaper publishers in the U.S., for comment.
Further Reading
Gannett Sues Google, Alleges Monopolization of Ad-Tech Markets (The Wall Street Journal)
Google Is About To Turn The Online Publishing Industry Upside Down (Forbes)
Google Earned Over $10 Million From Misleading Anti-Abortion Ads, Group Claims (Forbes)
Source: https://www.forbes.com/sites/willskipworth/2023/06/20/americas-largest-newspaper-publisher-sues-googleheres-why/