Gannett, the largest newspaper chain in the United States and publisher of USA Today, has taken legal action against Google, accusing the tech giant of monopolising ad technology and attempting to dominate the online advertising market. In a complaint filed in federal court in Manhattan, Gannett, which owns over 200 daily newspapers, alleges that Google’s control over tools for buying and selling online ads compels publishers to sell ad space at lower prices to the Alphabet-owned company. Consequently, Gannett argues that Google reaps “exorbitant monopoly profits” while publishers and its ad technology competitors suffer from significantly reduced revenue.
Gannett CEO Mike Reed highlighted the crucial role of digital advertising in the online economy, stating in an opinion piece published in USA Today that “without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.” The lawsuit seeks substantial damages, including actual, punitive, and triple damages, as Gannett aims to address what it perceives as an unfair advantage enjoyed by Google in the advertising market.
Google Ads Vice President Dan Taylor responded to the allegations, stating that Gannett’s claims are unfounded. Taylor argued that publishers have multiple options when it comes to advertising technology and retain the majority of their revenue when utilising Google’s services.
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This lawsuit further escalates the legal pressure on Alphabet, Google’s parent company, which is already facing regulatory scrutiny in multiple jurisdictions. On June 14, the European Union filed a similar lawsuit against Google, suggesting that the company may be required to divest some of its ad technology. Additionally, the US Department of Justice, joined by 17 states, previously initiated a separate case against Google, with another group of states led by Texas also pursuing legal action.
Google’s advertising revenue in 2022 reached $224.5 billion, comprising nearly 80 per cent of Alphabet’s total revenue and serving as a significant driver of Alphabet’s $60 billion profit. The income generated from advertising enables Google to offer numerous free services, including email, Android, and a significant portion of its YouTube video platform. In the first quarter of this year, Google’s ad revenue remained steady at $54.5 billion compared to the previous year.
Like many newspaper publishers, Gannett, headquartered in McLean, Virginia, has faced challenges due to declining ad revenue, as approximately 86 per cent of Americans now consume news online. While digital advertising has become a $200 billion industry, almost eight times its value in 2009, newspaper ad revenue has plummeted by nearly 70 per cent during the same period. Gannett highlights that its print circulation declined by nearly 20 per cent in 2020 and 2021, leading to the closure of over 170 publications since its merger with GateHouse Media in 2019.
Gannett’s stock closed at $1.86 on Tuesday, experiencing a 70 per cent decrease since the merger’s completion in November 2019.
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