Google and its parent company Alphabet have been sued by the publisher of USA Today over allegations that the tech giant abused its dominant position in the advertising technology market.
Gannett Co., which owns over 500 digital news and media brands, said in a complaint filed Tuesday that Google’s monopolistic control of how publishers sell their ad slots has hurt the company’s bottom line and is bad for consumers of news.
“It forces publishers to sell growing shares of that ad space to Google at depressed prices,” the complaint reads. “The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google enjoys exorbitant monopoly profits.”
Google’s publisher ad server, DoubleClick for Publishers (DFP), controls over 90 percent of the publisher-ad-server market.
It also controls over 60 percent of the ad exchange market with its DoubleClick Ad Exchange (AdX) platform, while setting rules that prohibit buyers from participating in any other exchange.
“With control over the largest ad exchange and ad server—both of which Google acquired rather than developed—Google has carried out a sophisticated, anticompetitive, and deceptive scheme for well over a decade,” the complaint alleges.
Thanks to its grip on the ad exchange and server, Google has been “wildly profitable,” Gannett said.
Google made around $30 billion in 2022 alone from auctioning off ad space across the internet, which Gannett alleged was done in a way that is manipulative.
That’s around six times more than all U.S. news publications made from digital advertising combined, according to the lawsuit.
“Google, as middleman, has dwarfed the content creators that invest in journalists, editors, photographers, and many others to produce important news content,” the complaint reads.
“Google’s unlawful monopolization must be stopped,” the plaintiff’s attorneys wrote.
The complaint was filed in the U.S. District Court Southern District of New York, and the case is 1:23-cv-5177.
In a statement to The Epoch Times, Google highlighted its longstanding support for journalism and called Gannett’s claims “simply wrong.”
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Gannett said that despite the fact that the digital advertising market is worth around $200 billion per year, Google’s unfair monopolistic practices have squeezed news publications’ ad revenue.The digital ad revenue that news publications bring in has plummeted around 70 percent since 2009, even though the market has increased ninefold since then.
As a result, newspaper employment has dropped by more than half since 2009, and more than 20 percent of America’s newspapers have shut down. Over the past four years alone, more than 170 Gannett publications have been shuttered.
“The result is less news where it is needed most,” the complaint states. “Communities throughout the United States now do not have a suitable local paper to advise on local events, hold local officials to account, or encourage the civic bonds that are paramount in an increasingly polarized country.”
Since Google has tied its ad exchange to its publisher ad server, the U.S. publishing industry cannot reach around 60 percent of buyers without using Google’s platforms.
With monopolistic control over ad serving, Google drives down prices for publishers’ inventory, thinning their profits, the complaint alleges.
“Google prohibits publishers from soliciting competitive bids from rival exchanges, while at the same time rigging AdX’s bids by trading on inside information from DFP,” the complaint states.
Gannett said that this is not what should be happening in a properly functioning, competitive market.
The complaint asks the court to declare Google’s actions illegal and award Gannett as yet undetermined damages and reimbursement of legal costs.
Google disputed Gannett’s claims. “These claims are simply wrong,” Dan Taylor, vice president of Google Ads, told The Epoch Times in an emailed statement.
“Publishers have many options to choose from when it comes to using advertising technology to monetize,” Taylor continued, noting that Gannett uses dozens of competing ad services.
“And when publishers choose to use Google tools, they keep the vast majority of revenue,” Taylor added.
“We’ll show the court how our advertising products benefit publishers and help them fund their content online,” he said, signaling that the company is gearing up for a court battle.
Google further said in a statement provided to The Epoch Times that top news publishers retain over 95 percent of ad revenue and that its tool, Confirming Gross Revenue, lets companies verify the absence of hidden fees in digital ad transactions.
The lawsuit is one of several launched against Google in recent years.
In 2020, for example, a group of attorneys general led by Texas filed a lawsuit accusing Google of anticompetitive practices related to its ad tech products.
This year, attorneys general from eight states alleged that Google had subverted competition in digital ad technology.
And in the European Union, Google has been accused of breaching antitrust rules, with regulators saying in a preliminary assessment that the only solution is to force Google to break up.
In all cases, Google has disputed the allegations, arguing that its ad tech has helped merchants reach customers and grow their business while expanding choices for customers and lowering their costs.
