In a significant legal development, Google has taken action to dismiss a federal antitrust lawsuit brought forth by Gannett, the largest newspaper chain in America. The lawsuit, filed in June within the Southern District of New York, alleges that Google’s substantial presence in the digital advertising realm has negatively impacted revenue for news publishers across the country.
This lawsuit is part of a broader pattern, as several antitrust complaints have been lodged against Google in recent years, all focusing on its dominance in the ad tech sector. Notable instances include:
1. The Justice Department’s lawsuit against Google in January, which accused the tech giant of “corrupting” the digital ad market—a market valued at over $200 billion in the United States.
2. European antitrust officials imposing a $1.7 billion fine on Google in 2019 for abusing its position in the advertising market.
3. A wave of class action lawsuits by hundreds of newspapers nationwide, alleging that Google and its rival Meta have leveraged their ad dominance to the detriment of their competitors.
In its motion to dismiss Gannett’s lawsuit, Google staunchly refuted the allegations that it had abused its dominant position as an ad tech provider to stifle competition. Furthermore, Google pointed out that similar core allegations had already been dismissed in a previous antitrust suit led by the state of Texas against the company last year.
Dan Taylor, Google’s Vice President of Global Ads, explained, “We’re filing a motion to dismiss specific elements of the Gannett lawsuit,” which includes claims related to Google’s introduction of tools and products such as “exchange bidding,” “encrypting user IDs,” and the mobile format “AMP,” all of which were purported to result in anti-competitive behavior.
Notably, Google also argued that Gannett had missed a “permissible period” of four years within which to file its suit, citing a provision of the Sherman Antitrust Act.
By the numbers, Gannett boasts over 200 daily local newspapers, along with numerous weekly local papers and its flagship national outlet, USA Today. In contrast, Gannett earned $2.9 billion in revenue last year from a combination of advertising, subscriptions, and digital services, while Google’s parent company, Alphabet, raked in a staggering $282 billion in total revenue. A substantial 80% of Alphabet’s revenue was generated from digital advertising.
In a statement accompanying its complaint against Google, Gannett highlighted that the tech giant had earned “upwards of $30 billion in revenue from the sale of ad space on publishers’ websites” in 2022. This figure was emphasized as being “six times the digital advertising revenue of all U.S. news publications, combined.”
Polly Grunfeld Sack, Gannett’s Chief Legal Counsel, expressed their perspective on the matter, stating, “It’s not surprising Google wants to retain their monopoly. Gannett will continue seeking fair competition in the digital advertising marketplace to ensure the sustainability of essential content and journalism in the communities we serve across the country.”
Google’s motion to dismiss Gannett’s antitrust lawsuit signifies a critical juncture in the ongoing legal battles surrounding Google’s dominance in the digital advertising space. With multiple lawsuits and regulatory actions, this case serves as a litmus test for the tech industry’s regulation and the preservation of competitive dynamics.
The heart of the matter lies in the question of whether Google’s actions genuinely hindered competition in the digital advertising sector or if they were merely exercises of its market power. The outcome could significantly impact the digital advertising landscape, influencing how tech giants operate and potentially paving the way for more equitable conditions for news publishers and smaller competitors.
As the legal battle unfolds, it’s clear that the ramifications extend beyond Google and Gannett. They encompass the broader discussions around antitrust regulations, market competition, and the sustainability of journalism in the digital age. It remains to be seen how the court will weigh the arguments put forth by both sides and whether this case will set a precedent for future antitrust actions against tech giants.
