On Tuesday, media company Gannett filed a federal lawsuit against Google alleging anti-competitive business practices and an ad tech monopoly in the digital ad tech space. The lawsuit, which has far-reaching implications for the digital advertising landscape, highlights ongoing concerns over Google’s monopolistic control and the potential consequences for media companies and advertisers alike. Gannett, who is the largest publisher in the US with more than 200 local newspapers and USA Today, hopes to end Google’s stronghold in digital advertising markets and restore competition.

Publishers like Gannett rely on digital ad revenue from their online news outlets to fund their operations and continue journalism in the markets they serve. Gannett argues that Google’s business practices have “depressed revenue” by impacting local newsrooms through monopolizing the digital ad markets where publishers and advertisers buy and sell ad space.

By taking legal action in a federal court, Gannett seeks to not only protect its own interests but also to pave the way for a more equitable and competitive ad tech ecosystem, benefiting both publishers and advertisers. The company alleges that Google’s practices have led to inflated advertising costs, restricted consumer access to diverse news sources, and an unfair advantage for Google.

Specifically, Gannett says Google controls 90% of the market for “publisher ad services” and over 60% of the market for “ad exchanges” that run auctions where advertisers bid for ad space on publishers’ websites. With Google in control of ad tech and employing business practices in their favor, the company is unfairly buying, selling and manipulating all aspects of online advertising transactions.

“Google’s unlawful conduct has resulted in significant anticompetitive effects in the markets for publisher ad serving and ad exchange,” reads the complaint. “By thwarting competition for publisher inventory, Google has reduced the value of publishers’ ad space and thereby undermined investment in online content.”

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Complaint’s claims

Gannett addresses seven separate counts in the complaint’s claims:

• Count 1: Monopolization of the market for publisher ad servers
• Count 2: Monopolization of the market for ad exchanges
• Count 3: Attempted monopolization of the market for ad exchanges
• Count 4: Unlawful tying
• Count 5: Unlawful deceptive acts or practices
• Count 6: Common-law fraud
• Count 7: Unjust enrichment

Gannett chairman and CEO Michael Reed shared his views in a June 20, 2023 news release.

 “Google has monopolized market trading to their advantage and at the expense of publishers, readers and everyone else. Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms. For more than a hundred years, Gannett has been a tireless advocate for freedom of the press empowering communities to thrive. This lawsuit seeks to ensure we can continue our mission for hundreds of years more,” Reed said.

In the lawsuit, Gannett wants Google to be prevented from continuing to violate the Sherman Act and New York law and prohibited from future anticompetitive behavior. Gannett seeks damages, treble damages, punitive damages and/or restitution which would be determined in a jury trial. Gannett also wants Google to pay reasonable attorneys’ fees and expenses and pre- and post-judgment interest.

Gannett is not alone

Gannett is not alone in their frustration. In October 2020, the US Department of Justice, along with 11 state attorneys general, filed a civil lawsuit to stop Google from its anticompetitive behavior and “exclusionary practices.” The DOJ filed another lawsuit earlier this year, alleging Google has engaged in anticompetitive behavior over the last 15 years.

“Today’s complaint alleges that Google has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies,” said Attorney General Merrick B. Garland in a January 24, 2023 news release. “No matter the industry and no matter the company, the Justice Department will vigorously enforce our antitrust laws to protect consumers, safeguard competition, and ensure economic fairness and opportunity for all.”

“The complaint filed today alleges a pervasive and systemic pattern of misconduct through which Google sought to consolidate market power and stave off free-market competition,” added Deputy Attorney General Lisa O. Monaco. “In pursuit of outsized profits, Google has caused great harm to online publishers and advertisers and American consumers. This lawsuit marks an important milestone in the Department’s efforts to hold big technology companies accountable for violations of the antitrust laws.”

Google’s side of the story

Though we have not seen a statement related to Gannett’s lawsuit, Dan Taylor, vice president of global ads for Google, spoke out in January about the DOJ’s lawsuit in a blog post titled “DOJ’s lawsuit ignores the enormous competition in the online advertising industry.” In his argument against the DOJ, Google names other competitors in the ad tech space that are not being scrutinized the same way – Microsoft, Amazon, Apple, TikTok, Comcast, Disney, Walmart and Target, among others.

“Google’s products expand choice for publishers and advertisers,” Taylor says. “This complaint mischaracterizes how our advertising technology products work. These products help publishers make money to fund their websites, apps and videos – which helps Internet users access a wide range of free content. And they make it easy for businesses to reach consumers through cost-effective digital advertising.” 

In addition to the blog post, Taylor shared a three-page document that sets the record straight about the ad tech business.

Insider Take

There are a lot of major players in this fight, all with much to lose. Regulatory agencies and state attorneys general have gone after Google. Meanwhile, Gannett files a federal lawsuit, and regulatory agencies in other countries are looking at the ramifications of an ad tech monopoly. This will take years to work its way through the court system, and no one knows the outcome or fallout, but it seems some deregulation may be headed Google’s way. Is it preventable or inevitable?

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