Google and Facebook monopolized the digital ad market to the detriment of newspapers, the owner of the West Virginia Charleston Gazette-Mail alleges in a new antitrust lawsuit against the companies.
“There is no longer a competitive market in which newspapers can fairly compete for online advertising revenue,” HD Media alleges in a complaint filed Friday in U.S. District Court for the Southern District of West Virginia.
The complaint relies on the key allegations in an antitrust lawsuit brought against Google late last year by Texas Attorney General Ken Paxton and nine other attorneys general.
Their lawsuit -- one of three antitrust cases brought by government officials against Google last year -- alleges that Google rigged online ad auctions, to the detriment of publishers. Among other claims, Paxton said that publishers attempted to combat Google by adopting header bidding but starting in 2018, Google and Facebook allegedly collaborated to undermine header bidding.
Google's Adam Cohen, director of economic policy, recently issued a detailed denial of those claims. Cohen wrote in a Jan. 17 blog post that Google created an alternative to header bidding in order to solve problems associated with the technology.
“Header bidding auctions take place within the browser, on your computer or mobile phone, so they require the device to use more data in order to work. This can lead to problems like webpages taking longer to load and device batteries draining faster,” Cohen wrote. “And the multilayered complexity of header bidding can lead to fraud and other problems that can artificially increase prices for advertisers, as well as billing discrepancies that can hurt publisher revenue.”
Cohen added that Paxton's claims about Facebook's involvement with Google's alternative to header bidding are misleading.
Facebook is facing a separate antitrust lawsuit by the Federal Trade Commission and attorneys general.
HD Media -- which owns other newspapers in West Virginia -- says in the complaint that the allegations are drawn from the other antitrust lawsuits against Google and Facebook by government officials.
“If proven to be true," HD Media writes, referring to government officials' claims, "Google and Facebook have monopolized the digital advertising market thereby strangling a primary source of revenue for newspapers across the country."
HD Media's lawsuit explicitly blames Google and Facebook for the well-publicized decline in newspapers' ad revenues which, according to the complaint dropped from $49 billion in 2006 to $16.5 billion in 2017.
“Since 2006, the news industry has been in economic freefall, primarily due to a massive decrease in advertising revenue caused by defendants’ anticompetitive and unlawful conduct,” the complaint alleges.
While the lawsuit casts blame on Google and Facebook, industry watchers have long noted that newspapers lost a significant chunk of ad revenue to Craigslist and other online classified listings.
Hmm. I wonder if they ever considered suing Craigslist for destroying the classified advertising business for local newspapers? That used to be a hefty percentage of revenue.
The key phrase stated by the Charleston Gazette is "fairly compete". Having a dog in this hunt, there will likely be many other websites and publishers who will join in this fight because they feel that they are not treated fairly or can compete for the highest paying and best quality ads in the market place.