Commentary

How Strong Is A Local Publisher's Antitrust Suit Against Google, Facebook?

The publisher of several local newspapers, including the Charleston Gazette-Mail and Herald Dispatch in West Virginia last week sued Google and Facebook for violating U.S. antitrust law. The suit pits a publishing David versus Silicon Valley Goliaths with greater financial resources to mount a vigorous defense for years.
HD Media, which also publishes five other titles, claims the suit is the first antitrust complaint brought by a private company against Google and Facebook. The suit cites much of the same evidence presented in a similar antitrust case filed by 10 states in December. Its outcome is potentially consequential for every publisher with a grievance against the two companies, which are  control about 60% of the U.S. digital ad market.

That lawsuit claims Google rigged online ad auctions to the detriment of publishers, and colluded with Facebook to undermine publisher efforts to adopt header bidding. The automated auction technology lets publishers offer their inventory to multiple advertisers simultaneously.
Google last month denied those claims in a detailed rebuttal by Adam Cohen, the company's director of economic policy. Cohen said Google created an alternative to header bidding in order to solve problems associated with the technology.
Aside from its argument about Google and Facebook's alleged violations of antitrust law, HD Media makes an emotional appeal about the importance of local newspapers in their watchdog role. The Charleston Gazette-Mail in 2017 won a Pulitzer Prize for its investigative reports on the opioid crisis in West Virginia.
HD Media seeks unspecified damages that will be determined at trial, though the company also wants to see broader change in the digital media marketplace.
“What needs to be fixed is the digital ad revenue model that siphons revenues away from newspapers and puts it directly into the coffers of Google. That model has to change,” Lee Wolverton, HD Media's vice president, news and executive editor, said in an interview with Editor & Publisher, which first reported on the lawsuit.

The publisher faces a daunting challenge in taking on the tech giants, which also face ongoing investigations from the Federal Trade Commission and Department of Justice that may lead to more lawsuits and fines. Even then, it's not certain that those cases will help publishers to regain lost ad revenue.

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