America's Largest Newspaper Publisher Sues Google Over Alleged Advertising Monopoly
The largest newspaper publisher in the U.S. is taking on one of the world’s largest tech corporations in court. USA Today’s parent company Gannett filed a lawsuit against Google and its parent company Alphabet Inc. on Tuesday over alleged anti-competition tactics in digital advertising.
Gannett, which owns some of the nation’s biggest and longest-running newspapers, alleges in the filing that Google is rigging the system that’s used for ad sales on publisher websites. Part of Gannett’s advertising relies on real-time ad sales that are conducted in the milliseconds it takes for one of the newspaper company’s web pages to load. Those real-time sales occur through a publisher ad server and an ad exchange, and according to the lawsuit, Google owns 90% of the publisher ad server market and 60% of the ad exchange market. With that large footprint in the digital advertising marketplace, Gannett alleges that Google is able to manipulate the real-time process of selling ads.
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“With its control over publisher ad serving, Google controls how publishers solicit and evaluate real-time bids for their inventory. Meanwhile, by operating the dominant exchange and dominant buy-side software, Google is the most powerful buyer of that inventory,” the lawsuit reads “The mechanics of Google’s conduct have evolved over time, but the result has remained the same: Google manipulates the process of real-time bidding to exclude rival exchanges, underpay for publisher inventory, and ultimately reduce the quality and quantity of online news.”
The lawsuit claims that Google procured this alleged monopoly over several years. In 2007, Google acquired DoubleClick for $3.1 billion, which became the tech giant’s ad server and exchange, as well as AdMeld, an advertising platform, in 2011 for $400 million to bolster its own advertising infrastructure for publishers. As reported by The New York Times, former Google executive Timothy Armstrong called the DoubleClick acquisition “a total game changer” which helped the massive tech corporation become the advertising monolith it is today.
“These claims are simply wrong. Publishers have many options to choose from when it comes to using advertising technology to monetize – in fact, Gannett uses dozens of competing ad services, including Google Ad Manager,” Google Ads vice president Dan Taylor told Gizmodo in an email. “And when publishers choose to use Google tools, they keep the vast majority of revenue. We’ll show the court how our advertising products benefit publishers and help them fund their content online.”
Gannett’s lawsuit is not the only time Google has been in the antitrust crosshairs with regard to its advertising practices. Last week, Google was hit with a lawsuit from the European Union, which may require the company to sell off some of its ad-tech services. Google is also the focus of two similar lawsuits from the Department of Justice and a coalition of Attorneys Generals from 10 states. The Justice Department alleges in its lawsuit, filed in January, that it “corrupted legitimate competition in the ad tech industry by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers and brokers, to facilitate digital advertising.”
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