US news chain Gannett sues Google, alleges online ad monopoly

Gannett, the largest newspaper chain in the United States and publisher of USA Today, has sued Google, accusing it of trying to corner the market for online advertising by monopolising ad technology.

In a complaint filed in Manhattan federal court on Tuesday, Gannett, which owns more than 200 daily newspapers, said Google’s control over tools for buying and selling online ads forces publishers to sell more cheap ad space to the Alphabet Inc unit.

Gannett said this leaves Google with “exorbitant monopoly profits”, and “dramatically less revenue” for publishers and its ad technology rivals.

“Digital advertising is the lifeblood of the online economy,” Gannett Chief Executive Mike Reed said in an opinion published in USA Today. “Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”

“The core of the case and our position is that Google abuses its control over the ad server monopoly to make it increasingly difficult for rival exchanges to run competitive auctions,” Reed wrote.

Gannett said it wants “very substantial”, actual, punitive and triple damages.

“These claims are simply wrong,” Dan Taylor, vice president of Google Ads, said in a written statement. “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. 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.”

The lawsuit adds to legal pressure on Mountain View, California-based Alphabet, already in the crosshairs of regulators on two continents.

On Wednesday, the European Union brought a similar lawsuit and said Google might have to sell some of its ad technology.

The unprecedented decision to push for such a breakup marks a significant escalation by Brussels in its crackdown on Silicon Valley digital giants and follows a similar move by US authorities seeking to bust Google’s alleged monopoly on the online ad ecosystem.

Five months earlier, the United States Department of Justice brought its own case against Google, now joined by 17 US states. Another group of states led by Texas is also suing.

In 2022, Google generated $224.5bn of advertising revenue, accounting for nearly 80 percent of Alphabet’s overall revenue and a major driver of Alphabet’s overall $60bn profit.

Advertising lets Google offer many services for free, including email, Android and much of its YouTube video platform.

Google’s first-quarter ad revenue was $54.5bn, little changed from a year earlier.

Like many newspaper publishers, McLean, Virginia-based Gannett has struggled with falling ad revenue as more Americans, estimated at 86 percent, get news online.

Gannett said digital advertising is a $200bn business, up nearly eightfold since 2009, but newspaper ad revenue fell nearly 70 percent over that time. Print circulation at Gannett-owned newspapers fell nearly 20 percent in 2020 and 2021, the company said.

The case is Gannett Co v Google LLC et al, US District Court, Southern District of New York, No. 23-05177.