A West Virginia newspaper company has filed a federal antitrust lawsuit against Google and Facebook charging the internet giants with monopolizing the digital advertising market. This is believed to be the first lawsuit of its kind filed by a newspaper company against the tech giants for their monopolistic practices.
Owner of the Pulitzer Prize-winning Charleston (West Virginia) Gazette-Mail, The (Huntington) Herald-Dispatch and a half-dozen weekly newspapers, HD Media LLC filed a 42-page complaint in the United States District Court for the Southern District of West Virginia. HD Media claims Google has monopolized the digital advertising market to such an extent that Google has been enabled to extract a supracompetitive share of HD Media’s advertising revenues, harming the company’s ability to effectively monetize its content. The complaint also alleges that Google and Facebook violated antitrust laws by conspiring to further their worldwide dominance of the digital advertising market, entering into a secret agreement codenamed “Jedi Blue” to manipulate online auctions.
The complaint further alleges that Google has monopolized the digital advertising market to such an extent it threatens the extinction of local newspapers across the country. In the last two decades, almost 1,800 papers have either closed or merged, creating vast news deserts across the country. Since 2006, newspaper advertising revenue has fallen by more than 50%, from $49 billion to $16.5 billion in 2017. Nearly 30,000 newspaper jobs disappeared — a 60% industrywide decline — from 1990 to 2016.
The lost advertising revenues siphoned from the newspaper industry have gone directly into the coffers of Google and Facebook as a direct result of the monopoly power they exert over the digital advertising market, according to the complaint. Today, Google and Facebook have combined annual revenues of more than $200 billion. Together, Google and Facebook have acquired more than 300 companies over the past 20 years, gobbling up competitors, amassing greater control over the market and compelling the survivors to play by a set of rules that suffocates their ability to grow their businesses and threatens their existence.
“The freedom of the press is not at stake,” the suit says. “The press itself is at stake.” A free and diverse press is essential to a vibrant democracy. That is being threatened by Google and Facebook’s unlawful conduct, as alleged in the complaint.
“We invite every other newspaper in America to join this cause,” said Doug Reynolds, HD Media managing partner. “We are fighting not only for the future of the press but also the preservation of our democracy.”
HD Media is represented by Fitzsimmons Law Firm PLLC (Wheeling, W.Va.); Farrell & Fuller LLC (San Juan, Puerto Rico); Robbins Geller Rudman & Dowd LLP (Boca Raton, Fla.); and Herman Jones LLP (Atlanta).