New class action lawsuit claims Google virtually controls every part of digital advertising chain

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In addition to the three antitrust lawsuits brought against Google by the Justice Department and state attorneys general, several private publishers also filed suits against Google in December over its advertising and search practices.

John Bussian, a First Amendment lawyer who also handles predatory pricing problems for the newspaper industry, says these latest suits hold special relevance to publishers of America's Newspapers members.  Bussian also serves as a member of the America's Newspapers Legal Affairs and Lobbying Committee.

"Two of the new suits  filed by private publishers, seeking damages over and above the relief sought by the U.S. Department of Justice and the attorneys general in several states, bear close watching," Bussian said.  "One in particular claims Google virtually controls every part of the digital advertising chain, and that publisher is ready to prove how that makes it impossible to compete."

Sweepstakes Today is one of the companies that is a party to one of those new class action lawsuits.  Through its lawsuit, Sweepstakes Today said it is seeking to "remedy harm to digital publishers that make available and sell space on their website (or applications) to advertisers."

The suit says: "That harm is the direct result of Google’s efforts to expand its occupation and control of the online advertising market to the detriment of publishers, with which it competes to sell ad space. While it is most often thought of as a search engine, through aggressive expansion Google now owns at least 75 different consumer-facing products, many of which are used to serve digital ads. It is, by all accounts, a significant competitor for the sale of digital ad space. One product alone (YouTube) accounts for 20% of all display advertisements sold through the digital ad tech stack."

The suit argues that Google "has illegally exploited the opportunities for competitive interference made possible by its control over the various firms that connect publishers and advertisers, to benefit its own properties and harm rival publishers."

The other lawsuit was filed by Genius Media Group, The Nation and The Progressive.  In this case, the plaintiffs argue that "their ability and incentive to create internet content is being threatened by Google — a titan of the internet — whose U.S. advertising-related revenues have exploded, approaching nearly $135 billion in 2019, while publisher revenues have plummeted."

The suit charges: "The unlawful anticompetitive conduct at the heart of this case occurs in the display advertising marketplace, where publishers sell advertising space through real-time auctions. Through its campaign of anticompetitive conduct, Google has achieved and maintained a monopoly or near-monopoly in that marketplace by erecting a toll bridge between publishers and advertisers and charging an unlawfully high price for passage. Specifically, Google’s Ad Server — the software or code that publishers use to make critical decisions about advertising content — imposes anticompetitive rules and conduct that artificially warp the channels through which publishers sell their ad placement inventory."

The environment faced by local newspapers

Heidi Wright, COO and publisher of The Bulletin, EO Media Group, in Salem, Oregon, said the current situation is not sustainable for either Google or the local news industry. Wright, who serves on the America's Newspapers board of directors, said: "Google’s revenue model relies on the original content produced by our newsrooms. That’s what creates the audience advertisers are now paying Google to reach, instead of doing business directly with newspapers. If our newsrooms go away, original (credible) content goes away and Google’s revenue stream dries up."

She said, "We still have the expense of producing the content, but no way to effectively compete for the digital revenue generated off of that content. We need to be paid for what we produce, preferably through a revenue-share agreement, or have the opportunity to negotiate as an industry through the Safe Harbor bill currently being considered in Congress."

The earlier antitrust cases filed against Google

In a Dec. 17 article, Vox looked at the differences between the three antitrust cases filed by the Justice Department and the state attorneys general:

  • The suit filed by the attorneys general from 35 states "alleges that Google used three forms of anti-competitive conduct to keep its search and search ad monopolies. Those include deals with competitors like Apple to keep it as a default search engine, using its dominant search ad marketing tool to thwart competitors in its marketplace, and disadvantaging search results for rivals who operate more specialized search platforms like those for travel or restaurants."
  • The suit filed by a group of 10 Republican state attorneys general alleges anti-competitive practices related to its ad technology. This suit, led by Texas, "alleges that Google engaged in a wide variety of anti-competitive behavior to create and maintain its monopoly power in digital ad markets and keep out competitors. It also alleges that Google and Facebook illegally agreed not to compete with each other. "
  • The federal lawsuit filed in October by the Justice Department and 11 states alleges "that the company used its search dominance to preserve its other monopolies, including advertising. The suit also claimed that Google was paying some companies and blocking out others to maintain its lead over competitors. Google pays Apple billions of dollars a year, for example, to make its search engine the default in the Safari web browser."

Read more from Vox

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