Google's web ad choke-hold prompts lawsuit from largest publisher in US

Gannett, the publisher of over 200 daily newspapers, has sued Google and Alphabet in federal court, over the allegation that Google is monopolizing the online ad marketplace with its tools and services.

Filed on Tuesday in Manhattan, Gannett accuses Google of anti-competitive behavior, with the ingrained control of the market harming online publications. "Google has carried out a sophisticated, anticompetitive, and desceptive scheme for well over a decade," the filing reads.

Writing in an opinion piece for USA Today, Gannett CEO and Chairman Mike Reed explained Gannett's reasoning for the lawsuit, and it centered around revenues stemming from online advertising. Or more specifically, how little publications actually receive.

Pointing out the flourishing online ad industry becoming a $200 billion business, eight times the size than it was in 2009. However, Reid insists publisher's advertising revenue has "significantly declined" due to Google's practices.

"Google, as middleman, has monopolized the markets for important software and technology products that publishers and advertisers use to buy and sell ad space." Reid also says Google controls 90% of the "publisher ad servers" market for offering ad space for sale, 60% of the "ad exchanges" market that handles advertisers bidding for space, and that 60% of all ad buyers stem from Google in the first place.

It is asserted by Reid that the "obviously painful result is that Google unfairly controls and manipulates all sides of each online advertising transaction."

"In 2022, Google made upward of $30 billion in revenue from the sale of ad space on publishers' websites," said Reid. "That was six times the digital advertising revenue of all U.S. news publications, combined. In a functioning market, no one would expect the middleman to make more than the content creator."

The lawsuit details "more than a dozen significantly anticompetitivbe and deceptive acts by Google," with the core of the case being Google's abuse over the ad server monopoly to make it difficult for rival exchanges to operate.

"Digital advertising is the lifeblood of the online economy. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms and content, and readers cannot get trusted news at low cost or for free," the CEO concludes.

The lawsuit is the latest action being taken against Google over its ad market policies and activities.

In January, the U.S. Department of Justice and eight states sued Google over allegations of abusive "monopoly power" over its advertising tools. Again, complaints are made that website publishers cannot use competing services due to Google's dominance.

In March, publishers in the U.K. filed a $4.2 billion lawsuit against Google, which itself followed a lawsuit against Google in November 2022, for $16.9 billion.

In June, the European Commission recommended breaking up Google following a two-year investigation into its ad business.