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Google and Facebook sued by local news publisher over antitrust concerns

For monopolizing the advertising space.
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A media company that owns several newspapers in North Georgia has filed an antitrust lawsuit against Facebook and Google. The media company claims that the Big Tech companies have engaged in antitrust and monopolistic practices to a level that “threatens the extinction of local newspapers across the country.”

Times Journal Inc., a publisher that owns Walker County Messenger, Catoosa County News and a few other newspapers in northern Georgia, filed an antitrust lawsuit against Facebook and Google in the US District Court for the Northern District of Georgia.

We obtained a copy of the lawsuit for you here.

The lawsuit referenced 2020 findings by the House Judiciary Committee from an investigation into digital advertising. The Committee found out that Facebook and Google’s “anticompetitive and monopolistic practices have had a profound effect upon our country’s free and diverse press, particularly the newspaper industry.”

“There is no longer a competitive market in which newspapers can fairly compete for online advertising revenue. Google has vertically integrated itself, through hundreds of mergers and acquisitions, to enable dominion over all sellers, buyers and middlemen in the marketplace. It has absorbed the market internally and consumed most of the revenue,” the complaint stated.

“Google’s unlawful anticompetitive conduct is directly stripping newspapers across the country, including plaintiff’s, of their primary revenue source. The freedom of the press is not at stake; the press itself is at stake.”

The suit cites a 2018 deal between Facebook and Google, called the Jedi Blue, as one of the ways the companies have harmed traditional media.

“The quid pro quo was as follows — Facebook would largely forego its foray into header bidding and would instead bid through Google’s ad server. In exchange, Google agreed to give Facebook preferential treatment in its auctions,” the lawsuit said. “This agreement closed a growing threat to Google’s primacy and further cemented its stranglehold on the marketplace.”

Google and Facebook have not publicly commented on the lawsuit.

The lawsuit also blames the two Big Tech companies for directly contributing to the major decrease in revenue across the industry.

“Since 2006, newspaper advertising revenue, which is critical for funding high-quality journalism, fell by over 50%. Newspaper advertising has declined from $49 billion in 2006 to $16.5 billion in 2017. As a result of these falling revenues, the existence of the newspaper industry is threatened,” the lawsuit said. “Nearly 30,000 newspaper jobs disappeared — a 60% industry wide decline — from 1990 to 2016, according to the Bureau of Labor Statistics.”

The suit continues to argue that loss of revenues has in turn contributed to the increase in the public’s distrust of the media.

“Despite significant growth in online traffic among the nation’s leading newspapers, print and digital newsrooms across the country are laying off reporters or folding altogether. As a result, communities throughout the United States are increasingly going without sources for local news,” the complaint said. “The emergence of platform gatekeepers — and the market power wielded by Google and Facebook — has contributed to the decline of trustworthy sources of news.”

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