Publishing company Gannett filed a lawsuit against Google and Alphabet, alleging that its advertising monopoly is having adverse effects on local journalism.
- Gannet is the owner of more than 200 local newspapers, in addition to USA Today.
- On Tuesday, it filed a lawsuit against the tech company, alleging that the lack of competition in advertising has allowed the company to “depress” advertising revenue amid record profits.
- Gannet believes Alphabet qualifies as an illegal monopoly that must be challenged and seeks damages against the tech company, Forbes reports.
- Google Ads VP Dan Taylor countered the claim in a statement to Forbes, saying Gannet’s claims are wrong and that the company’s advertising policies are fair.
Why It’s Important
The lawsuit comes amid the local journalism industry facing a widespread collapse in the face of digital media and its growing popularity. According to Gannet CEO Mike Reed, 86% of Americans get their news from digital media, but traditional media has yet to gain a foothold in the online market.
The result has been a 57% decline in newsroom employees since 2004, a 52% decline in journalism salaries, and more than 2,200 newspapers have closed since 2005. A 2022 study from Northwestern University’s Medill School of Journalism found that two local newspapers stop publishing every week.
With subscriptions and ad revenue declining, Gannett believes part of the blame ought to be laid on Google, with 86% of advertising dollars flowing through online tech giants.
“The move online should have created enormous opportunities for publishers. Digital advertising is now a $200 billion business—nearly an eight-fold increase since 2009. Yet news publishers’ advertising revenue has significantly declined. Google’s practices have real-world implications that depress not only revenue but also force the reduction and footprint of local news at a time when it’s needed most,” says Reed.
“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,” says Taylor.