Largest US newspaper chain Gannett sues Google, complains about online ad monopoly

Gannett, the largest newspaper chain in the US and publisher of USA Today, on Tuesday (June 20) sued Google saying that the search giant was attempting to corner the market for online advertising by monopolising ad technology. Gannett filed the complaint in Manhattan federal court in New York.

Gannett, which runs more than 200 daily newspapers, says that Google's control over tools for buying and selling online ads forces publishers to sell more cheap ad space to the Alphabet Inc unit.

The publishing giant has thus alleged that Google reaps "exorbitant monopoly profits" while leaving publishers with "dramatically less revenue".

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"Digital advertising is the lifeblood of the online economy," Gannett Chief Executive Mike Reed said in an opinion published in USA Today. "Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms."

Watch | EU pushing to break Google's monopoly

Dan Taylor, vice president of Google Ads replied, "These claims are simply wrong." In a statement quoted by AFP, Taylor said that publishers have many options for advertising tech and that "they keep the vast majority of revenue" when they use Google.

Gannett said it wants "very substantial" actual, punitive and triple damages.

Google is already in the crosshairs of regulators on two continents. The lawsuit from Gannett adds to the pressure on the tech giant.

Earlier this month, the European Union said Google might have to sell some of its ad technology. The EU has brought a lawsuit.

Five months ago, the US Department of Justice brought its case against Google. Seventeen US states have now joined the case. Another group of states led by Texas is also suing.

Huge revenues

Google recorded USD 224.5 billion in advertising revenue in 2022. This accounted for nearly 80 per centof Alphabet's overall revenue and it was a major driver of Alphabet's overall $60 billion profit.

Advertising lets Google offer many services for free, including email, Android and much of its YouTube video platform.

Google's first-quarter ad revenue was $54.5 billion, little changed from a year earlier.

Also Read | After Apple, Google to shift some smartphone production to India, diversify its supply chain away from China

Newspaper publishers are struggling with falling ad revenues as more and more people are getting news online.

According to Gannett, digital advertising is a USD 200 billion business. The value has increased eightfold since 2009. During the same period, the newspaper ad revenue has fallen nearly 70 per cent.

The company said print circulation at its newspapers fell nearly 20 per centin 2020 and 2021, and that it has shut more than 170 publications since 2019 when it merged with GateHouse Media.

(With inputs from agencies)

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