A group of 30 companies that own more than 200 local newspapers have formed a coalition against Google and Facebook in a newly consolidated antitrust lawsuit, alleging the tech giants have manipulated the digital ad market to the detriment of local news.
The Charleston Gazette-Mail, a small West Virginia newspaper, was the first to file suit in January 2021. Doug Reynolds, managing partner at the holding company that owns several West Virginia newspapers, gave an interview to the Wall Street Journal, comparing Google and Facebook to last century’s robber barons.
“These companies are more powerful than Standard Oil in its heyday, so no one wants to be the first to take them on,” Reynolds said. “We felt the political and legal climate have moved in our favor and are ready to go ahead.”
In May, the News Media Alliance successfully filed a declaration to consolidate the newspapers’ cases and they were consolidated by a judicial panel shortly after that in the Southern District of New York.
Clayton Fitzsimmons, one of the attorneys representing the plaintiffs, told Axios their objective is “to recover past damages to newspapers” and
to “establish a new system going forward in which newspapers aren’t just competitive again, but can thrive.”
The newspapers’ collective suit echoes many of the same allegations of the antitrust suit filed against Google by Texas Attorney General Ken Paxton and nine other state attorneys general. They make a strong case for the myriad of ways that Google and Facebook have had a damaging impact on the publishing industry.
The recently unredacted complaint references internal Google documents which show that AMP pages brought 40% less revenue to publishers. The documents show that Google acknowledged that its fees are very high but the company can demand them because of its market power. One Google employee explained that “smaller publishers don’t have alternative revenue sources,” when commenting on the lack competing ad networks. The suit also alleges that Facebook and Google colluded to manipulate header bidding auctions, among many other anticompetitive practices.
Many of the small newspapers among the 200+ included in the consolidated antitrust lawsuit are using WordPress, such as the Brown County Democrat, The Delaware Gazette, Wisconsin Rapids City Times, Waupaca County News, and the Fairborn Daily Herald — to name just a few. They are doing important work, keeping their elected officials accountable and their communities informed.
As the slow death of the American newspaper forced more publications to go online-only, digital advertising was the only lifeline for these outlets. The effects of collusion and manipulation of the digital ad market fall heavy on the already beleaguered local news industry.
The consolidated cases are currently pending and could go a number of different ways. Fitzsimmons said the court could select some as bellwethers, opt to test all cases for the individual claims, or send them back to the states of origination to be tried.