Times-Journal Inc., a media company that publishes several North Georgia newspapers including the Catoosa County News and Walker County Messenger, is suing Google and Facebook.
The publisher claims the social media giants have violated federal antitrust and monopoly laws to an extent that "threatens the extinction of local newspapers across the country."
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The lawsuit, filed in the U.S. District Court for the Northern District of Georgia, references the findings of a 2020 U.S. House of Representatives Judiciary Committee antitrust investigation into the digital advertising market that determined Google and Facebook'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."
In addition to the Catoosa County News and Walker Messenger, Times-Journal Inc. publishes the Calhoun Times, Marietta Daily Journal, the Cherokee Tribune, the Cherokee Tribune & Ledger News and the Morgan County Citizen.
Google and Facebook have not yet responded publicly to the lawsuit, but Google Economic Policy Director Adam Cohen wrote a blog post in January addressing similar allegations made by Texas Attorney General Ken Paxton, who was involved in a 10-state lawsuit brought against Google last December for "anti-competitive conduct" in the online advertising industry.
In the post, Cohen argued that Google has worked to "do the right thing" to balance the concerns of publishers, advertisers and those who use the company's services.
"Our ad tech rivals and large partners may not always like every decision we make - we're never going to be able to please everybody. But that's hardly evidence of wrongdoing and certainly not a credible basis for an antitrust lawsuit," Cohen wrote.
The lawsuit argues that one of the ways Google and Facebook have harmed the press is through a 2018 deal known as "Jedi Blue" in which Facebook agreed not to challenge Google's advertising business in return for special treatment in Google's ad auctions.
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"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."
The Jedi Blue deal is not the only way the lawsuit said Google and Facebook caused damage to the media industry. It also alleged they were "directly" responsible for major revenue reductions industrywide.
"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% industrywide decline - from 1990 to 2016, according to the Bureau of Labor Statistics."
The reduction in revenues to newspapers across the country was "directly caused" by the companies' actions, the lawsuit said, and contributed to the rise in public distrust of 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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Contact Kelcey Caulder at email@example.com or 423-757-6327. Follow her on Twitter @kelceycaulder.