Antitrust lawsuit targets Facebook and Google

West virginia newspaper group launches suit

A newspaper group in West Virginia is suing Facebook Inc. and Google LLC under u.s. antitrust statutes, alleging the internet juggernauts have unfairly deprived it of advertising revenue.

hd Media Co., owner of the Pulitzer Prize-winning Charleston Gazette-mail and the herald-dispatch in huntington, among others, filed its case Jan. 29 in federal court seeking trial by jury and unspecified damages.

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

The social network and search engine together account for more than half of all u.s. digital ad spending, with a forecast in October by emarketer showing Google at 29.8 per cent, Facebook at 23.5 per cent and Amazon.com Inc. with 10.2 per cent of the market.

The rise of the internet over the past 25 years has decimated the newspaper industry by shuttering papers and triggering thousands of job losses. Most outlets have been unable to replace lost print ad revenue with online fees or digital ad income.

However, this case appears to mark the first time a publisher has attempted to use antitrust law to strike back directly, with hd Media alleging there’s a secret conspiracy called Jedi blue between the internet Goliaths to carve up business between them and avoid direct competition in the digital ad space auctions that determine ad revenue.

The case echoes one brought in december by 10 republican state attorneys general.

Google shot back last month that the case by Texas Attorney General Ken Paxton is based on myths and misinformation. Google

THE FREEDOM OF THE PRESS IS NOT AT STAKE; THE PRESS ITSELF IS AT STAKE.

economic Policy director Adam Cohen said its Open bidding process has instead improved participation and ad revenue for publishers.

“AG Paxton inaccurately claims that we manipulate the Open bidding auction in Facebook Audience Network’s favour,” Cohen wrote. "We absolutely don’t. FAN must make the highest bid to win a given impression. If another eligible network or exchange bids higher, they win the auction.”