Calhoun Times, others are suing Google, Facebook
♦ The lawsuit cites U.S. House committee findings of an agreement to monopolize the digital advertising market.
Times-Journal Inc., the company that publishes the Calhoun Times, has filed a lawsuit against Google and Facebook stating that the tech giants have violated federal antitrust and monopoly laws.
Citing a 2020 U.S. House of Representatives Judiciary Committee report concerning competition in digital markets, the lawsuit contends an agreement between the two companies to monopolize the market has had “a profound effect upon our country’s free and diverse press, particularly the newspaper industry.”
“Google monopolizes the market to such extent that it threatens the extinction of local newspapers across the country,” the complaint filed in U.S. District Court stated. “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.”
Times-Journal Inc. also publishes the Marietta Daily Journal, Rome News-Tribune and Polk Standard-Journal alongside a group of newspapers primarily located in north Georgia.
The attorney generals in more than 40 states have also filed lawsuits against Google and Facebook, the filing states.
The primary focus of the suit is a deal between the two companies codenamed “Jedi Blue” in which Facebook agreed to not offer advertisers an opportunity to bid for prominent placement on its pages but use a Google ad server. In return, Google agreed to give Facebook preferential treatment.
“Google and Facebook, archrivals in the digital advertising market, conspired to further their worldwide dominance of the digital advertising market in a secret agreement codenamed ‘Jedi Blue,”’ the filing stated. “The two archrivals, who are sometimes referenced as operating a duopoly in the market, unlawfully conspired to manipulate online auctions which generate digital advertising revenue.”
That agreement, the lawsuit states, is just one of the many ways smaller media companies have been harmed by the tech giants’ actions.
The lawsuit joins at least 15 more filed by media companies around the country, according to a Law.com article. Those lawsuits also accuse Google and Facebook of monopolizing the digital advertising market to the detriment of multiple smaller local news companies.
According to the U.S. House Judiciary Committee report titled “Stacking the Tech: Has Google Harmed Competition in Online Advertising?” newspaper ad revenue dropped from $49 billion in 2006 to $16.5 billion in 2017.
At the same time, Google’s ad revenue has increased by approximately the same measure.
As a result the existence of the newspaper industry is threatened, the filing states.
Nearly 60% of newspaper jobs disappeared — approximately 30,000 according to the Bureau of Labor Statistics — between 1990 and 2016.
“And almost 20% of all newspapers have closed in the past 15 years, and countless others have become shells — or ‘ghosts’ — of themselves, according to the recent report by the University of North Carolina,” the filing states.
“There is a clear correlation between layoffs and buyouts in the newspaper industry with the growth in market share for the duopoly — Google and Facebook,” the complaint states.
The lawsuit states the companies’ family of products, including Facebook Blue, Instagram, Messenger, and WhatsApp have “harmed the quality and availability of journalism.”