Antitrust legal actions against Google and Facebook spread to 200-plus newspapers

Some 200 newspapers are engaged in legal actions claiming that Google and Facebook exercise Godzilla-like dominance of digital advertising. Photo (cc) 2009 by Dr Zito.

A lawsuit filed by newspapers against Google and Facebook that claims the two tech giants violated antitrust laws is gaining momentum. Sara Fischer and Kristal Dixon of Axios report that more than 200 papers across the country have joined the effort, which is aimed at forcing Google and Facebook to compensate them for what they say are monopolistic practices that denied them advertising revenue.

I don’t see any New England newspapers on this list. But the papers that are involved in the lawsuits in some way represent about 30 different owners in dozens of states, according to Fischer and Dixon. About 150 papers owned by 17 different groups have actually filed suit so far.

What’s interesting about this is that it has nothing to do with the usual complaint about Google and Facebook — that they repurpose journalism from newspapers, and that the newspapers ought to be compensated. By contrast, the current lawsuits are aimed at practices that the plaintiffs claim are clearly illegal.

The Axios story doesn’t get into the weeds. But I did earlier this year shortly after the first lawsuit was filed by HD Media, a small chain based in West Virginia. Essentially, the argument is twofold:

• Google is violating antitrust law by controlling every aspect of digital advertising. Paul Farrell, a lawyer for HD Media, put it this way in an interview with the trade magazine Editor & Publisher: “They have completely monetized and commercialized their search engine, and what they’ve also done is create an advertising marketplace in which they represent and profit from the buyers and the sellers, while also owning the exchange.”
• Facebook is complicit because, according to a lawsuit filed by several state attorneys general, Google and Facebook are colluding through an agreement that Google has code-named Jedi Blue. The AGs contend that Google provides Facebook with special considerations so that Facebook won’t set up a competing ad network.

The two companies have denied any wrongdoing. But if the case against them is correct, then Google is profiting from a perfect closed environment: It holds a near-monopoly on search and the programmatic advertising system through which most ads show up on news websites. And it has an agreement with Facebook aimed at staving off competition.

“The intellectual framework for this developed over the last three to four years,”  Doug Reynolds, managing partner of HD Media, told Axios.

The lawsuit also comes at a time when the federal government is beginning to rethink antitrust law. A generation ago, a philosophy developed by Robert Bork — yes, that Robert Bork, and yes, everything really does go back to Richard Nixon — held that there can be no antitrust violations unless consumers are harmed in the form of higher prices.

President Joe Biden’s administration, by contrast, has been embracing a more progressive, older form of antitrust law holding that monopolies can be punished or even broken up if they “undermine economic fairness and American democracy,” as The New Yorker put it.

The newspapers’ lawsuit against Google and Facebook is grounded in the Biden version of antitrust — Google and Facebook are charged with leveraging their monopoly to harm newspapers economically while at the same time hurting democracy, which depends on reliable journalism.

Become a member of Media Nation for just $5 a month.