More than 200 newspapers are suing Facebook and Google, alleging that the tech titans have unfairly manipulated the advertising market, siphoning away their revenue and crippling their businesses.
The lawsuits are being filed on behalf of some 30 different companies that publish over 200 separate smaller newspapers across the country, and include a trove of local publications in Texas, West Virginia, Mississippi, Ohio and other states.
The suits, which were recently consolidated in New York state, come as the Justice Department, along with several state attorneys general, sued Google for violating antitrust laws. Facebook is facing a similar antitrust lawsuit from state attorneys general and the Federal Trade Commission.
Last year, Texas Attorney General Ken Paxton filed an antitrust complaint against the companies. Details of that suit have recently come to light, alleging collusion between the two tech giants to squash the competition and keep them on top of the digital ad market.
The local newspapers make similar antitrust arguments, and are looking to “recover past damages to newspapers,” demanding payouts commensurate with the money that’s been sucked out of the industry.
A full list of plaintiffs, who are working with a unified collection of lawyers and law firms, was published by Axios here.
If the newspapers win, they could be entitled to a windfall, with settlements that are three times the actual damages. Although figures have not been not divulged, Clayton Fitzsimmons, one of the newspapers’ lawyers, told Axios that the goal of the litigation 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.”
Fitzsimmons referenced Australia’s new laws that force tech firms to pay publishers for their content.
“These companies are more powerful than Standard Oil in its heyday, so no one wants to be the first to take them on,” said Doug Reynolds, managing partner of HD Media, one of the companies suing. In a recent interview with the Wall Street Journal, Reynolds added: “We felt the political and legal climate have moved in our favor and are ready to go ahead.”
The consolidated lawsuits are currently pending.
Google and Facebook did not immediately respond to requests for comment.
Google told Axios, “These claims are just wrong. The online advertising space is crowded and competitive, our ad tech fees are lower than reported industry averages, and publishers keep the vast majority of revenue earned when using our products. We are one of the world’s leading financial supporters of journalism and have provided billions of dollars to support quality journalism in the digital age.”
Anger among newspaper publishers has been brewing for some time. A Pew Research study from last year revealed that the industry’s ad revenues dropped by a staggering 62 percent over the past decade, falling from $37.8 billion in 2008 to $14.3 billion in 2018. Meanwhile, newsroom employment halved, while circulation sizes similarly receded — with weekday papers falling from a total circulation of more than 50 million in 2007 to about 28 million by 2018.
Meanwhile, Google and Facebook and similar tech giants have been making a killing, thanks to ad revenue. Last year, Google’s parent firm Alphabet made $183 billion, of which, more than 80 percent came from its advertising business, according to the company’s 2020 annual report.