Wisconsin newspapers file antitrust lawsuit towards Google, Fb

Two dozen small Wisconsin newspapers have sued Google and Facebook, claiming that the companies’ influence over digital advertising threatens the existence of the publications and violates federal antitrust law.

Her 40-page federal lawsuit sums up the historic role of a free press in America, the decline of the newspaper industry, and technical aspects of Google’s control over the sale, purchase, and placement of digital advertising.

“Google’s dominance in the digital advertising market threatens the extinction of local news journalism across the country,” financial damage to publishers “and a profoundly negative impact on American democracy and civil life,” the lawsuit said.

It was among about a dozen similar complaints filed by newspaper publishers in other states, said Michael J. Fuller Jr., an attorney for the law firm who led the effort.

Fuller said the plaintiffs’ legal team hope to follow a model it has established to sue pharmaceutical companies on behalf of local governments devastated by the opioid crisis, and that the many lawsuits will be consolidated before a single federal judge, and later the participation of a much larger one Newspaper would attract publishers like Gannett, who owns the Milwaukee Journal Sentinel and more than 200 other newspapers.

The lawsuit seeks to determine and terminate Google’s practices as unlawful and unspecified triple and punishable damages and refunds.

As online advertising shifted to search engines and social media, newspaper revenues – and then staff – fell. Many papers have closed or become mere shells of their former selves. Many have focused on attracting paid online subscribers or becoming nonprofits backed by wealthy benefactors or foundations.

But even higher income from online subscriptions does not replace the income that is lost due to declining digital advertising, according to the lawsuit.

Google and Facebook have previously denied having committed unlawful anti-competitive practices.

Government also claims antitrust law

The lawsuit’s allegations are based on results of antitrust investigations by the U.S. congressional committees and follow similar actions by the Federal Trade Commission, the U.S. Department of Justice, and more than 40 attorneys general, including Wisconsins, against Google and Facebook.

Wisconsin newspapers, such as the Tomahawk Leader, the Antigo Times, and the Kewaskum Statesman, “tell the stories of their people, places, struggles, and joys,” depending on the lawsuit, are operated locally, and are often the primary source of community news and commentary in their newspaper communities.

The owner, Waupaca-based Multi Media Channels, a subsidiary of Brown County Publishing Co. Inc., also operates 17 news websites related to their printed papers.

CEO Patrick Wood did not immediately respond to an interview request on Tuesday.

The owner of eight West Virginia newspapers, HD Media, became the first local newspaper group to sued Google and Facebook in late January.

“These companies are more powerful than Standard Oil in their prime, so no one wants to be the first to acquire them,” owner Doug Reynolds told the Wall Street Journal. “We felt that the political and legal climate had developed in our favor and that we are ready to move on.”

The Wisconsin lawsuit alleges two violations of antitrust law: Google has “illegally exercised the monopoly power of the market for digital advertising (both search engine advertising and display advertising)” and has unlawfully partnered with Facebook to engage in anti-competitive behavior.

Multimedia channels also make a generally valid claim to unjust enrichment against Google.

“The decline in newspaper revenue across the country, including the plaintiff, was directly caused by the defendant’s conduct as set out here and went straight to Google’s coffers,” the lawsuit said.

Industry in sharp decline

Newspaper advertising revenue decreased from $ 49 billion in 2006 to $ 16.5 billion in 2017. Job losses followed. The workforce decreased from 71,000 in 2008 to 35,000 in 2019 and is expected to decrease by a further 11% by 2029.

In 2019, 7,800 media industry employees were laid off

“A robust local newsroom requires the financial freedom to support thorough, sometimes years-long, reporting, as well as the ability to hire and retain journalists with specialist knowledge

in basically local issues, such as reporting on the state government, “the lawsuit said.

According to the lawsuit, nearly 1,800 US newspapers have closed or merged since 2004, leaving about 200 counties without a newspaper.

As diverse as Google has become – nine of its products, from YouTube to Gmail to Android, each have more than a billion users – more than 83% of its sales are still generated with digital ads, according to the lawsuit.

“Google retains its monopoly power through ownership and control of all aspects of the digital advertising pipeline, including running the leading advertising exchange … and using it to prioritize its own products and services,” the lawsuit said.

“In this electronically traded market, Google is pitcher, batter and referee at the same time.”

Contact Bruce Vielmetti at (414) 224-2187 or [email protected]. Follow him on Twitter at @ProofHearsay.

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