Gannett, the American publishing giant that owns more than 200 daily newspapers nationwide, has filed a federal lawsuit against Google and its parent company Alphabet alleging that they, in effect, hold a monopoly in violation of the law over the sale of advertising with their advertising technology that is used by businesses to buy and sell ad space. This is known as Google Ads. The suit was filed in the U.S. District Court for the Southern District of New York and seeks unspecified damages.
Whenever you see small ads posted around the various pages of a website, it is a safe bet that they are powered by Google and you can even see the Google Ads logo. Google Ad Words is the company’s internal system for selling ad space on the results pages of Google searches. A system of bidding determines the price and number of hits an advertiser can get for a post before it is taken down, as well as how high up the ad will appear on the list of results. These bids are based on “keywords” such as “plumber” or “computer” and a geographical location.
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But Google also found a way to reverse market this service by placing such ads on the websites belonging to other businesses. This is where the company has gotten into trouble and has been accused of engaging in monopolistic practices.
Gannett CEO Mike Reed commented on the lawsuit Tuesday in a statement that was published in USA Today, which is owned by Gannett.
The suit, said Reed, is intended to “restore fair competition in a digital advertising marketplace that Google has demolished.”
“Digital advertising is the lifeblood of the online economy,” he added. “Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”
“The core of the case and our position is that Google abuses its control over the ad server monopoly to make it increasingly difficult for rival exchanges to run competitive auctions,” Reed added.
Dan Taylor, vice president of Google Ads responded to the suit in a written statement saying, “These claims are simply wrong. Publishers have many options to choose from when it comes to using advertising technology to monetize – in fact, Gannett uses dozens of competing ad services, including Google Ad Manager. And when publishers choose to use Google tools, they keep the vast majority of revenue. We’ll show the court how our advertising products benefit publishers and help them fund their content online.”
Google is also under investigation by the EU for possible monopolistic practices in its ad services.
