In the Fall of 2020, as local newspapers and national online outlets like BuzzFeed were increasingly laying off reporters or even shutting their doors because of collapsing digital advertising revenues, the Washington Monthly published a package of stories on what to do about the problem. In that package, Phillip Longman, a Monthly senior editor and policy director of the Open Markets Institute, argued that Google’s monopolization of the digital advertising market was the heart of the problem and that the solution was for the federal government to bring an antitrust enforcement action against the company.
It was the first time any journalist had made that argument (amazing when you consider Google was literally stealing the source of their livelihoods). Many dismissed the idea as hopelessly naive. But in January 2023, the Justice Department charged Google with illegally monopolizing the digital ad tech market. Yesterday, following a three-week trial last September, a federal judge ruled that the government was right.
In a landmark ruling, Juge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia found that Google has illegally monopolized several portions of the online advertising market. The decision, along with another decision from last August where Google was found to have unlawfully monopolized the online search market, stands to curtail the immense power of Alphabet, the $1.8 trillion company behind Google.
That power has been damaging journalism, whose advertising revenue decline has spurred layoffs across the industry. Judge Brinkema directly acknowledged the damage in her opinion, writing that Google’s anti-competitive actions “substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web.”
As the trial proceeds to the remedies phase, which could see a potential breakup of the giant’s advertising businesses, news publishers could receive a long overdue lifeline through increased competition and higher compensation for advertising placements next to their content.
The ruling was not a total victory for the plaintiffs. While Brinkema held that Google violated the Sherman Antitrust Act by illegally tying its ad exchange and server market together, she rejected claims that the corporation had monopolized the advertising purchasing tool market, declining to find that Google’s 2008 acquisition of DoubleClick was anti-competitive. Those findings could prove to be a challenge for plaintiffs if they seek a breakup of the company’s advertising businesses in the upcoming remedies phase of the proceedings.
Still, even a partially rejuvenated marketplace could pay big dividends for embattled publishers.
At the start of the century, the burgeoning digital advertising industry infused new life into the news media ecosystem. As Longman wrote last year, that influx of new revenue enabled startups whose innovation revolutionized the industry for the modern era. But, as Longman explains, that spark was snuffed out as Google tightened its grip over digital advertising marketplaces, and print revenue began drying up. Publishers have increasingly been left at the mercy of the tech giant, whose share of the ad-selling market has reached nearly 90 percent, according to filings from the Department of Justice, which brought the case along with several states.
Google achieved that dominance through acquisitions over the last 20 years, which coincided with a historically permissive antitrust enforcement environment. The corporation has used that market power, in tandem with its surveillance advertising capabilities, to starve news outlets of revenue. The Mountain View, California-based corporation currently pockets well over 30 percent of the revenue from publisher ad sales, enabling the company to generate over $30 billion in revenue from the sector in 2023, about a 10th of Alphabet’s annual revenue. As witnesses representing several news organizations testified at trial, the exorbitant rate and the devaluation of their ad space through surveillance methods that allow the corporation to target their high-value readers on cheaper sites siphoned billions from publishers.
That revenue loss has proved disastrous for journalism. According to an analysis by the Press Gazette, U.S. and United Kingdom news organizations shed nearly 4,000 jobs in 2024, following an even more brutal environment in 2023 that saw over 8,000 positions eliminated. Those losses have, not coincidentally, coincided with a growing information crisis and increasing political polarization. Returning even a fraction of the revenue Google has extracted from content publishers would help staunch the industry’s bleeding and improve our information environment.
However, that relief could still be years away. On top of what may be a lengthy remedies process, Google has already indicated its intent to appeal the decision. As the Center for Journalism & Liberty within the Open Markets Institute laid out in a seminal report, Democracy, Journalism, and Monopoly, at the end of 2023, reining in Google’s advertising monopoly is only one of many necessary measures to stabilize and revitalize the journalism business.
Policymakers should build on whichever remedies Brinkema imposes by cracking down on invasive data practices that allow advertisers to undercut publishers by targeting their audiences in cheaper venues and by crafting stricter non-discrimination and must-carry laws that prevent search platforms like Google and social media platforms like Facebook and X from systematically suppressing links to news publishers’ content. Furthermore, the U.S. should follow the lead of lawmakers in Australia, Canada, and many other nations that now require major platforms to directly negotiate with digital publishers over the significant value that news content adds to their sites.
The post Court Ruling Against Google Ad-Tech Monopoly Is a Victory for Journalism appeared first on Washington Monthly.
Continue reading...