U.S. publishers see hope for reining in Big Tech with litigation

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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Last week, judges in one of several U.S. lawsuits unsealed an amended complaint filed by the Texas attorney general and 17 other state attorneys general against Google, as reported by Reuters. In it, plaintiffs charge that Facebook and Google CEOs were aware of a formal advertising market deal between the two. 

The action is just the latest in the Wild West scenario that describes the multi-pronged approach to reining in digital platforms, finding relief for news publishers in the United States. But one INMA member we spoke to thinks this Wild West vibe might just be a good thing. 

The approach can be broken down into three categories:

  • Litigation.
  • Legislation.
  • Congressional inquiry. 

We will tackle litigation in this blog, following up with another post on the legislation/Congressional inquiry.

We must remember, our source cautioned, what’s happening today on these fronts can be very different from what was happening yesterday. 

Ad tech and search litigation are key to the negotiations between media and Big Tech in the United States.
Ad tech and search litigation are key to the negotiations between media and Big Tech in the United States.

At this point, litigation is based on Big Tech’s alleged behaviour in two arenas: Ad tech and search. 

Ad tech litigation

A judicial panel decided in early August to consolidate two ad tech cases: a news publishers’ suit plus another filed by the Texas attorney general to be heard in the Southern District Court of New York (SDNY) under Judge P. Kevin Castel.

Castel is also the judge in a similar suit, Associated Newspapers (parent to the Daily Mail) against Google. Associated Newspapers brought an antitrust suit against Google in April of 2021, but decided to forego the route followed by other publishers who are included in the SDNY consolidation. According to Reuters, the suit alleges “the search and advertising giant’s power over selling online ad space means newspapers see little of the revenue their content produces.”

The judicial decision is good news for petitioners, according to some in the news industry who hope the legal environment in New York will be more sympathetic to newspaper publishers than elsewhere, Axios said. The News Media Alliance (the Alliance) is a trade organisation representing roughly 2,000 news publications. Though not otherwise involved, it filed a declaration (Interested Party Response) urging the consolidation and move of the cases to that venue, even though, as one INMA member observed, the disparate plaintiffs may have disparate goals. What they do have in common, however, is the standard antitrust damages: treble remuneration for recovery of past damages. 

INMA’s source noted the consolidated case is unlikely to go to trial, explaining that what usually happens is Google will reach out to the leaders of the suits as well as the plaintiffs. There will be some massive damages and legal fees paid out, some fixes in interoperability and transparency — a negotiated settlement, but no break-up. He also said that, on the other hand, Big Tech has the deep pockets to outspend everybody and fight to the end.

Texas et al. v. Google, December 2020. Texas Attorney General Ken Paxton filed the first lawsuit to focus on Google’s dominance in ad tech, according to Vox. Paxton announced in a Twitter video, a few hours before filing the suit in December 2020, that “Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions in a tremendous violation of justice.”

That case argues that Google runs an illegal digital advertising monopoly and alleges, according to The Wall Street Journal, that Google and Facebook/Meta  are cartels that “colluded to rig digital ad markets through an agreement nicknamed ‘Jedi Blue.’” The standard of proof is lower for cartels than it is for monopolies in the United States, our source explained. 

Nine other state attorneys general signed onto the original complaint, Vox reported. The total now stands at 17. The suit argues that Google used monopoly power in ad tech to remove competition and overcharge businesses by self-preferencing. 

The court published an unredacted version in October 2021, and the suit — which alleged Google has engaged in “anticompetitive and deceptive conduct” and has entered into a price fixing and market allocation agreement with Facebook — was amended for the second time in December 2021. 

A Google spokesperson claimed the suit “is riddled with inaccuracies,” according to AdExchanger: “Just because Attorney General Paxton asserts something doesn’t make it true … . In reality, our advertising technologies help Web sites and apps fund their content and enable small businesses to reach customers around the world. There is vigorous competition in online advertising, which has reduced ad tech fees and expanded options for publishers and advertisers. We will strongly defend ourselves from his baseless claims in court.” 

HD Media et al., February 2021. Over the last year, about 30 U.S. newspaper groups in dozens of states, representing roughly 200 local titles, have filed antitrust lawsuits against Google and Meta/Facebook for monopolising the digital ad market “for revenue that would otherwise go to local news,” Axios reported.

West Virginia publisher Doug Reynolds, owner of HD Media, LLC, whose story was reported by The Wall Street Journal, brought the  initial suit against Google and Facebook in February 2021. “Newspapers have had to operate under strict antitrust regulations for decades,” Reynolds told the WSJ, arguing that the same standards have not been applied to the digital giants.

According to the Alliance as reported by the WSJ, it is the first case of its kind filed by a news outlet. Other publishers have subsequently joined Reynolds, and together, they are represented by a coalition of high-profile lawyers working on contingency (they will front the costs and not be paid unless they win the case).

While one of the goals of the lawsuits is to recover past damages caused by Big Tech, the other, according to the Axios article, is to “establish a new system going forward in which newspapers aren’t just competitive again, but can thrive.”

Search litigation

There are two cases dealing with Google Search: one brought by the Department of Justice (DOJ) and the other brought by state attorneys general. 

Justice Department, October 2020. In October, 2020, the Justice Department (DOJ) and 11 states filed suit against Google, according to Vox. In that case, Google is being sued over its multi-billion dollar payments to Apple to be the default search engine on Apple’s default browser, Safari. The DOJ says that’s anti-competitive behaviour. It is relevant to publishers because plaintiffs believe that they would have a better chance of being paid for their content if there were more competition browser environment, he explained. 

Colorado et al., December 2020. In a related case, Colorado led more than 30 other state attorneys general who want to be included in this suit over anti-competitive conduct to keep its search and search ad monopolies. That includes making “deals with competitors like Apple to keep it as a default search engine, using its dominant search ad marketing tool to thwart competitors in its marketplace, and disadvantaging search results for rivals who operate more specialised search platforms like those for travel or restaurants,” Vox wrote. Here is the redacted complaint.

And remember, the legal landscape can change at any time if new suits are filed, our source reminded us. They mentioned an investigation of Apple by the DOJ and a judicial ruling last week that the Federal Trade Commission’s (FTC) case against Facebook can proceed to discovery. Another source note a pending bill in Congress  (H.R.3460, S.1787) that could send the Texas case back to Texas where it started out.

And, they said, keep your eyes open for future suits over privacy and data collection.

About L. Carol Christopher

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