New Tennessee Case Alleges “Archrivals” Google And Facebook Secretly Conspired To Dominate The Worldwide Digital Advertising Market
02/24/2022It is widely known that the evolution to online news has been challenging for print media sources, with some estimating that as much as half of all print revenue disappearing and one fifth of U.S. newspapers closing their doors since 2007. In recent years, the House and Senate have focused on tech giants and the role these companies play in the lives of Americans and in a variety of markets, including digital advertising. Following a long line of congressional hearings and committee investigations, a number of antitrust complaints have been filed by the Federal Trade Commission, the Department of Justice, and state Attorneys General across the country against major Big Tech companies like Facebook (now known as Meta Platforms, Inc.) and Google. While some have been consolidated into multidistrict litigation, new cases continue to be filed by private plaintiffs.
On February 7, 2022, a complaint was filed in the Western District of Tennessee alleging that Google has monopolized the digital advertising market with the assistance of Facebook, thereby “strangling a primary source of revenue for newspapers across the country” and putting them out of business. This complaint is the latest suit brought against Big Tech against a backdrop of mounting antitrust scrutiny.
Plaintiff Savannah Publishing Co. publishes ten magazines and a Tennessee newspaper The Courier. Its complaint asserts the importance of a free and diverse press to American society. It alleges that these “platform gatekeepers” and the market power they wield has not only put local newspapers at a competitive disadvantage, but also has hastened the decline of public trust in news sources. Specifically, the complaint alleges two causes of action: (1) Google unlawfully exercised monopoly power of the digital advertising market in violation of Section 2 of the Sherman Act; and (2) Google and Facebook, in a per se violation of Section 1 of the Sherman Act, unlawfully conspired to engage in anticompetitive conduct.
The complaint defines the digital advertising market as encompassing both “search advertising,” in which publishers bid for their digital ads to appear alongside search results, and “display advertising,” where publishers purchase ad space on websites and mobile apps, either directly or through an exchange. The complaint alleges that Google has monopolized this market in part by “vertically integrat[ing] itself, through hundreds of mergers and acquisitions, to enable dominion over all sellers, buyers, and middlemen in the marketplace,” which it says allows Google to share superior trading information and speed with its own intermediaries and steer buy and sell orders to its own exchange and website.
The complaint further alleges that Google’s monopoly power is supported by Facebook, with whom it says Google conspired to manipulate online auctions that generate digital advertising revenue as part of a secret agreement codenamed “Jedi Blue.” This agreement, the complaint alleges, was based on a quid pro quo where Facebook would largely forgo “header bidding,” a competitive bidding innovation that Google saw as a threat, and would instead bid through Google’s ad server, in exchange for preferential treatment. As a result of these actions, the complaint alleges that other publishers were prevented from getting the highest bid for their content, and thus from fairly competing for online advertising revenue.
Defendants are scheduled to respond to the complaint by February 28, 2021.