Newspapers sue Google and Facebook for monopolising the digital ad market

Over 30 ownership groups covering over 200 newspapers are suing Google and Facebook for monopolising the digital advertising market and siphoning revenue that would’ve gone to the journalism industry.

To understand the basis of these lawsuits, let’s put ourselves in the shoes of an advertiser. Before this, many advertisers were choosing to advertise in publications or newspapers, but now advertising on Google or Facebook is the norm as the reach is so big and more consistent.

These lawsuits are quite similar to the anti-trust suit made on Google last year. The U.S. government sued Google for being an advertising monopoly as well as alleged default search engine accusations.

The newspapers are arguing that Google and Facebook have done so much damage to the digital advertising market and should pay ‘treble damages’, which is three times the damages that have been proven.

Regardless of if the big tech giants did it or not, it’s widely known now that the newspaper industry is slowly dying. The newspaper industry’s ad revenue went down from USD 37.8 billion (~RM163 billion) in 2008 to USD 14.3 billion (~RM60 billion) in 2018. Meanwhile, Google made a whopping USD 183 billion (~RM773 billion) in 2020 alone, with 80% of that coming from advertising.

The downfall of the newspaper industry logically leads to the downfall of cutting-edge journalism. The lawsuit states: “Since 2006, newspaper advertising revenue, which is critical for funding high-quality journalism, fell by over 50%.”

A Google spokesperson responded to these claims with this statement:

“These claims are just wrong. The online advertising space is crowded and competitive, our ad tech fees are lower than reported industry averages, and publishers keep the vast majority of revenue earned when using our products. We are one of the world’s leading financial supporters of journalism and have provided billions of dollars to support quality journalism in the digital age.”

Right now, these consolidated cases are still pending, so we will have to see how the court handles these lawsuits.

Other than the anti-trust suit from last year, you can also find similar events from even earlier. In August 2020, the Australian Competition & Consumer Commission (ACCC) released legislation that requested Google and Facebook to give a fair share payment for news. A few months later, Google threatened to remove its search engine from Australia if the government forces them to pay for news, saying “It’s not a threat. It’s reality”. In February 2021, Facebook and Australia ‘refriended’ each other, lifted any remaining bans and settled on an agreement.

[ SOURCE, IMAGE SOURCE ]