Small Wisconsin Newspapers Sue Google and Facebook Alleging Antitrust Violations

From a story on by Bruce Vielmetti headlined “Chain of small Wisconsin newspapers sues Google, Facebook, alleging antitrust violations”:

Two dozen small Wisconsin newspapers have sued Google and Facebook, claiming the firms’ grip on digital advertising threatens the publications’ existence and violates federal antitrust law.

Their 40-page federal lawsuit recaps the historical role of a free press in America, the decline of the newspaper industry and technical aspects of how it says Google controls the sales, purchase and placement of digital advertising….

“Google’s dominance of the digital advertising marketplace threatens the extinction of local news journalism across the country,” financial damage to publishers “and a profoundly negative effect on American democracy and civic life,” the suit states.

It was among about a dozen similar complaints filed by newspaper publishers in other states, said Michael J. Fuller Jr., an attorney with the law firm leading the effort.

Fuller said the team of plaintiffs’ lawyers hopes to follow a model it established suing pharmaceutical companies on behalf of local governments devastated by the opioid crisis, and that the many suits will be consolidated before a single federal judge and later attract participation of much larger newspaper publishers, like Gannett, which owns the Milwaukee Journal Sentinel and more than 200 other papers.

The lawsuit seeks to have Google’s practices declared unlawful and stopped, as well as unspecified triple and punitive damages and restitution.

As advertising shifted online to search and social media, newspaper revenue — then staffing — declined. Many papers have closed or become mere shells of their former selves. Many have turned their focus to attracting paid online subscribers or becoming nonprofits supported by wealthy benefactors or foundations.

But even increased online subscription revenue isn’t replacing the revenue lost due to declining digital advertising, according to the lawsuit.

The suit’s claims are based on findings of U.S. congressional committees’ antitrust investigations, and follow similar actions against Google and Facebook from the Federal Trade Commission, the U.S. Department of Justice and more than 40 state attorneys general, including Wisconsin’s.

The Wisconsin papers, like the Tomahawk Leader, Antigo Times and Kewaskum Statesman, tell “the stories of their people, places, struggles and joys,” according to the suit, are locally operated and often the primary source of community news and commentary in their communities.

The owner, Multi Media Channels, based in Waupaca, a subsidiary of Brown County Publishing Co. Inc., also operates 17 news websites in connection with their printed papers….

The owner of eight West Virginia newspapers, HD Media, was the first local newspaper group to sue Google and Facebook under antitrust law, in late January.

“These companies are more powerful than Standard Oil in its heyday, so no one wants to be the first to take them on,” owner Doug Reynolds told the Wall Street Journal. “We felt the political and legal climate have moved in our favor and are ready to go ahead.”

Multi Media Channels also raises a common law claim of unjust enrichment against Google.

“The reduction in revenues to newspapers across the country, including Plaintiff, were directly caused by Defendants’ conduct as set forth herein and went directly into Google’s coffers,” the suit states.

Newspaper advertising revenue has declined from $49 billion in 2006 to $16.5 billion in 2017. Job losses followed. Staffing of 71,000 in 2008 fell to 35,000 in 2019, and is projected to decline another 11% by 2029.

In 2019, 7,800 media industry employees were laid off

“A robust local newsroom requires the financial freedom to support in-depth, sometimes years-long reporting, as well as the ability to hire and retain journalists with expertise….

The suit says since 2004, nearly 1,800 U.S. newspapers have closed or merged, leaving about 200 counties with no newspaper.

As diverse as Google has become — nine of its products, from YouTube to Gmail to Android, each have more than a billion users — it still gets more than 83% of its revenue from digital ads, according to the suit.

“Google maintains its monopoly power through its ownership and control of every aspect of the digital advertising pipeline, including running the leading ad exchange … and using it to give priority to its own products and services,” the suit states.

“In this electronically traded market, Google is pitcher, batter and umpire, all at the same time.”

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