A US judge has ruled that Google must face a class-action lawsuit brought by advertisers who allege it monopolizes the ad exchange market.
However, some antitrust claims made by advertisers have been rejected, particularly those focused on ad-buying tools.
The allegations. Advertisers claim that Google monopolizes the ad exchange market, leading to higher advertising prices for advertisers and limiting their access to cheaper alternatives.
decision U.S. District Judge Kevin Castel made the decision to strike out some claims while allowing others to proceed. Explaining his reasoning, he said:
“Advertisers have not plausibly alleged antitrust standing in the markets for ad buying tools used by large advertisers, but they do plausibly allege antitrust standing with respect to the injuries they allegedly suffered from anticompetitive practices in the ad exchange market and the small business market.buying tools for advertisers”.
Next steps for Gannett. Judge Castel ruled that Gannett, the largest U.S. newspaper chain and publisher of USA Today, has the option of pursuing a separate case to establish that Google fraudulently concealed the anticompetitive effects of certain technology.
What did Gannett say? Gannett CEO Mike Reed released a statement explaining the impact Google’s alleged illegal practices have had on news publishers:
“News publishers depend on digital advertising revenue to provide timely, cutting-edge reporting and essential content communities rely on, but Google’s practices have had negative implications that not only depress revenue, but also force the reduction and the footprint of local news. Without free and fair competition for digital advertising space, publishers cannot invest in their newsrooms.”
What did Google say? Dan Taylor, vice president of Google Ads, has denied the allegations.
“These claims are simply wrong. Publishers have many choices when it comes to using ad technology to monetize; in fact, Gannett uses dozens of competing ad services, including Google Ad Manager. And when publishers choose to use the tools of Google, the vast majority of revenue is retained. We will show the court how our ad products benefit publishers and help them fund their online content.”
Why we care: This is the latest in a series of lawsuits in which Google has been accused of violating antitrust laws. The outcome of these cases could force the search engine to implement major changes such as divesting its advertising business, which could lead to greater transparency, more campaign control for advertisers and better innovation, which could also mean the creation of new ads tools.
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Deeper Dive: you can read Full statement from Gannett here.
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