Media Company Takes Brave Step in Saving the Newspaper Industry in Filing Suit Against Facebook and Google
Steven T. Lowe
HD Media Company, a West Virginia newspaper company, filed a federal antitrust lawsuit against Google and Facebook on Friday, January 29, 2021, as a result of the decline in the company’s ability to effectively monetize its content. The complaint charges the two tech giants with monopolizing the digital advertising market and decimating local newspapers nationwide while profiting at the expense of local news.
The 42-page complaint alleges that Facebook and Google violated antitrust laws by agreeing not to compete with each other to further their dominance of the online advertising market while stacking the deck against the newspaper industry and local news outlets. This agreement was referred to as “Jedi Blue.” In order to further their agenda, Facebook bids through Google’s ad server in exchange for preferential treatment from Google in its auction. HD Media urges that the decrease in advertising revenue over the years is attributable to the unlawful “Jedi Blue” agreement.
Between the years 2006 and 2017, newspaper advertising has dropped 66%, and between 1990 and 2016, approximately 30,000 newspaper jobs disappeared. Declines like this result in hardships for the newspaper industry and threaten its entire existence. The complaint lays out a clear correlation between these declines in the newspaper industry and the growth of Facebook and Google in the digital advertising market share. Especially noted was the impact, and eventual erasing, of local news outlets due to revenue dips.
HD Media is requesting that Facebook and Google be permanently enjoined from continuing any anticompetitive conduct as a result of their violations of the Sherman Act and a West Virginia statute. The complaint states that this suit is not fighting for freedom of the press, as it is the press itself that is at stake. The modern marketplace is dominated by Google, resulting in harm to the plaintiff’s commercial interests and the obliteration of local news sources, thus eroding key facets of the journalistic industry central to American democracy and civil life.
In a separate antitrust suit raised by Texas Attorney General Ken Paxton, Google is accused of monopolizing the display advertising market, thus violating Section 2 of the Sherman Act. Google has rejected the idea that it dominates the online advertising landscape, going so far as to call it a myth.
HD Media Company is represented by Paul T. Farrell of Farrell Law, Paul J. Geller of Robbins Geller Rudman & Dowd LLP, John Herman and Serina Vash of Herman Jones LLP, and Mark A. Colantonio and Clayton J. Fitzsimmons of Fitzsimmons Law Firm.
Counsel for Google and Facebook was not immediately available.
The suit is HD Media Company LLC vs. Google and Facebook, case number 3:21-cv-00077, in the U.S. District Court for the Southern District of West Virginia.
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