Google must face some advertisers’ antitrust claims, says U.S. judge

Google must face a proposed class action lawsuit from advertisers claiming that it monopolizes the ad exchange market, a U.S. judge has ruled.

However, some antitrust claims made by advertisers, particularly those centred on ad-buying tools, have been dismissed.

The allegations. The advertisers claim that Google monopolizes the ad exchange market, leading to higher ad prices for advertisers and limiting their access to more budget-friendly alternatives.

Ruling. The decision to strike out some claims while allowing others to proceed was made by U.S. District Judge Kevin Castel. Explaining his reasoning, he said:

• “The advertisers have not plausibly alleged antitrust standing in the markets for ad-buying tools used by large advertisers, but they plausibly allege antitrust standing as to injuries they purportedly suffered from anti-competitive practices in the ad-exchange market and the market for small advertisers’ buying tools.”

Next steps for Gannett. Judge Castel stated that Gannett, the largest U.S. newspaper chain and publisher of USA Today, has the option to pursue a separate case to establish that Google fraudulently concealed the anticompetitive effects of certain technology.

What has Gannett said? Gannett’s CEO Mike Reed released a statement explaining the impact Google’s alleged illegal practices have allegedly been having on news publishers:

• “News publishers depend on digital ad revenue to provide timely, cutting-edge reporting and essential content communities rely on, yet Google’s practices have had negative implications that depress not only revenue, but also force the reduction and footprint of local news. Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”

What has Google said? Dan Taylor, vice president of Google Ads, has denied the allegations.

• “These claims are simply wrong. Publishers have many options to choose from when it comes to using advertising technology to monetize – in fact, Gannett uses dozens of competing ad services, including Google Ad Manager. And when publishers choose to use Google tools, they keep the vast majority of revenue. We’ll show the court how our advertising products benefit publishers and help them fund their content online”

Why we care: This is the latest in a string of lawsuits in which Google has been accused of violating antitrust laws. The outcome of these cases could force the search engine to implement big changes such as the divestment of its ad business, which could potentially lead to increased transparency, more campaign control for advertisers and better innovation – which could also possibly mean the creation of new ad tools.

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Deeper dive: You can read Gannett’s full statement here.