HD Media Group Lawsuit Underscores Potential for Extinction Level Event for Local News
Following a federal antitrust lawsuit and multiple cases from coalitions of state attorneys general, HD Media Group, a West Virginia news publisher, has filed another antitrust suit against Google and Facebook, the first private action brought by a news publisher against the tech giants. The suit alleges that “Google and Facebook have monopolized the digital advertising market, thereby strangling a primary source of revenue for newspapers across the country.” And seeks, “all remedies afforded under the law.” HD Media Group’s managing partner Doug Reynolds says of the case, they “are fighting not only for the future of the press by the preservation of our democracy.”
Facebook and especially Google have up to now operated with impunity as they have dominated the online marketplace. extracting revenues the UK’s Competitive Markets Authority found was “consistent with the exploitation of market power.” A coalition of state attorneys general is taking aim at Google’s decision to eliminate third-party cookies on its Chrome browser, alleging “Google’s decision to shut down third-party cookies on Chrome increases information asymmetries between its exchange and other exchanges.” The suit goes on to charge that “[b]y reducing revenue potential for publishers, Google reduces publishers’ incentives and resources to produce content.”
Google’s own study in 2019 found eliminating third-party cookies would slash news publishers’ ad revenue by an average of 62%. That would be an extinction level event for most news outlets. We’ve already seen 2,100 newspapers disappear since 2004 and this suit looks to hold Google and Facebook accountable as local news outlets revenue diminishes.
The following is a statement from Laura Bassett, former Senior Politics Reporter for HuffPost who was laid off in January 2019, and co-founder of the Save Journalism Project:
We applaud HD Media’s lawsuit against Google and Facebook. Their actions to rig prices and Google’s planned elimination of third-party cookies threatens to destroy the local news business. We have watched local news vanish before our eyes and Google and Facebook’s stranglehold on the digital ad market is a big reason. Without urgent antitrust enforcement, local news is facing extinction.