Eagle files suit against Google, Facebook
The Butler Eagle has filed a lawsuit against Google and Facebook, joining a growing number of newspapers across the country that are suing the web giants for claims that the two companies are destroying publications by hoarding ad revenue.
The 150-year-old paper, officially called the Eagle Printing Company, filed the lawsuit in federal court April 19. The action cites a U.S. House Judiciary report that found Facebook and Google engaged in anticompetitive and monopolistic practices that have damaged the county's “free and diverse” press.
The newspaper is asking a judge to find the two companies' actions illegal under Sections 1 and 2 of the Sherman Act.
The Sherman Act is a 19th century antitrust act designed to keep companies and cartels from dominating commerce and reducing economic competition.
Ron Vodenichar, the paper's president and publisher, said, “We decided to join with many other publications in this lawsuit to try and put an end to the slaughter of local journalism and particularly to the family-owned newspapers that have loyally served their communities for more than a century.”
Vodenichar notes a loss of journalism in the area.
“The methods used by Facebook and Google have caused most of the old Western Pennsylvania newspapers to close or to sell to the big chain operations, which eventually leads to less community involvement and news deserts,” he said.
“When the community newspapers are gone, there will no longer be a source of local news for Google and Facebook to copy and steal, so communities both large and small will be without basic information. They need to be stopped now.”
Google responded to the suit in a statement, “These claims are baseless. The online advertising space is crowded and competitive, our ad tech fees are lower than reported industry averages and publishers keep the vast majority of revenue earned when using our products. Facebook is one of over 25 partners who participate in our Open Bidding program, which works to increase demand for publishers' ad space and help them earn more revenue.”
The lawsuit, nearly identical to a lawsuit made by HD Media Company, a West Virginia newspaper company, blames the two tech companies for a significant loss of ad revenue as a result of Google and Facebook monopolizing the market and denying a competitive market in which “newspapers can fairly compete for online advertising revenue.”
“Google and Facebook have unlawfully monopolized the digital advertising market. This has had a profound impact upon our country's free and diverse press, particularly the newspaper industry,” said Ray Conlon, one of the team of lawyers representing the newspaper.
According to Fitzsimmons Law firm, part of the HD Media lawsuit, as well as Editor & Publisher, an industry publication, publishers of 125 newspapers in 11 states have filed similar lawsuits targeting Google and Facebook.
The Eagle's suit warns that if left unchecked, Pennsylvania's citizens face a “news desert.” The suit notes that the company, which also operates the Cranberry Eagle, doesn't just report on local and community news. The company notes that it employs 88 full-time employees and 23 part-time workers “and is invested in the community” by promoting local charities and community needs in the newspaper.
In Western Pennsylvania, the paper claims to be one of only a handful of family-owned newspapers still operating, and it notes that the company is on its fifth generation of family ownership.
The suit also notes that the two websites for the newspaper compete with Google and Facebook in “relevant digital advertising markets.”
And within this sphere, the suit charges Google that absorbed the market “internally and consumed most of the revenue.”
The suit continues, “Google's unlawful anticompetitive conduct is directly stripping newspapers across the country, including plaintiff, of their primary revenue source.”
The suit alleges that Google and Facebook worked cooperatively to engage in “anticompetitive behavior” that is barred by the Sherman Act.
“The freedom of the press is not at stake; the press itself is at stake,” the suit claims.
While Google and Facebook may be competitors in the digital advertising market space, the suit claims that the two devised an international conspiracy code-named “Jedi Blue” to operate as a duopoly.
The Eagle is also asking a court to find that it be awarded damages and restitution in an amount to be determined at a requested jury trial.
