Google Exploits Publishers as 'Input Suppliers,' Antitrust Class Action Alleges

Google’s “anticompetitive scheme” is “starving the free press” and siphoning “billions of readers and billions of dollars” from publishers, while extracting and publishing their content on Google and diverting “readers and ad revenue,” alleged a class action (docket 1:23-cv-03677) Monday by Helena World Chronicle (HWC) in U.S. District Court for the District of Columbia.

The scheme is part of an “unlawful strategy to attract, trap, and maximize users within a 'walled garden’ that entrenches Google’s monopoly as the world’s largest search engine,” said the complaint. Google has “coerced” publishers into a “Hobson’s choice: surrender their content or disappear from search and lose the single largest source of referral traffic and associated revenue,” it said.

Plaintiff HWC owns Helena World and Monroe County Argus, Arkansas-based newspapers available in print and digital versions; the online publications get referrals from Google Search, the complaint said. Helena World online has averaged 1,530 visitors per month, with 402 referred from Google Search; the Monroe County Argus also receives visitors referred from Search, it said.

HWC’s original works were “scraped and reproduced for the purpose of training Google’s [generative AI] products including Bard and [Search Generative Experience],” the complaint said. Bard “plagiarized an article from Helena World,” it added. HWC’s original works are scraped and reproduced as inputs by Google’s GAI search product “on a daily basis” and are plagiarized regularly as AI-generated news summaries and extracts, it said.

Key to Google’s scheme is its “structure and dominance as a digital platform” that serves as a gatekeeper to online markets “by leveraging key barriers to entry: scale, network effects, and switching costs,” said the complaint. Google’s unique power rests on its “monopoly over general search services,” and its 90% ownership of the market monetized through its advertising, it said. Google “abuses” its dominance in the search market “to lessen competition in associated and dependent lines of commerce -- including digital news and reference publishing,” it said.

Google “maintains its search monopoly and abuses its dominance” through tying arrangements that lock in and exploit publishers as input suppliers, foreclosure contracts that block rival search engines, and mergers and acquisitions that allow it to “enlarge its dominant position,” the complaint alleged.

In “unlawful tying arrangements,” Google “misappropriates” publishers’ content and republishes it on its platform, the complaint said. Its AI-based Bard chatbot provides answers to users' questions and its Search Generative Experience responds to their searches by directing them to Google’s summary of what other websites say, it said. Google “has repeatedly abused its dominance to force Publishers to supply the inputs for this tying arrangement: their content,” said the complaint. Though Google said changes to Search would boost publishers’ referral traffic and revenue, “the truth was the opposite,” the complaint said, quoting a Google engineer saying “direct answers reduce search referral traffic.”

Google “traps” users through “exclusionary agreements” with mobile device makers Apple and Samsung and other browser developers in “foreclosure contracts” that secure Google Search as the default search engine “on the vast majority of mobile devices and desktop computers,” the complaint alleged. Google pays Apple 36% of its search revenue via the Safari browser, and it has a similar agreement with Samsung for its devices running Google’s Android operating system, it said. Adding its products running Chrome, and Google has nearly 90% market share in search, the complaint said.

Google “maximizes” its “anticompetitive scheme” via more than 260 mergers and acquisitions that have allowed it to dominate digital display advertising, digital content, mobile operating systems and AI, the complaint said. It cited Google’s DoubleClick buy in 2008, enabling it to “dominate digital display advertising” on publishers’ websites. Its purchase of Android cemented Google as the default search engine on mobile phones, and its YouTube buy in 2006 gave it “the largest trove of video content on the internet and allowed it to engage in self-preferencing of YouTube” over other publishers’ content, the complaint said. Google's DeepMind acquisition in 2014 and merger this year of DeepMind with the Google Brain AI lab is “enabling it to protect its search monopoly from potentially disruptive GAI technology,” it said.

The defendant has created a “zero-click world” where users stay in its ecosystem and are “siphoned away” from publishers, the complaint said. Since 80% of Google searches are for news and reference content, “billions of consumers are now getting their news from Google,” it said. Its estimated audience of 69.6 billion information consumers per month makes Google “far and away the largest publisher of online news and reference content,” the complaint said.

But Google doesn’t produce the content; publishers do, the complaint said. Publishers are “forced to compete on an unlevel playing field against their own products,” and the result is “staggering harm to competition, to consumers, to labor and to a democratic free press,” it said. Publishers’ costs rose and their revenue fell from about $50 billion in 2005 to $20 billion in 2022, the complaint said. Since 2005, the U.S. has lost more than a fourth of its newspapers, 2,500, and is expected to lose a third by 2025, it said.

Plaintiff HWC can’t afford to sacrifice the referral traffic it receives from Google, but “it also cannot afford to sustain competitive injury under Google’s search monopoly and abuse of dominance,” the complaint said. Antitrust laws were designed “to prevent a monopolist, or a structure achieved in part, through merger and acquisition, from harming competition by abusing its monopoly or dominance,” it said.

HWC asserts violations of the Sherman and Clayton acts “to seek classwide monetary and injunctive relief to restore and ensure competition for digital news and reference publishing, protect Publishers, and set up guardrails to preserve a free marketplace of ideas in the new era of artificial intelligence,” the complaint said. Guardrails could include requiring Google to revise practices so that publishers wanting to opt out of SGE would still appear in Google searches; to obtain prior consent from publishers whose website data is used to train GAI; and to make payment terms more favorable to publishers, it said.

The plaintiff also seeks statutory and other damages, pre- and post-judgment interest and costs of a court-approved notice program to give “immediate notification” to the class, said the complaint. In June, Gannett sued Google for antitrust violations involving its digital advertising business in federal court in Manhattan (see 2306220028). Google didn't comment Tuesday.