Updated Dec 7, 2021 - Economy & Business

Scoop: Over 200 papers quietly sue Big Tech

Illustration of Facebook and Google app about to be deleted.
Illustration: Allie Carl/Axios

Newspapers all over the country have been quietly filing antitrust lawsuits against Google and Facebook for the past year, alleging the two firms monopolized the digital ad market for revenue that would otherwise go to local news. 

Why it matters: What started as a small-town effort to take a stand against Big Tech has turned into a national movement, with over 200 newspapers involved across dozens of states.

  • "The intellectual framework for this developed over the last 3-4 years," said Doug Reynolds, managing partner of HD Media, a holding company that owns several West Virginia newspapers, including the Charleston Gazette-Mail.
  • Reynolds, along with a group of lawyers, filed the first newspaper lawsuit of this kind in January in West Virginia.

Catch up quick: As a part of the first lawsuit, Reynolds worked with a coalition of lawyers that has agreed to represent newspapers all over the country looking to file similar lawsuits.

  • The lawyers include experts in antitrust litigation and lawyers with a personal interest in newspapers from Farrell and Fuller, Fitzsimmons Law Firm, Robbins Geller Rudman & Dowd LLP and Herman Jones LLP.
  • The lawsuits are being funded via contingencies, which means the lawyers involved only get paid if and when the newspapers win settlements.

By the numbers: To-date, the group has been retained by over 30 newspaper ownership groups (list) on behalf of over 200 publications to file lawsuits.

  • Of those, antitrust complaints have officially been filed by 17 different ownership groups representing roughly 150 newspapers.
  • The News Media Alliance, a trade group that represents newspapers, has not been involved in the litigation, but has been monitoring the lawsuits.
  • “We fully support this litigation,” News Media Alliance general counsel Danielle Coffey said in a statement.

The goal of the litigation is "to recover past damages to newspapers" caused by Big Tech companies, says Clayton Fitzsimmons, one of the lawyers representing the newspapers.

  • The other is to "establish a new system going forward in which newspapers aren't just competitive again, but can thrive," he said, referencing laws like Australia's that force tech firms to pay publishers for their content.

Between the lines: "Past damages" in lawsuits like these will vary by paper.

  • If the lawsuits are successful, the papers could be entitled to “treble damages,” settlements that are three times the actual damages that are proven to have occurred, said Paul Farrell Jr., a West Virginia lawyer who successfully took on some of the country’s biggest drug companies in opioid lawsuits in 2018.
  • Farrell was inspired to work on Reynolds' first case in West Virginia, in part because of the Pulitzer Prize-winning journalism of the opioid crisis done by his hometown paper, the Charleston Gazette-Mail.

The big picture: The lawsuits were filed after the House Judiciary Committee published its major digital competition report last October, which included a section on newspapers. 

  • Lawmakers have expressed keen interest in understanding how Google and Facebook's dominance affects the newspapers industry.
  • The Justice Department, along with several state attorneys general, sued Google for violating antitrust laws. Facebook is facing a similar antitrust lawsuit from state attorneys general and the Federal Trade Commission.

What to watch: All of the lawsuits were consolidated by a judicial panel over the summer in the Southern District of New York.

  • The News Media Alliance filed a declaration to have the cases consolidated there earlier this year, with the hope that the attorney general there would be more sympathetic to the newspaper lawsuits.
  • The lawsuits were able to be consolidated in New York because of a similar lawsuit that was filed by Associated Newspapers, parent to The Daily Mail, against Google in New York in April.

What's next: There are different ways for the court to handle tackling these lawsuits, says Fitzsimmons. They could select some as bellwethers, test cases for all the individuals claims, or could send some cases back to the states they were filed to be tried.

  • For now, the consolidated cases are still pending.
  • Facebook didn‘t to comment. Google said, “These claims are just wrong. 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. We are one of the world's leading financial supporters of journalism and have provided billions of dollars to support quality journalism in the digital age."

Go deeper: Full list of newspaper groups and newspapers that filed complaints and/or retained legal services to file an antitrust complaint in the near future.

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