BIG NEWS IN WEST VIRGINIA
Sometimes the biggest news comes from the least likely places. Last week, HD Media, the owner of the Pulitzer Prize-winning Charleston (W.Va.) Gazette-Mail, The (Huntington) Herald-Dispatch and a half-dozen weekly newspapers, filed an antitrust suit against Google and Facebook. The suit alleges the two giant companies conspired to dominate the digital advertising landscape. At a minimum, the suit lays out some serious damage inflicted on the newspaper industry. According to the complaint, since 2006, newspaper advertising revenue fell by over 50%. Newspaper advertising has declined from $49 billion in 2006 to $16.5 billion in 2017. Nearly 30,000 newspaper jobs disappeared—a 60% industrywide decline — from 1990 to 2016, according to the Bureau of Labor Statistics.
One intriguing aspect of the suit is the allegation that Google and Facebook actively entered into an agreement to rig the system. According to the complaint, the two archrivals Google and Facebook, entered a secret agreement codenamed “Jedi Blue.” Under the agreement, Facebook would largely forego its foray into header bidding and would instead bid through Google’s ad server. In exchange, Google agreed to give Facebook preferential treatment in its auctions. If that allegation is true, it would be a major piece of evidence, as it is often difficult to find direct evidence of collusion.
Doug Reynolds, HD’s Managing Partner has asked for every newspaper in America to join the suit. We know who Goliath is in this scenario. Let’s see how many Davids show up for the fight.