Daily Mail brings anti-monopoly lawsuit against Google - Press Gazette

Daily Mail sues Google over 'rigged' advertising system which 'punishes publishers'

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The Daily Mail has filed an anti-monopoly lawsuit against Google in the US, accusing the tech giant of “punishing publishers that do not submit to its practices” and effectively rigging ad auctions.

Mail parent company Associated Newspapers Ltd and its US subsidiary Mail Media Inc, which runs dailymail.com, has brought the claim against Google and its parent company Alphabet at the US District Court in New York.

The Mail group launched Mail Online in 2003, publishing at dailymail.co.uk, before expanding to the US in 2011 with dailymail.com where it is known simply as Daily Mail and operates out of New York City.

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Mail Online says it reaches over 225m unique visitors a month, with a third (75m) of those visitors coming from the US.

In court documents seen by Press Gazette, the Mail sets out that online advertising has continued to grow against a 70% drop in print ad revenues over the last decade, with print circulations down 40%.

The Daily Mail said: “News publishers do not see the growing ad spending because Google and its parent Alphabet unlawfully have acquired and maintain monopolies for the tools that publishers and advertisers use to buy and sell online ad space.

“Those tools include the software publishers use to sell their ad inventory, and the dominant exchange where millions of ad impressions are sold in auctions every day.

“Google controls the ‘shelf space’ on publishers’ pages where ads appear, and it exploits that control to defeat competition for that ad space.

“Among other tactics, Google makes it difficult for publishers to compare prices among exchanges; reduces the number of exchanges that can submit bids; and uses bids offered by rival exchanges to set its own bids — a de facto bid rigging scheme.

“Further, for years, Google has used its search rankings to punish publishers that do not submit to its practices.

“The lack of competition for publishers’ inventory depresses prices and reduces the amount and quality of news available to readers, but Google ends up ahead because it controls a growing share of the ad space that remains.”

Google has pushed back against the claims. A spokesperson told Press Gazette: “The Daily Mail’s claims are completely inaccurate.

“The use of our ad tech tools has no bearing on how a publisher’s website ranks in Google Search. More generally, we compete in a crowded and competitive ad tech space where publishers have and exercise multiple options.

“The Daily Mail itself authorizes dozens of ad tech companies to sell and manage their ad space, including Amazon, Verizon and more. We will defend ourselves against these meritless claims.”

The Daily Mail’s anti-competition lawsuit is the latest to hit the company in the US. The US Department of Justice and the attorney general of Texas brought similar claims last year.

Google described the US DoJ’s lawsuit as “deeply flawed” and the case brought by Texas – that it was using its power “to manipulate the market” and “destroy competition” – as “misleading”.

[Read more: Politicians running the world’s leading economies are planning to tame Facebook and Google]

Setting out its claims over 60 pages, the Daily Mail accused Google of picking “winners and losers” with each modification of its search algorithm, which it said is typically “made unannounced and with no transparency”.

The publisher says that Google has used its control over the ad-tech market, dominating both the buying and selling of digital display advertising, to “manipulate the process of real-time bidding” which has had the effect of reducing the “quality and quantity of online news”.

It claimed that “for years, Google substantially has eroded Daily Mail’s search traffic”, with a fall of 20% in US search traffic in 2017 and a further 40% in 2018. It said it was “punished” by Google in 2019 with a core algorithm update that “shut off Daily Mail’s search traffic”.

[Read more: The future of programmatic advertising: What brands and publishers need to know]

The Mail said this followed its attempts to push back against the dominance of Google’s own ad exchange service (a digital marketplace that hosts real-time auctions for ad slots) acquired when it took over Doubleclick in 2007.  It said a “Last Look” policy, which ran until 2019, enabled Google’s ad exchange to see the highest real-time bid placed by a rival exchange on an ad served by Google and outbid it, even if only by one penny.

This advantage had the effect of keeping prices down and causing “financial harm” to the Mail and other publishers, the publisher said.

It claimed in court documents that Google “traded on inside information and bought Daily Mail’s inventory on the cheap”.

“With its control over publisher ad serving, Google controls how publishers solicit and evaluate real-time bids for their inventory. Meanwhile, by operating the dominant exchange and dominant buy-side software, Google is the most powerful buyer of that inventory,” the Mail said.

“The mechanics of Google’s conduct have evolved over time, but the result has remained the same: Google manipulates the process of real-time bidding to exclude rival exchanges, underpay for publisher inventory, and ultimately reduce the quality and quantity of online news.”

The Mail said that since the beginning of 2021, the Daily Mail’s US search traffic has fallen by more than half to levels “not seen since the 2019 algorithm update”. It added: “In short, Google wields its monopoly search engine to entrench its ad-tech dominance.”

[Read more: Enter Sandbox: How Google is building an internet without cookies – and why publishers are concerned]

A Daily Mail spokesperson said: “This lawsuit is to hold Google to account for their continued anti-competitive behaviour including manipulation of ad auctions and news search results, bid rigging, algorithm bias and exploiting its market power to harm their advertising rivals.

“Despite increased criticism by regulators and governments around the world, Google’s ongoing behaviour clearly shows they are not prepared to change their conduct.

“DailyMail.com brings this antitrust action for compensation and for injunctive relief to restore competition in the monopolized markets and safeguard news content for readers.

“This includes, but isn’t limited to the elimination of forced tying of products, bid rigging and bias in news search results, while also providing transparency when they make changes to their algorithm.

“DailyMail.com is a world leader in digital news and is taking this necessary action to address Google’s harm to publishers and to protect freedom of speech.”

Daily Mail has asked for the issues to be tried by a jury.

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