Google and Facebook are being targeted by over 200 newspapers for allegedly hogging all of the advertising revenue.
According to a report by Gizmodo, the newspaper companies are accusing the Big Tech players of "unfairly manipulating the advertising market," which has caused direct damage to their publications as a whole.
Thirty different companies are involved in the suit, which is being handled by a group of lawyers and law firms. Axios published a full list of the companies and the newspapers they own, and they're mostly small-market ones at first glance.
Because they're small-market papers, they really couldn't compete with Big Tech giants in terms of ad revenue.
In the lawsuit, the newspaper companies are arguing that both Google and Facebook (the latter now called Meta) are "monopolizing" digital advertising with allegedly illegitimate practices.
Furthermore, the companies are looking for financial settlements to "recover past damages to newspapers."
The lawsuit was filed in September. As per a report by GeekWire, it is blaming the Big Tech players for causing a massive decline in newspaper advertising revenue, an over 50% decrease since 2006, which the companies say is critical for funding their journalistic practices.
One of the companies suing Google and Facebook is HD Media. In an interview with The Wall Street Journal, company managing partner Doug Reynolds is comparing the tech giants' power to that of John D. Rockefeller's Standard Oil, which basically controlled 90 percent of the United States' oil refining business in the late 1800s.
Should the newspapers win, they might get something called "trebled damages." With this kind of victory, the paper companies will get paid three times the damages they manage to prove in court.
Just How Much Is Google And Facebook/Meta Earning From Ads?
The short answer is: a lot. And it's almost incomprehensible just how much money they're actually earning from advertising revenue alone each year.
The world's premium search engine alone is able to generate as much as $147 billion in revenue from the advertising business, reports CNBC. That comprises over 80% of what Alphabet, Google's parent company, earned last year ($183 billion) in total revenue.
Facebook/Meta, on the other hand, is also making a killing.
Judging how tech (and specifically, social media) use has escalated in light of the pandemic, the social media giant's total advertising earnings increased by 46 percent to as much as $25.4 billion early this year, according to The New York Times.
This is mainly due to just how many people are using Google and Facebook/Meta's services at any given time. For the former alone, around 40,000 searches are being processed every single second-3.5 billion searches a day, and an insane 1.2 trillion searches yearly, according to WebsiteBuilder.org.
With smartphones, tablets, and other devices offering instantaneous access to information, the newspaper companies simply couldn't keep up with that kind of demand. As such, this is fueling discussion among people about whether print media will remain relevant or if it's going to die off soon.
This article is owned by Tech Times
Written by RJ Pierce