Google and Facebook Face Antitrust Lawsuit from US Media Outlets This Time

"Media Companies Facing Survival Crisis Due to Antitrust and Anti-Competitive Practices"

[Asia Economy Reporter Yujin Cho] Google and Facebook, which occupy more than half of the U.S. digital advertising market, were recently sued by regional media companies in the U.S. for antitrust violations.

According to The New York Times (NYT), HD Media, which owns local newspapers in West Virginia, filed a lawsuit on the 29th (local time) in the U.S. District Court of West Virginia, claiming that Google and Facebook have gained unfair profits by violating anticompetition and antitrust laws.

In the complaint, HD Media argued, "The two companies exploited their monopolistic positions in the digital advertising market to strip newspapers of their market competitiveness and revenue sources." They further claimed, "The two companies made a secret agreement to cooperate in government investigations related to antitrust laws, which constitutes a violation of anticompetition and antitrust laws."

According to The Wall Street Journal (WSJ), the two companies signed an agreement in 2018 not to compete in the online advertising sector. They were aware that such an agreement could trigger antitrust investigations, and the draft contract known as the "Jedi Blue" specified mutual cooperation and assistance in responding to antitrust investigations, as well as the obligation to immediately and fully inform the other party of any communication with the government regarding the contract.

Additionally, from the fourth year of the contract, Facebook agreed to spend at least $500 million (approximately 550 billion KRW) annually on Google’s ad auctions, and Google guaranteed Facebook a certain percentage of winning bids.

In the complaint, HD Media stated, "The two companies’ monopoly of the digital advertising market has led to the collapse of the newspaper industry across the U.S.," adding, "The rise of digital media caused a sharp decline in revenue for many newspapers that once relied on subscriptions and advertising, resulting in more than one in four newspapers nationwide shutting down."

This is the first time U.S. media companies have filed an antitrust lawsuit against IT giants.

(Source: NYT)

This content was produced with the assistance of AI translation services.