Antitrust Clouds—and Lawsuits—Gather Against Big Tech
Published Dec. 2021
What started as a West Virginia publisher’s quixotic quest has become a major lawsuit, brought on behalf of more than 200 individual newspapers, to challenge the uncompensated use of newspapers’ stories online by Google in its search results and by Google and Facebook in their news feeds; a lawsuit that could change the online—and financial—landscape for newspapers and other news organizations nationwide. At the same time, Google, Facebook and other tech giants are facing broader challenges to their dominant role in the modern online world.
The weapon of choice? Anti-trust law.
HD Media LLC, parent company of the Charleston (W.Va.) Gazette-Mail, The (Huntington, W.Va.) Herald-Dispatch and a half-dozen weekly newspapers, filed a federal anti-trust lawsuit in February against Google and Facebook claiming that they manipulate the online advertising marketplace. The complaint, which lays out many of the recent economic woes of the newspaper industry, also alleges that the companies conspired to further this dominance by manipulating auctions for online advertising.
“These companies are more powerful than Standard Oil in its heyday, so no one wants to be the first to take them on,” HD Media president Doug Reynolds told The Wall Street Journal upon filing the lawsuit. “We felt the political and legal climate have moved in our favor and are ready to go ahead.”
“(Google) completely monetized and commercialized their search engine, and what they’ve also done is create an advertising marketplace in which they represent and profit from the buyers and the sellers, while also owning the exchange,” Paul T. Farrell, Jr., one of HD’s attorneys in the case, told Editor & Publisher.
Separate but similar suits were filed by the same lawyers on behalf of newspapers in Delaware, Georgia, Indiana, Maryland, Mississippi (two), Missouri, New Jersey, New York, Ohio, Pennsylvania, Texas, Wisconsin, along with two other lawsuits in West Virginia (1, 2). The end result is that almost 200 publications have either filed such suits or taken preliminary actions to do so. Two other lawsuits were brought by other attorneys in California.
The lawsuits are not the only anti-trust scrutiny that the online companies are facing. In October 2020 the federal Justice Department and 11 state attorneys general—including South Carolina’s Alan Wilson—filed an antitrust lawsuit against Google over alleged anticompetitive and exclusionary practices in the search and search advertising markets. Three other states later joined the suit. In December 2020, the attorneys general of 38 states sued Google over alleged anticompetitive actions in its search results, while in another lawsuit the attorneys general of ten states sued Google for alleged “anticompetitive conduct” in digital advertising. In August 2021 the two attorney general lawsuits and 17 of the other anti-trust lawsuits against Google and Facebook were all consolidated in the federal district court in Manhattan. That case is pending.
In August 2021 the Justice Department filed a modified antitrust suit against Facebook after a prior iteration of the lawsuit was dismissed.
These lawsuits in the courts are not the only antitrust actions being taken against the large tech companies. In October 2021 the House Judiciary Committee published a lengthy report which found that “(t)he companies investigated by the Subcommittee—Amazon, Apple, Facebook, and Google—have captured control over key channels of distribution and have come to function as gatekeepers,” and in many cases had obtained and maintained monopoly or near-monopoly power in certain markets and used this power to limit competition and take advantage of other businesses. The report concludes with proposals to: “(1) address anticompetitive conduct in digital markets; (2) strengthen merger and monopolization enforcement; and (3) improve the sound administration of the antitrust laws through other reforms.”
Meanwhile, a Congressional bill to give newspapers a limited anti-trust exemption so that they can collectively negotiate with Google and other online services for payment for display of their news items is still pending.
For many years, the ground underneath the newspaper industry has been shifting because of the growing dominance of web-based services. Now, through the use of anti-trust law, the landscape may be shifting again, this time in newspapers’ favor, or at least not so far in favor of big tech firms.
A Prior Restraint Persists: Immediately after a New York state judge issued an order on Nov. 18 barring The New York Times from publishing material about Project Veritas, I told a colleague’s class that the injunction would likely be reversed within a few days. After all, the U.S. Supreme Court has consistently held, as it stated in 1931 in a case where it first considered the issue, that “the chief purpose of the [First Amendment’s free speech provision is] prevent precious restraints upon publication.” It has reinforced this position ever since, perhaps most famously in the Pentagon Papers case in 1971. But I was wrong. Instead, the trial judge who imposed the recent order against the Times said that he needed more time to consider the Times’ arguments against the order. And then an appeals court judge declined to dissolve the order, leaving it in place more than three weeks after it was issued.
There are only two other instances in recent American legal history where such orders have been in effect for long periods. In 1979 a federal judge barred The Progressive magazine from publishing an article—sourced from publicly-available government and scientific documents—describing how the hydrogen bomb works, an order which was in effect for seven months until various newspapers published citations to the source material, leading the government to drop the case and an appeals court to vacate the order. Twenty years later, CNN defied a trial court’s order to not air recordings of deposed Panamanian leader Manuel Noriega speaking with his lawyer in his pending drug trafficking case, after the U.S. Supreme Court declined to hear the case. That order remained in effect for 20 days. CNN was later found in contempt for airing the tapes and apologized.
The current case is a bit more complex, since Project Veritas is suing the Times for defamation over an article about videos in which Project Veritas alleged voter fraud in Minneapolis, and claims that the material that the Times published—lawyers’ advice to Project Veritas as it conducted political “sting” operations against Democratic and progressive groups—are protected by attorney-client privilege. (The same claim was used to justify the order against CNN.) The U.S. Supreme Court has held that a newspaper could be barred from publishing materials it obtains in the course of litigation. But the Times points out that the lawyers’ advice was given in 2017 and 2018 and had nothing to do with the defamation suit, which was filed in 2020.
Unless the New York Court of Appeals—the state’s highest court— or the U.S. Supreme Court steps in, it now appears that the order against the Times will remain in place for a while, at least until the trial judge who issued the order finishes his consideration of the parties’ arguments. But whatever the end result, this case may become a troubling, new precedent for allowing prior restraints, at least in some circumstances. Then again, I could be wrong—again.
Eric P. Robinson focuses on media and internet law as associate professor at the USC School of Journalism and Mass Communication and Of Counsel to Fenno Law in Charleston / Mount Pleasant. He has worked in media law for more than 20 years and is admitted to legal practice in New York and New Jersey and before the U.S. Supreme Court. This column is for educational purposes only; it does not constitute legal advice. Any opinions are his own, not necessarily those of his employers.