Chairman, Chief Executive Officer & President, GANNETT CO INC
Exclusive: Gannett CEO Mike Reed lays out the case for taking on Google with a civil suit
Gannett Co., Inc. filed a federal lawsuit in the U.S. District Court for the Southern District of New York against Google for ...
About Michael Reed
In September 2023, Gannett CEO Mike Reed discussed the company's federal lawsuit against Google, filed in the U.S. District Court for the Southern District of New York. Reed stated that Google has engaged in "monopolistic business practices" that have impacted Gannett "for a long period of time," specifically related to digital advertising technology. He said Google "controls every single part of the process," including ad placement, exchanges, and pricing, and that this has allowed the company to "depress prices for publishers." Reed estimated Gannett's damages are "well north of a billion dollars" and noted that U.S. antitrust law provides for automatic trebling of damages. He described the lawsuit as focused on advertising technology, not on content theft or copyright violations, which he said are issues with other tech platforms. Reed expressed optimism about the future of local journalism, saying he sees "a robust future for journalism for local news, regional news, national news." He noted that Gannett's news platforms have 150 million unique monthly visitors and argued that "consumers want news," but that "Google makes all the money on the advertising side on the back of our news." Reed said the goal of the lawsuit is to create "a level playing field for all publishers" and a "fair and competitive marketplace." He attributed the closure of 20 percent of U.S. newspapers and a 50 percent reduction in the journalism workforce over the past 15 years to the impact of Google's practices, and stated that "when we get fair playing fields and fair compensation," the number of journalists in the country will increase.
Transcript (18 segments)
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Mike Linder0:03
This is E&P Reports, a vodcast from Editor & Publisher magazine, the authoritative voice of news media since 1884, serving newspapers, broadcast, digital, and all forms of news publishing. And hi and welcome to this special edition of E&P Reports. I'm Mike Linder, publisher of E&P magazine, along with our editor-in-chief Robin Blender, and our special guest today, Mike Reed, CEO of Gannett. Mike, welcome to the program. Thank you so much for joining us. We know this is a busy day for you, but if I may kick off our questions: why was it important for Gannett to file the suit as a standalone plaintiff, and why at this particular moment in time?
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Michael Reed0:50
Well, the actions that Google has operated under that have been monopolistic business practices have impacted us for a long period of time. You can argue that maybe the lawsuit should have been filed sooner. There does seem to be some good momentum right now behind this action given the DOJ's federal lawsuit against Google for the same infractions around their ad tech, digital ad technology. There's also 34 states that have joined forces in Texas to file a class action against Google for the same ad technology monopolistic practices. And then the EU, you saw that same undertaking by their government last week. So there seemed to be some momentum right now around this. And so the timing… This action that we've taken is really driven by Google's business practices and their impact on our company and on journalism at the end of the day. You saw a lot of points in our public filings around this, and we can go over those if you'd like, but this is something that we would have undertaken regardless of any of the other things that are going on. And you could argue we waited too long, but you got to do it sometime. As far as us going by ourselves, we just felt like we had the right size, we had the right legal counsel, and felt like we didn't want to wait; we were just ready to go.
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Mike Linder3:01
Mike, do you think that adding your weight and reputation to some of these other lawsuits, one in particular that HD Media filed earlier a couple of years ago actually, do you think that'll increase the likelihood of an acceptable outcome for all the litigants? Are you hopeful for that, or is this really about Gannett's business?
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Michael Reed3:25
I'm really hopeful that we get the right outcome for all, not just all litigants, but for the journalism industry, right? Absolutely. The journalism industry has really survived for 200 years on selling advertising. Consumers want content; they want local news, national news. Content producers like ourselves have produced that news for a couple hundred years and have built a business model around advertising. And in this digital arena now that 90% of consumers get their news on a digital platform, you would think digital advertising, which has exploded to a $200 billion industry, would have benefited publishers who produced the content, given consumers are coming to them to digest the content, to engage with the content. But Google has inserted themselves in the middle, and they control every aspect of the digital advertising marketplace, from ad placement to the ad exchanges to pricing. It's odd for the middleman in this equation to make all the money. So our hope is that we get the right outcome for the entire industry and that journalism can survive for the next hundred years because we get a level playing field around the digital advertising marketplace.
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Mike Linder4:55
Mike, this suit obviously has a dollar figure attached to it. How are you calculating or estimating these damages to your ad revenue? And can you give us a figure and how you arrived at it? Can you tell us what you're really looking for here? What's the number?
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Michael Reed5:15
We didn't put a specific number out, and we did indicate in the materials we published that there's a significant amount more we're going to learn in discovery based on the lawsuit. But we think our damages are well north of a billion dollars just to start. I can't tell you exactly how much, and that number will hopefully grow through discovery. But US antitrust law also provides for automatic trebling, which adds maybe three times. So we think the number is substantial, we think it's big, we think it's fair. But we're going to learn a lot more in the coming months and can be a little more precise.
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Robin Blender6:03
I'm curious, Mike, why not name any of the other platforms like Meta? I know they've backed down quite a bit, but I know Google's the 800-pound gorilla, but...
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Michael Reed6:16
Well, Robin, this lawsuit is not around content and the theft of that content, violation of copyright laws, which is where the other tech platforms have been more aggressive in lifting our content and violating copyright protection laws. This is specifically related to advertising in the ad tech platform that Google has built. Google specifically controls every single part of the process. Basically about 90% of the advertising comes through Google in some particular way; 60% of our advertisers come through Google. But they control every aspect of it, from the placement of the digital ad to the advertising technology in the middle, the ad exchange in the middle. They understand pricing before anybody else in the marketplace understands pricing, so they have an unfair competitive advantage. And that's allowed them to depress prices for publishers like us and for them to make all the money. So, Robin, this is more specifically around Google's actions to dominate the ad tech and the digital advertising marketplace, versus content that all the tech platforms have benefited from through lifting it from us. Our goal there is broader with regard to the tech platforms. The industry association is pushing hard to get the JCPA into legislation, which will help a lot, but that's a separate issue of copyright infringement from this particular issue.
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Robin Blender8:12
Do you, just to follow up on that, do you feel that, or this may be jumping ahead, is there a possibility that Gannett has the opportunity at some point to be that ad tech middle person for the news publishing industry? I mean, you definitely have the size.
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Michael Reed8:35
I'd say what we would love to accomplish with this is to have a level playing field for all publishers and any digital advertising marketplace to have a fair and competitive marketplace. We're not looking to take over as a dominant player there; we're just looking for a fair marketplace that we think will benefit all publishers, right.
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Mike Linder8:57
Mike, Gannett is involved in many associations. You have been to conventions, you're on the board of some, and the Google News Initiative has thrown a lot of cash over the past couple years, I say our way, I mean all news publishing and broadcast, somewhere north of six or seven hundred million dollars. Is that one of the reasons why, in your opinion, that this is the first time you've ever decided to ask Google to cease its anti-competitive advertising behaviors? I mean, have you ever reached out before, or was it because of all this industry support that you haven't done this until now?
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Michael Reed9:41
No, I don't think one has to do with the other. The monopolistic practices that are underway at Google have been underway for a long period of time, and we reached a breaking point with how much it has suppressed our business and how much it has depressed our industry. The fact that 20% of the newspapers in this country have closed over the last 15 years, and 50% of the journalism workforce has been downsized over the last 15 years -- we just reached a point where it has to stop. So it doesn't have anything to do with the other things. It was just time because we can't incur any more losses, and we need to stop the current practices which benefit only one person, and that's Google, and nobody else. And Google doesn't employ the journalists.
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Mike Linder10:39
Last question, because I know we only got 15 minutes of your valuable time, and we appreciate you giving it to E&P today. I want you to put on your not the great hat or take out your crystal ball, Mike. You are the CEO of the largest news publishing organization in North America. Assuming now that antitrust legislation or suits in some way shape or size comes through, assuming federal legislation or at the state level we get the incentives for the publishers who craft local news, or we get some compensation to the advertisers to support it, Mr. Reed, do you see a future for robust, sustainable local journalism in North America?
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Michael Reed11:23
I do. I'd say a thousand percent, I see that.
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Mike Linder11:26
Can you put a little bit more meat on the bone, sir, for the thousands of people listening to this today? Are you Pollyanna?
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Michael Reed11:32
I see a robust future for journalism, for local news, regional news, national news. Look, consumers still engage with news every single day. We have 150 million uniques to our news platform here in the US every month. So there's engagement; consumers want news. We spend all the money creating the news, and Google makes all the money on the advertising side on the back of our news. That's what needs to change. And our news gets lifted, copyright infringement, and others make money off our news on their platform and don't pay us fair use for it. So we do need to get these things corrected through fair playing fields and fair compensation. And I think we will. And when we do, I think local, regional, and national news will thrive, and you'll see the number of journalists in this country going up versus going down.
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Mike Linder12:39
Mr. Reed, thank you so much for your valuable time. On behalf of Robin, myself, E&P, and our readers, thanks again. Thank you, great to talk to you guys.
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Michael Reed12:51
Thank you, great to talk to you guys.