By Jack Denton
The publisher of one of the world’s most popular news sites is suing Google and its parent company, Alphabet, alleging that the internet giant manipulates search results as punishment and abuses its dominance over the online advertising market.
The lawsuit filed against Google and Alphabet /zigman2/quotes/202490156/composite GOOGL +0.15% /zigman2/quotes/205453964/composite GOOG +0.19% in New York by Associated Newspapers and Mail Media on Tuesday marks the start of a high-profile digital media skirmish, at a time when the technology giant is attempting to make peace with publishers.
Associated Newspapers and Mail Media, subsidiaries of Daily Mail and General Trust /zigman2/quotes/206568132/delayed UK:DMGT -0.19% , allege that Google harms publishers and advertising rivals through its control of advertising technology tools. These tools include the software that publishers use to sell ad inventory and the dominant exchange where ad slots are sold via auction.
The publisher of the Daily Mail, DailyMail.com and MailOnline accuses Google of using complex algorithms to rig the bidding processes involved in online ad-space auctions, hurting publishers and boosting its own profits. Alleged bid rigging is also the subject of a lawsuit against Google filed by 10 states in the U.S.
The Daily Mail lawsuit also alleges that Google manipulates search results to punish publishers if they don’t sell enough of their inventory on Google’s exchange. The group accuses Google of, in 2019, causing the Daily Mail to disappear on search results in June, only to restore it in late September, after the publisher sold twice as much inventory through Google’s exchange.
Google is the world’s largest search engine and the most dominant force in online advertising. The tabloid Daily Mail is a 125-year-old British publication, and its website, DailyMail.com, receives 225 million unique monthly visitors, according to the company.
“This lawsuit is to hold Google to account for their continued anticompetitive behavior including manipulation of ad auctions and news search results, bid rigging, algorithm bias and exploiting its market power to harm their advertising rivals,” said a DailyMail.com spokesperson in a statement.
Google firmly denied the allegations in a statement to MarketWatch. “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,” a Google representative said. “We will defend ourselves against these meritless claims.”
The tech giant also noted that the ad tech sector was “crowded and competitive,” saying that the Daily Mail itself authorizes dozens of companies to sell and manage its ad space, including Amazon /zigman2/quotes/210331248/composite AMZN +3.31% and Verizon /zigman2/quotes/204980236/composite VZ +0.67% .
The publisher also took issue with Google’s “Privacy Sandbox,” a proposed new advertising technology tool to limit the flow of user data online that is under the regulatory microscope in Europe . This new tool would go beyond measures to protect user data to make Google Chrome’s browser an even more dominant force on the internet, the group said.
Google faces the lawsuit as it is trying to make peace with news publishers, including through lucrative content deals. In February, News Corp struck a three-year deal with Alphabet to provide premium content for Google’s News Showcase product in exchange for “significant payments.” News Corp’s /zigman2/quotes/201755982/composite NWSA -0.67% /zigman2/quotes/204787942/composite NWS -0.17% properties include Dow Jones, publisher of the Wall Street Journal and MarketWatch.
The lawsuit also meets a global regulatory landscape that is increasingly unfriendly to tech giants. Alphabet faces an antitrust lawsuit from the U.S. Justice Department, while in Europe, the big technology companies face landmark new regulation that includes the possibility of multibillion-dollar fines and the breaking up of companies if they don’t comply with new rules.