Rupert Murdoch appears to playing a big part in spurring a Justice Department antitrust suit against Google. He has been one of the most outspoken critics of the internet giant, often while defending his own company, NewsCorp.
NewsCorp has petitioned regulators to look into Google, claiming the company is abusing its power in the $330 billion digital ad market. Most recently, Google made headlines for demonetizing us here at Zero Hedge and those at The Federalist for not censoring the comments sections our respective websites.
Murdoch’s efforts appear to be gaining steam, according to Bloomberg. The EU has fined Google for billions and Australia has forced the company to pay for news. In U.S., no material action has taken place – yet.
That appears to be on the cusp of changing, as The Justice Department, led by Attorney General William Barr, is preparing to file an antitrust lawsuit against the company. NewsCorp representatives have met privately with the DOJ about the investigation, sources say.
Last week a trade group headed up by a senior NewsCorp executive published a research paper outlining exactly how Google has taken publishers’ content and driven traffic without compensating them. The paper was subsequently sent to the DOJ.
Yale University economist Fiona Scott Morton, one of the paper’s authors said: “The publishers are trying to monetize their content and they only have one choice in how to do that, which is Google. Publishers also compete against Google’s YouTube to sell ad space. When a company depends on its direct competitor for revenue, that’s a problem.”
William Barr has been working to rope in Google and its rivals since joining the DOJ in 2019. Last year he opened an inquiry into whether or not they were thwarting their competition and helped shape the investigation. Barr himself also met with Murdoch in NYC late last year, according to the New York Times.
“I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers,” Barr said in 2019.
President Trump has also spoken out, not just about Google, but about other internet giants, referring to them as being controlled by the “radical left”. Murdoch’s NewsCorp features networks like Fox News, who generally provide favorable coverage of the President.
An antitrust suit could throw a wrench in the gears of Google’s digital advertising business.
David Chavern, the president of the News Media Alliance, which represents news organizations, including News Corp, said: “Publishers, particularly quality publishers that invest in content, haven’t believed the digital advertising ecosystem works for them for a long time. The whole system is designed so you can’t follow the money. All we know is we’re not getting enough of it.”
David Pitofsky, News Corp.’s general counsel, said in a House antitrust meeting last year: “Dominant platforms take the overwhelming majority of advertising revenue without making any investment in the production of the news. As a result, one of the pillars of the news industry’s business model, advertising revenue, is crumbling.”
Google, on the other hand, claims that competition in digital advertising is “flourishing.”
On Tuesday evening, we noted that state attorneys generals will meet with DOJ officials later this week to discuss the next steps in the investigation of Google.
And recall, on Wednesday morning, we reported that the DOJ was also in the midst of a “sweeping” antitrust probe of Apple. The DOJ, in partnership with several states attorneys general, are reportedly bringing an anti-trust probe against the consumer tech giant over alleged abuses of its app store – mirroring complaints brought by the European Commission’s anti-trust regulator.