What you need to know:

• Australian law firm Maurice Blackburn is investigating a publisher class action against Google in a strikingly similar $8 billion lawsuit that's already underway in Canada – led by a tiny regional community publishing boss, Lisa Sygutek, who won’t be cowed. “Find your inner warrior, sign-up, go for it,” she urges Australian media owners. (Publishers can sign-up here.)
• Miranda Nagy, the lawyer leading the class action investigation locally, likewise calls on publishers large and small to join the proposed action. She’s aiming to secure “best possible” retrospective compensation.
• Maurice Blackburn has come to the same conclusion as the US Department of Justice, various European regulators, and a dozen US state attorneys general. They allege Google manipulated and gamed publishers and brands for years with secret deals and projects – some in collusion with Meta – that actively sought to disadvantage them while entrenching Google’s market dominance – taking billions of dollars away from publishers and fleecing advertisers in the process by charging far more than was either necessary or officially disclosed.
• The alleged ruses include things like ‘project Bernanke’, in which Google was essentially able to “to take a bigger spread between publishers and advertisers, which means both publishers are getting less money and advertisers are paying more,” according to Adil Abdulla, the lawyer leading the Canadian legal effort through Sotos Class Actions. 
• Then there was ‘Jedi Blue’, in which Google is accused of colluding with Facebook to kill the free market publishers and the broader ad market had tried to build through header bidding.
• Jason Kint, CEO of US peak publisher body Digital Content Next, says Jedi Blue’s impacts “are still playing out” and forecasts “a bloodbath of lawsuits being filed”.
• He thinks the Trump administration will go just as hard with “eight to 10 different code name projects” to go after – and predicts a break-up of Google.
• While many US publishers, advertisers and agencies had been “captured” by Google, Kint reckons that “halo is starting to come off”. He urges marketers and the supply chain locally to likewise reject being strong-armed.
• For publishers, Future Media founder Ricky Sutton echoes that call: “This is the first window in 20 years where we've got a chance to take back some of the things that we've lost. What we do is too valuable to be lost to one commercial company with a 25 year run in the sunlight.”
• Get the full download via the podcast.

Maurice Blackburn’s proposed class action is strikingly similar to an $8bn action now underway in Canada, spearheaded by Lisa Sygutek owner and publisher of a small town newspaper, the Crowsnest Herald in Alberta, Canada via Toronto-based law firm Sotos.

It’s a classic David versus Goliath case. But it’s effectively being fought on a no win, no fee basis. In fact, if the action fails, Omni Bridgeway, the ASX-listed litigation financing firm part funding it, will be out of pocket, along with Sotos. Hence litigation funders like Omni Bridgeway tend to go heavy on due diligence – and take on those cases they stand a decent chance of winning.

Double header

Adil Abdulla, the lawyer leading the Canadian case for Sotos Class Actions, says the case effectively hinges on Google deceiving publishers.

“Our case is about Google telling publishers that they are trying to maximise the revenues when, in fact, they structure their auctions in a way …. [that] is actively suppressing publishers revenues. And at the same time, Google is trying to kill a technology that would increase publishers’ revenues, and it's bringing Facebook along to help it do that.”

Amid a laundry list of alleged anticompetitive behaviour and deceptive practice, Abdulla highlights two standouts, dubbed internally by Google as project Bernanke and Jedi Blue.

Bernanke, says Abdulla, is about the structure of how Google runs the split second auctions that determine which advertiser dollars end up as ads on a publishers’ site. Or as the DoJ puts it, “manipulating advertiser fees”.

A key part of its claim is that Google told advertisers it was running what is called a second price auction in the real time online ad marketplaces. Under its stated rules, advertisers pay the second highest priced bid in the auction, plus one cent, to win. The advertiser gets the audience it wants, Google takes its cut and then the publisher gets paid that second highest bid.

For example, if there were three bids – $20, $16 and $12 – the advertiser who bid $16 would win, Google would take its cut and most of the remainder would go to the publisher. So on a $16 winning second bid, the publisher would receive $12.80 if Google’s cut was 20 per cent.

But per the DoJ allegations, Google was instead secretly running a third price auction. Using that same three bid example, the lowest $12 bid would therefore win, and as a result, the publisher would receive only $9.60

According to Abdulla, and based on the US antitrust case claims, Google pocketed the difference. “It charged the buyer of impressions [i.e. the advertiser] the second price that was submitted in the auction, but only paid out the third price – and they just kept that difference between the second and third price and used it for additional nefarious purposes.”

Those “nefarious purposes” include allegedly using the money to bump up advertiser bids in other auctions to make sure Google advertisers won, thereby reducing revenue for publishers and crimping growth for would-be rival advertising platforms.

“So ultimately, Google is able to take a bigger spread between publishers and advertisers, which means publishers are getting less money and advertisers are paying more,” says Abdulla.

Jedi Blue

Jedi Blue was a deal the DoJ says Google struck with Facebook to kill an advertising mechanic called header bidding – which allowed publishers to make more money while reducing their reliance on Google by opening up their inventory to the broader market, i.e. multiple demand sources. More advertisers bidding for the same spot at the same time meant much higher yields for publishers while giving advertisers more transparency – and from about 2014 onwards header bidding was gaining traction.

“The problem for Google is that if you use header bidding, all of Google's nefarious algorithms don't work, and they can't use the things that allow them to profit at competitors expense,” says Abdulla. “So they hate header bidding, and they used a whole variety of things as part of a campaign they called Jedi to kill header bidding. They called it Jedi because they wanted, according to internal documents, to play ‘a Jedi mind trick’ on publishers to get them to do things that are not in their best interests.

Jedi Blue was where Facebook came in. Recognising an “existential threat” to its publisher ad server and ad exchange dominance, and with Facebook ramping up use of header bidding via Facebook Audience Network, Google is accused of engineering a deal with Facebook to kill off header bidding whereby Facebook would gain an advantage in the auctions including pricing, speed, and data enabling it to avoid worthless impressions, i.e. bots and spam.

“Right before this agreement, Facebook went all in on header bidding. They were going to make an ecosystem where publishers could use header bidding and make way more money. There were predictions of anywhere from 10 to 100 per cent more money, and Google wanted to stop them from doing that,” says Abdullah. “So they said, ‘Facebook, if you stop doing header bidding and help us kill header bidding, we'll cut you in on our action. We will let you also buy impressions at suppressed prices’. Facebook said yes, and that was the Jedi Blue product,” he adds.

“So our case deals with both the Bernanke misrepresentation aspect and the Jedi Blue collusion aspect.”

Search signal

While the DOJ-led adtech ruling won’t be known until next month at the earliest, Jason Kint, CEO of US peak publisher body Digital Content Next, thinks August’s ruling that Google operates a monopoly with search – “and just as importantly, in search text advertising” – signals the shape of things to come. He thinks break-ups are on the cards, as well as global scope for class actions.

“There are thousands of publishers globally and they're all impacted by these issues – and the movement that began this was investigations around the world. A lot of the focus is now coming into the United States, because the enforcement at the Department of Justice is now playing out – and I think that's when things start to really turn the screws on Google.”

Kint suggests regulators have started to act as a self-learning hive mind.

“The ACCC's ad tech investigation [in Australia], the ACCC's determination that Google has an imbalance in bargaining power … Canada's investigations, the UK's investigation, the EU's investigations, Germany's investigations … Texas watched the UK, Texas cited the ACCC when they did their investigations, the Department of Justice looked at all of that. So everyone's learning from each other, everybody's starting to speak the same language. And it's the balance that's necessary to deal with a global authoritarian company like a Google. And so, credit to the world.”

Now the fixes are about to become clear, with DoJ search case remedies out in recent days, ranging from a $16bn offload of Google’s Chrome browser to open access to Google’s data for advertisers – and the advertising aspect of the search case is crucial, Kint says, “because search text advertising is where the ad tech case starts”.

“There's a determination that they had monopoly power. They've used it in the search text ad business, and then took that market power and dominated the entire ad tech stack, to the point of the discovery of the documents showing that was their strategy – to do to adtech what they did to search,” per Kint.

“They’ve already been found liable for search … and it’s a domino effect that is playing out … Then you have private cases and class actions happening too.”

Trump impact?

The biggest question mark now is what happens under the Trump administration and “whether they go for the jugular and break up the company or do they try to settle for something less”.  But Kint points out that the antitrust cases started out under the previous regime back in 2020.

“The Trump administration brought the [Justice Department] case; a very conservative AG [Attorney General] brought the Texas case … they don't like market power, dominance and abuse and choke points as much as anybody,” says Kint. “So I’m fairly optimistic that … enforcement will play out as we've seen it playing out so far.”

He thinks that may open Google up to a tsunami of litigation.

“As much as in the US they've tried to pretend that Jedi Blue is not still playing out, it very much is … You're going to see more suits get filed as we get decisions. If the ad tech decision goes against Google next month, I think you're going to see a bloodbath of lawsuits being filed.”

Break ups incoming

Kint believes Google being broken up is increasingly likely.

"[The Justice Department] want a break up in the adtech case and in the search case, they have already filed their framework, which said that they were definitely considering going for a breakup, divestiture of Chrome and Android and potentially the App Store."

With closing arguments now heard and presiding judge Leonie Brinkema aiming to deliver a swift verdict, Kint thinks that will land “probably in December”.

Then it'll get appealed. So we could be dealing with another year or two years, depending on whether or not there's a settlement in the adtech case. But I think breakup is absolutely on the table.”

That’s because, alongside Bernanke and Jedi Blue, “there are eight to 10 different code name projects that are all the type of abuse and misrepresentation that happens when somebody has too much market power and they control the algorithm.”

LLM implications

The outcomes and actions of the antitrust cases will also have a major bearing on whether or not publishers get fleeced again – this time via content scraping to train AI-powered large language models (LLMs), per Future Media founder Ricky Sutton.

“One of the most important things for me in the actions that are being sought by the DoJ is to stop Google doing a thing called tying,” says Sutton.

Right now, if a publisher doesn’t want their content to be used for AI training, Sutton says the response from Google is that publishers can remove Google code from their site. “But the result of that is you then disappear from search. So you either have to not be in search and not have your content used for AI, or you can be in search but then you have to be used for AI," he says.

“So one of the things that the DoJ has asked for is to separate those two and to enable a publisher to not be used for AI and still remain in search, which is again about market power and using that market power to be able to set its own rules for its own best outcomes,” adds Sutton.

“So in that scenario, if that does go ahead, and if that change happens … what it really means is that a whole new market opens up for publishers to sell access to training LLMs  – and so I think that's essential.”

Kint agrees – but says it “could go very wrong” if those remedies force Google to share the data it has already scraped with other AI firms without paying publishers – and without giving them a choice in who they want to sell to. Likewise all the data Google has already amassed via publisher sites for its ad business.

“There are tonnes of third party companies out there that would love to have access to all the data that Google scrapes off of the publisher site … and if that has to be shared, that's also a problem. It's about limiting the amount of data and the IP that can be stolen rather than shared.”

Getting it right, says Sutton, provides a chance to create a sustainable future for quality content, and “a real chance to reset that playing field and flatten it again”, rather than just fatten a few very large tech companies.

“I think that's just a good outcome for everybody, because we're going to get, hopefully, a return to the publication and the monetisation of premium content that can be kept and sustained.”

In the meantime, Sutton urges publishers to collectively stand up for themselves rather than fighting each other for scraps.

“When you read through the thousands of pages of documentation … this tells a story of a systematic and deliberate, multi-decade takedown to go after publisher revenues.”

“Every time I hear Google say, ‘news isn't a big deal to us, we don't really care that much, no one's really that interested in searching in news’. But what Google is interested in is all of our audience, all of our data and all of our money. And I think that as an industry we’re allowed to feel pretty angry after all these years – and actually feel that we deserve some damages,” says Sutton.

Australian class action

Australian law firm Maurice Blackburn agrees and has been investigating “for a while,” according to Miranda Nagy, the lawyer building the case. Nagy says the US lawsuits place in stark relief how even the largest publishers felt “held hostage” to Google, given its “overwhelming presence” in adtech.

“The reality is that if you are a publisher, you are reliant on them and I think that’s the same truth for large publishers as well as small – and that's what we also see in Australia.”

The trove of regulator-led lawsuits and internal Google documents they have unearthed have also made “very, very clear … that you have a global system, you don't have a system that has any meaningful regional difference at all – you have a company with global market power”, says Nagy. “[You have] in some ways, a company which has more power than many nation states, operating in a way that is essentially uniform globally.”

While antitrust laws in some countries are weaker than others, Nagy says Australia’s were beefed up via the Competition and Consumer Amendment (Misuse of Market Power) Act 2017. These provide regulators tackling Google locally, with “quite possibly a really important testing ground for the utility of those laws”.

For the publisher class action Maurice Blackburn aims to launch, Australia also has “a very good, strong and mature class actions regime … We don’t have preliminary hurdles like class certification, which is something that you have to get over in the US and I think Canada and the UK”, says Nagy.

“Our courts are really used to allowing large numbers of people, sometimes hundreds of thousands, to band together, run these cases, test these important legal points and take the fight to big companies who, frankly, would not be accountable in this way without a regime that affords access to justice like ours.”

What’s next?

“We’re really keen to talk to publishers,” says Nagy. “We've already started a lot of those conversations and we want to know about the [publisher] impacts of using the Google platforms. We want them to contact us.”

That’s literally anyone with a website and/or mobile app that sells advertising programmatically – or has done at any point over the last six years. Interested publishers can register for the class action here.

While there are sensitivities for publishers reliant on Google for a big chunk of revenue, “we have that in mind when talking to people”, says Nagy.

“But certainly it's of great assistance to us in building a case that's going to be robust and substantial to be in contact with publishers. So I'd really invite people to get in touch with me at Maurice Blackburn,” she adds.

“What I will be focused on is what we can do to get the best possible compensation for publishers, assuming we get off the ground with this class action – which I'm very optimistic about.”

Resist capture

Lisa Sygutek, the Crowsnest Herald owner bidding to land compensation for Canadian firms, urges Australian publishers not to be cowed.

“The big news corporations in Canada don’t want to touch it, I can’t even get traction to get them to write a story on it,” she says. “It’s quite disturbing … I really think they are scared of taking on the giants, they’re scared of upsetting them, of losing market share, losing revenue. So it’s crickets in Canada. We’re getting more traction in Australia and the US even in our own country.

“So I want to put a call out to Australian publishers and around the world to band together and fight for what is right and fight for our industry,” says Sygutek. “Find your inner warrior, sign up and go for it. We have to do this, all of us, because it’s the make or break of our industry.”

Advertiser complicity?

Digital Content Next’s Jason Kint says advertisers and agencies likewise have been “very, very quiet on this”. He thinks it might be in their interest to start making a bit more noise.

“The [comms] holding companies have a lot of influence and power. They've bought into the current system and there's a lot of capture … As the anti competitive allegations become fact, because of the evidence, everybody needs to be paying a lot of attention and … sharing their concerns about what has been built and captured by Google.”

He says while Google’s “halo has started to come off” in the US due to the exposure of its alleged business practices, “Google is countering that with buying out publishers” and trade associations. “They are one of the biggest funders of the IAB, which represents advertising globally, and so all those organisations are not speaking out about the concerns. They're all very quiet because they all take money from Google,” says Kint.

“Everybody needs to be paying a lot more attention.”