The Atlantic Sues Google Over Its Digital Ad Model, Alleging Manipulation and Fraud

The Atlantic on Tuesday sued Google and its parent company Alphabet, alleging the tech giant’s model of serving ads to publishers has become a monopoly and that it has falsely claimed its ad serving practices would serve the Atlantic’s interest — only to enrich itself instead.

In a 94-page federal complaint filed in New York’s southern district, the magazine claimed that Google and Alphabet have “unlawfully acquired and maintain monopolies for the advertising technology…tools that publishers and advertisers use to buy and sell online ad space.” Such control, it claimed, forces publishers to sell ads through Google at lower prices.

“The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google reaps exorbitant monopoly profits,” its attorneys wrote.

The publisher accused Google of violating state law and the Sherman Act and the Clayton Act, two federal antitrust laws that prohibit monopolies and price discrimination, respectively. The magazine seeks damages, attorneys’ fees and a jury trial.

The Atlantic did not have an immediate comment. Google did not respond to an immediate request for comment.

The Atlantic also claimed that, because Google has centralized its ad server through its exchanges, it has prevented publishers from soliciting bids from rival ad exchanges. Google then promoted its ad serving and exchange bidding services as a way to boost publishers’ revenue, the Atlantic alleged, only for such claims to be false representations intended to boost Google’s own revenue. “The enrichment and benefit to Google came at the expense of The Atlantic,” the complaint read.

“For years, Google has represented that its ad serving practices were in The Atlantic’s interests,” the complaint continued. “Time and again, Google staff have acknowledged internally that these representations were false, that publisher inventory pricing was reduced, and that its auction manipulations were ‘inherently unfair.’ Fairness thus requires that Google make restitution to The Atlantic.”

The lawsuit comes a day after Penske Media sued Google for similar accusations and months after a federal judge in Virginia ruled last April that Google had illegally maintained a monopoly in some online advertising technology in a lawsuit brought by the Justice Department and eight states. The Atlantic relied heavily on the decision throughout its complaint, pointing to Judge Leonie M. Brinkema’s decision that said Google’s conduct was “exclusionary conduct” that “substantially harmed Google’s publisher customers.”

“[The Atlantic] is one of those publisher customers,” the complaint read. “It brings this antitrust action for compensation and for injunctive relief to restore competition in the monopolized markets and protect the production of trusted, essential content millions of Americans rely on.”

The DOJ asked a judge in November to force Google to spin off its ad exchange business, while Google has asked that it be made to share more data with publishers and make it easier for them to use competing ad tech tools with Google’s system. A decision on a remedy is expected this year.

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