June 22, 2024
News publisher files class action antitrust suit against Google, citing AI's harms to their bottom line

A new class action lawsuit filed this week in the U.S. District Court in D.C. accuses Google and parent company Alphabet of anticompetitive behavior in violation of U.S. antitrust law, the Sherman Act, and others, on behalf of news publishers. The case, filed by Arkansas-based publisher Helena World Chronicle, argues that Google “siphons off” news publishers’ content, their readers and ad revenue through anticompetitive means. It also specifically cites new AI technologies like Google’s Search Generative Experience (SGE) and Bard AI chatbot as worsening the problem.

In the complaint, Helena World Chronicle, which owns and publishes two weekly newspapers in Arkansas, argues that Google is “starving the free press” by sharing publishers’ content on Google, losing them “billions of dollars.”

In addition to new AI technologies, the suit points to Google’s older question-and-answer technologies, like the “Knowledge Graph” launched in May 2012, as part of the problem.

“When a user searches for information on a topic, Google displays a ‘Knowledge Panel’ to the right of the search results. This panel contains a summary of content drawn from the Knowledge Graph database,” the complaint states. “Google compiled this massive database by extracting information from Publishers’ websites — what Google calls ‘materials shared across the web’ —and from ‘open source and licensed databases,’” it says.

By 2020, the Knowledge Graph had grown to 500 billion facts about 5 billion entities. But much of the “collective intelligence” that Google tapped into was content “misappropriated from Publishers,” the complaint alleges.

Other Google technologies, like “Featured Snippets” where Google algorithmically extracts answers from webpages, were also cited as shifting traffic away from publishers’ websites.

More importantly, perhaps, is the suit’s tackling of how AI will impact publishers’ businesses. The problem was recently detailed in a report on Thursday by The Wall Street Journal, which led with a shocking statistic. When online magazine The Atlantic modeled what would happen if Google integrated AI into search, it found that 75% of the time the AI would answer the user’s query without requiring a click-through to its website, losing it traffic. This could have a major impact on publishers’ traffic going forward, as Google today drives nearly 40% of their traffic, according to data from Similarweb.

Some publishers are now trying to get ahead of the problem. For example, Axel Springer just this week inked a deal with OpenAI to license its news for AI model training. But overall, publishers believe they’ll lose somewhere between 20-40% of their website traffic when Google’s AI products fully roll out, The WSJ’s report noted.

The lawsuit reiterates this concern, claiming that Google’s recent advances in AI-based search were implemented with “the goal of discouraging end-users from visiting the websites of Class members who are part of the digital news and publishing line of commerce.”

SGE, it argues, offers web searchers a way to seek information in a conversational mode, but ultimately keeps users in Google’s “walled garden” as it “plagiarizes” their content. Publishers also can’t block SGE because it uses the same web crawler as Google’s general search service, GoogleBot.

Plus, it says Google’s Bard AI was trained on a dataset that included “news, magazine and digital publications,” citing both a 2023 report from the News Media Alliance and a Washington Post article about AI training data for reference. (The Post, which worked with researchers at the Allen Institute for AI, had found that News and Media sites were the third largest category of AI training data.)

The case points to other concerns, too, like changing AdSense rates and evidence of improper spoliation of evidence on Google’s part, by its destruction of chat messages — an issue raised in the recent Epic Games lawsuit against Google over app store antitrust issues, which Epic won.

In addition to damages, the suit is asking for an injunction that would require Google to obtain consent from publishers to use their website data to train its general artificial intelligence products including Google’s own and those of rivals. It also asks Google to allow publishers who opt out of SGE to still show up in Google search results, among other things.

The U.S. lawsuit follows an agreement Google reached last month with the Canadian government which would see the search giant paying Canadian media for use of their content. Under the terms of the deal, Google will provide $73.5 million (100 million Canadian dollars) every year to news organizations in the country, with funds distributed based on the news outlets’ headcount. Negotiations with Meta are still unresolved, though Meta began blocking news in Canada in August, in light of the pressure to pay for the content under the new Canadian law.

The case also arrives alongside the filing of the U.S. Justice Department’s lawsuit against Google for monopolizing digital ad technologies, and references the 2020 Justice Department’s civil antitrust suit over search and search advertising (which are different markets from digital ad technologies in the more recent suit).

“The anticompetitive effects of Google’s scheme cause profound harm to competition, to consumers, to labor, and to a democratic free press,” reads an announcement posted to the website of the law firm handling the case, Hausfeld.

“Plaintiff Helena World Chronicle, LLC invokes the Sherman Act and Clayton Act to seek class-wide monetary and injunctive relief to restore and ensure competition for digital news and reference publishing and set up guardrails to preserve a free marketplace of ideas in the new era of artificial intelligence,” it states.

Google has been asked for comment, but one has not yet been provided.

The complaint is available below.

Helena World Chronicle, LLC v. Google LLC and Alphabet Inc by TechCrunch on Scribd

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