The Atlantic vs. Google: A Legal Battle Over Advertising Practices
The Atlantic has taken legal action against Google, claiming the tech company is monopolizing the digital advertising sector. This lawsuit puts one of the oldest magazines in the U.S. up against the Silicon Valley giant.
According to the magazine, Google and its parent company, Alphabet, have manipulated the digital market through secret auction strategies and practices that violate antitrust laws, which they refer to as “tying.” These alleged actions have reportedly cost publishers millions, solidifying Google’s control over online advertising.
In response, a Google spokesperson dismissed the accusations, labeling them as unfounded. They contended that advertisers and publishers have plenty of options and typically choose Google’s advertising tools simply because they are reliable and user-friendly.
The 94-page lawsuit was filed in federal court in Manhattan. The Atlantic claims that Google leveraged its dominance in ad servers and exchanges to coerce publishers into its network, stifling competition and driving down ad prices.
A central claim in the case involves “tying,” which is considered an antitrust violation where a company uses its control over one product to push customers towards another, less desirable product.
The Atlantic asserts that by requiring the use of its own ad server, DFP, access to Google’s powerful AdX exchange is contingent upon publishers needing to connect with major advertisers. This effectively limits their options and restricts competing ad tech firms from entering the market.
The lawsuit likens Google’s actions in digital ad auctions to insider trading on Wall Street, asserting that the company has run a “sophisticated, anticompetitive, and deceptive scheme for more than a decade.” The complaint alleges that Google uses its control over ad servers to gain access to sensitive information, thus giving its exchange an unfair advantage.
Moreover, it claims that Google could potentially manipulate bids by checking rival offers before placing its own. It also asserts that Google complicates things for site operators trying to get competitive bids while simultaneously using insider data to sway AdX bids.
This competitive edge reportedly allows AdX to win auctions by merely matching or slightly underbidding rivals—an internal practice known as “Last Look.”
The lawsuit outlines secret initiatives allegedly designed by Google to sway auction outcomes without the publishers’ awareness. One of these, called Project Bernanke, was described as so sensitive that employees were cautioned not to discuss it. The Atlantic claims this project enabled Google to underpay publishers and create a hidden fund to support its own unsuccessful bids while blocking competing exchanges.
The financial fallout appears to be considerable; internal assessments cited in the lawsuit suggested that the Bernanke project could cut publishers’ revenues by over 40%. Despite this, Google is said to have continued using the tool while assuring publishers of fair conduct in its auctions.
Founded in 1857 and owned by Lorene Powell Jobs, widow of Apple co-founder Steve Jobs, The Atlantic argues that modern journalism can’t survive solely on subscriber fees. Google’s methods allegedly generate significant monopoly profits, with the company predicted to earn around $30 billion in profits in 2022 while slashing publisher revenues.
This lawsuit was filed the day after similar actions were taken by Penske Media Corp. and Shemedia, with both led by the same law firm, Kellogg Hansen Todd Figel & Frederick.
Penske Media, led by CEO Jay Penske, oversees several prominent brands in entertainment and culture, such as Variety, Rolling Stone, and Billboard. Similarly to The Atlantic, PMC claims that Google’s dominance forces its publications to sell ad inventory at artificially reduced prices, ultimately undermining funding for journalism and cultural coverage across its platforms.
Outreach efforts for comments have been made to The Atlantic, Google, and Penske Media Corp.
