The fearless editor leading an $8 billion class action against Google

Exclusive: The action also targets Meta and is a forerunner for a multi-national suit worth hundreds of billions for publishers if successful...

This is a big one, so buckle in...

A former editor once snarled at me: “If you never go, you never know,” adding with a grimace: “So Ricky, I do need to ask you. Why the f*** can I still see you?”

I reflected on Andy’s invective as I slumped exhausted on a leather couch in New York’s Newark airport, part-way through a 34-hour schlep from Canada to Sydney.

I went, I heard, and today I’m sharing what I learned, from media execs, owners and operators on the frontline of a tech-tonic plate shift in media. It’s quite a big story.

And what I can reveal will impact global newsrooms far more than news media bargaining codes, shady backroom payoffs, or Google’s filthy news initiative bribes.

It’s worth hundreds of billions of dollars, and will happen sooner than most realise, which means it may well be the most impactful newsletter I’ve penned so far.

And the epicentre is a tiny country town at the foot of the Canadian Rockies, 13,100 kilometres as the crow flies from my home Sydney.

And as I know that my former editor Andy is a reader, I want you to know. I went boss, just like you taught me. Cheers for the lesson. OK, let’s get into it.

Global headlines are focusing on the penalties Google will soon face for its illegal assault on publisher ad revenues, but the rulings have set a bigger time bomb ticking.

The guilty verdicts have triggered a host of unprecedented publisher class action lawsuits. Some are public, others are still to break the surface.

But all springboard off the US Justice Department’s court wins, and the lawyers are demanding hundreds of billions in damages for publishers.

And spearheading it all is a tiny four-person newspaper called The Pass Herald in Alberta, led by its feisty and fearlessly determined editor Lisa Sygutek.

She and her legal team have already won a judge’s approval to demand up to $8 billion in damages from Google and Meta to recoup losses wrought on Canadian publishers.

If successful, it will be 16x any antitrust settlement in Canada’s history.

Lisa’s a Netflix documentary in the making, publishing’s Erin Brockovich, and we met on Canada’s remote Prince Edward Island last week.

She told me: “When I started using Google for ads, my first cheque was for 17 cents. Then, our national advertising started to shrink dramatically.

“It was Google, and that pissed me off. My paper’s not a business, it’s a legacy. I’m doing right in the world.

“When I launched this legal action, some in my industry implied I should stay in my swim lane, but my special power is that I don’t hold back.

“I’d tell the Prime Minister he’s an a**hole if I thought he was. We are the checks and balances for democracy, and that’s why I am going into bat… for everyone.”

Since we spoke, I’ve identified class actions are underway, or planned, by thousands of publishers in America, Australia, the UK, and Europe.

Damages totalling hundreds of billions are being sought off the back of the DoJ’s victories. There’s no official number, but an estimated 36,000 publishers are joining.

A lattice of law firms covering more than two thirds of the planet are comparing notes and filing complaints to courts to get the ball rolling.

In most jurisdictions, damages claims are limited to the past eight years, but not all.

The cases seek reparation for ad revenue lost to publishers through Google’s self-preferencing of its ad supply, backroom deals with Meta, and other losses.

The antitrust guilty verdicts secured against Google over the past year have provided the foundations for the actions.

Lawyers have already found big money backers who are underwriting the high cost of the legal cases, such is the confidence of them winning.

This confidence has only strengthened after initial efforts by Google to dismiss the case in Canada was rebuffed by the judge.

The damages, combined with structural changes demanded by the DoJ, have the potential to refloat publisher earnings, and re-flatten the playing field for competition.

The damages will also dwarf the payouts publishers have begged for in bailouts from Governments, and the bribes they’ve taken from the Google News Initiative for years.

It’s the biggest untold story in global media, playing out from this office in Crowsnest Pass, Alberta.

It’s behind that door that local newspaper editor Lisa stepped up as the lead litigant against Google, demanding billions.

We met at the Rideau Hall Foundation’s local publisher meet-up on Prince Edward Island, where I was speaking.

Ricky: Tell me about your paper.

Lisa: We’re a family-owned business, started in 1930, in a tiny town with a population of 5,600 people. It was a coal mining town, very ethnically diverse.

Italians, English, Czech, anybody who was Eastern European and knew how to mine came here back in the day.

Ricky: Is that where you’re from?

Lisa: Yeah. My children are fifth generation. My family immigrated from Poland, so we’re steeped in the community. The owner Buddy bought into the paper in 1950, and my mother started working for him.

They went into partnership in 1969 and worked at the Pass Herald until they both passed away, in 2015 and 2017. They left it to me as a legacy.

Ricky: Wow. You inherited it.

Lisa: I did, yeah. I started working there when I got out of university when I was 26.

Ricky: How many staff?

Lisa: We now have four, but when things were good, we had eight. I’m also on the board of the Alberta Weekly Newspaper Association (AWNA), so, I’m running the paper, on the town council, and wearing a few hats.

Ricky: But you could feel something was going wrong in publishing?

Lisa: Oh yeah. In 2014, we started doing Google advertising. The first cheque I received was for 17 cents. It was nothing.

“I couldn’t believe I was opening up my website and seeing Google’s ads all over the place and being paid 17 cents.

“It was really disturbing. Then, I watched our national advertising start to shrink dramatically.

Ricky: Can you give me an example?

Lisa: Half our revenue then was coming from what we called national advertising. It would be Ford, GM, Dodge, and Chevrolet. They were doing full page ads, and things were great. We had a thriving business.

Since 1999, my gross revenue has dropped two thirds today.

Ricky: Were those national advertisers buying direct, or coming to you through agencies?

Lisa: Agencies. At that time, AWNA had a rep who sold ads for all the papers, but then we started losing them.

Ricky: Can you remember when you noticed?

Lisa: We’d get a GM ad every week, full page. We’d get a full-page Ford ad every two weeks.

All of a sudden Ford dropped out. I asked AWNA why and was told the client pulled them because we didn’t have a dealership in our community, but the ads had actually moved to Google and Facebook.

Google began by hitting the region’s tiny newspapers first. The ads just stopped. By 2016, the ads were all gone. There was nothing. It was a fast slide.

Ricky: How badly were you hit? Did you lose all 50 per cent?

Lisa: Yeah, and we were heavily reliant on them. It meant we couldn’t pay the bills.

They were also important because they meant we were able to worry less about local ads, meaning we could cover local stories without worrying we would upset an advertiser. That’s a big issue for local reporting.

Ricky: National ads meant you could report freely, unfettered?

Lisa: Exactly, and I was watching it happen. I told AWNA we needed to change our business model.

We needed to stop relying on national ads and become more community ad focused or we’d lose the papers. They laughed at me.

So, I started a push on community advertising, walking the streets myself. Delivering the papers myself…

Ricky: Fascinating. When was this?

Lisa: About 2017.

Ricky: You had seen the writing on the wall?

Lisa: Yes, and nobody else noticed.

Ricky: I call this Cassandra complex. Why do you think people didn’t listen?

Lisa: Cognitive dissonance. If something scares you, you don’t want to know about it. They were myopic, just worrying about what was going on in their lane. But I could see it. I could see paper after paper losing their national ads, and it was spreading geographically. It took about two years for everybody to lose their ads.

Ricky: Did the agencies realise Google was behind it?

Lisa: No, they never said that. They said it was our location, or the advertiser was cutting spending… I don’t think they really understood what was happening either.

Ricky: How big a crisis was it in your community?

Lisa: I didn’t take a paycheque for a year. I worked for free. I cut two staff. I started delivering the paper myself…

Ricky: Alright, so let’s stop and talk about your passion. I’m assuming you’re absolutely f***ing furious at this point.

Lisa: Yeah. I’m really mad.

Ricky: And you’re breaking your back to keep it going. Why?

Lisa: It was a legacy thing. My family had loved it and built the paper. As a child, I told everyone my mom owned a newspaper. It was so cool. Still is.

It’s more than a job. It’s about doing right in the world. I truly believe we are the check and balance of democracy. That means something to me.

I worked hard at school. I have three degrees, but I’m making no money, so I have to believe.

It also afforded me the opportunity to be a great mom because in a community newspaper like this I’m at my kids’ concert, because I’m covering it for the paper.

Ricky: Bravo. So you’ve decided you’re going to fight. You’ve lost half your revenue to Google. Agencies are telling you any old story, but they’re clueless too. What happens?

Lisa: I got pissed off and that’s when I went to AWNA to see what they were doing to salvage this? What were they doing in advocacy to call out Google and Facebook?

I joined the board, then became the vice president. I’m President now.

Ricky: I’m not surprised.

Lisa: You either like me or you don’t, and I’m OK with that. My special power is I’ll tell the Prime Minister he’s an a**hole to his face if I truly think he was. I don’t hold back.

Ricky: That’s why you’re the perfect lead litigant. Where did the class action come from?

Lisa: A director at AWNA told me a law firm wanted to sue Google and Facebook, but nobody would talk to them. Nobody would step up to the plate. I said, sure.

Ricky: What were you expecting?

Lisa: I didn’t really know, but I knew I was pissed off with 17 cent cheques. We were too small to make money from platforms, and we had lost our national advertising.

Ricky: You were stuck in the infamous Valley of Death…

Lisa: As a local paper, we were really hit. Bigger papers took money from Google. It was a pittance, but they were getting something, like the Google News Initiative...

We just weren’t. We weren’t big enough to be on their radar, but I knew how important we were. That just pissed me off even more. Then the lawyers, Sotos, came on board.

Ricky: Ok…

Lisa: They said they needed someone to have the guts to do it. Three minutes in and I told them it was me. We’re doing this, I said. Give me the paperwork. I’ll sign it tomorrow.

Ricky: Just like that?

Lisa: Hell yeah, just like that.

Ricky: OK, stop. There are class actions all over the world, but it’s getting almost no news coverage. Papers aren’t writing about it, even though some know it exists. Very few publishers are showing the courage to step up like you, even though lawyers have the funding and are raring to go.

Billions and billions and billions and billions of dollars are up for grabs, as well as the fundamental principles of fairness, competition, justice, and punishment. 

Why do you think there is so little energy? Is it fear?

Lisa: When I launched this, some members of AWNA implied I should step down. They felt I should stay in my swim lane. I was making a lot of waves.

At the time, Google was paying some papers, but the money was never reaching the smaller titles. I had to make sure that small newspapers got their fair share too.

Ricky: You’re referring to the payments Google was making prior to the Canadian Government cutting the $100 million deal in its news bargaining code, right?

Lisa: Yes, but none of it was coming down the line to us. Every weekly newspaper in the country was being crushed by Google and Facebook. These are valuable weekly newspapers, some 100 years old, but all were being left out of the funding. I went to bat for all of them.

As Lisa planned her action, she was surprised to find it hard to get other publishers to join.

Ricky: What did they tell you? Were they eager?

Lisa: No, they gave me nothing. Crickets. And I don’t know why, for the life of me. Maybe it was fear.

It’s like being a beaten dog. They get a scrap of food every couple of days, and they’re so willing to take it, that they’ll eat the other dog to get there.

It was like Lord of the Flies. Close up, it looked so tiny, but viewed outwards, and it was gigantic in scale. They just couldn’t see it. I could. I said guys, this is happening.

Ricky: How many publishers were caught up in this?

Lisa: There were more than 1,000 community newspapers in 2022, fewer now, and then 76 dailies, across 176 publisher groups.

Ricky: And you’re seeking $8 billion in total. $4 billion from Google. So, 1,076 publications divided by $4 billion is $3.7 million per publisher. The majority of these publishers are small. How transformational would $3 million be to you?

Lisa: Well, I’ve lost well over a million, and if I add the cost of living, it’s closer to $1.5 million. I’m only actually recouping what I’ve lost.

The rest can be for all of the sh** and abuse that they’ve put me through, and the strain of the past few years and the lost wages.

Then there’s laying off people who worked with us for 20 years, stuffing flyers when I’m 50 years old...

Ricky: You’re Erin Brockovich. You’re going to make them pay.

Lisa: Yeah. I am.

Ricky: So, let’s say $3 million comes back. What will you do with it?

Lisa: My worry is that this has left a lot of publishers so exhausted that they will just shut down. I don’t want that to happen either.

If we can get a $3 million payout and change the way that Google and Facebook do business, publishing can be viable again.

That means many might see a window to sell. Right now, you can’t give a newspaper away.

Maybe there are opportunities for new young people interested in the industry to come through. I don’t know.

Ricky: Do you care if the future is in print, or is this about a pivot to digital? How do you feel about that?

Lisa: There’s something lost when local news is digital. History is never truly archived somehow.

It can be lost, and history manipulated, but can’t change what’s on paper.

My favourite part of the day is walking into the office on a Wednesday morning to find the paper still wet, and I can smell the ink. There’s something in that.

Lisa’s court case initially sued both Meta and Google, alleging the two conspired together in a project called Jedi Blue to suck advertising dollars from publishers.

The judge in an earlier hearing cleared the case to sue Google, but not Meta. The suit demands $4 billion from each for a total of $8 billion. Lisa and the lawyers filed an appeal to drag Meta back into the case last week.

Lisa: It’s frustrating, but we’ll get them.

Ricky: How did you come up with the $8 billion number?

Lisa: That was my lawyers. They say it’s for 10 years of losses.

Ricky: That would make it one of the largest damage payouts in human history.

Lisa: It feels like I’m a movie right now.

Ricky: OMG, you are. You’re Erin Brockovich.

Lisa: And that bothers Google, right? They thought I was stupid, which is something I get a lot. I look a certain way, so they dismiss me as dumb.

Ricky: They think you’re fearful.

Lisa: Oh yeah. Fearful and stupid.

Ricky: But…

Lisa: Smart people are smart. It doesn’t matter how you look. And I’m smart, and I’m aggressive

Ricky: Google doesn’t like taking it on the chin from real people. They’re not used to it.

Lisa: Oh yeah, for sure. When they walked into court that first day, with their fancy shoes, I was sitting in the back. They asked me: Who are you?

I said: I’m the Pass Herald, and the judge said: ‘It’s you who is suing for $4 billion?’ Yep, I said, that’s me.

When I’m mad, I’m laser focused. I’ve never quit a thing in my life, and I will not quit this. I will not be bullied by anybody.

But it’s not about just the money. The money’s great and all, but I want them to have to change the way they do business, and admit they were wrong. That matters more.

Ricky: It’s up to us.

Lisa: 100 per cent. I’ve sacrificed so much to be a mom and have a meaningful career. I’ve thoroughly enjoyed it, and done it well.

But I believe things happen for a reason. I’m here doing this for a reason, and now I have done all that, I can focus on pissing off Google and Facebook.

Ricky: Tell me about meeting them face-to-face in court.

Lisa: Oh, that was great. I don’t think they thought it was going to get this far. They dismissed me, and that pissed me off more, so flew down to the court in Toronto…

Ricky: Were you nervous?

Lisa: None of them make me nervous. They came in with their fancy suits. It was a whole tranche of lawyers, maybe 10 of them.

My lawyer said: We’re representing the Pass Herald, and she’s sitting in the back of the court.

Google’s lawyers turned around and looked at me, and their faces dropped. It was worth a million dollars. They had no clue I was coming.

Ricky: You turned the tables?

Lisa: By being there, I put a face to something. This wasn’t an ambulance chasing lawyer after a settlement, this was a real human.

Their lawyers were just to make money, but I was the real deal, from a little town putting a face to the damage. It was one of the greatest experiences of my life.

Ricky: Why do you think they were so rattled?

Lisa: I don’t think that they actually thought that I would care enough. They thought it was a frivolous lawsuit.

They didn’t think people in Canada were smart enough to do this. That we were just a bunch of backwards heathens. They underestimated us.

Ricky: You think that they think they’re smarter than the rest of us?

Lisa: 100 per cent, but I showed them that the world stinks because of them, and someone was willing to call them out.

I had three lawyers there. I was so proud of them. They had an answer to everything.

Ricky: Fearless?

Lisa: They were brilliant. We’re a team, and we all have skin in the game. I prop them up and they do the same for me. Every time we hit a roadblock, we bypass it and keep going. We got this.

Ricky: What was the hearing for?

Lisa: It was a strike motion from Meta and Google. They wanted the case to be refused. They said none of the decisions were made in Canada so it shouldn’t be a Canadian case.

We lost on Meta, but we filed an appeal last Monday. The judge has already ruled the Google case will go ahead.

Ricky: So, it’s happening...

Lisa: It will go back to court early next year.

Ricky: How are you feeling? How are the energy levels?

Lisa: I’m here for the long haul. I know it could be a five-to-eight-year slog. We all knew that from the beginning. If I don’t step up, this isn’t happening. If I don’t step, local news loses again.

I’m an excellent poker player. I’ll take them all the way. I’m not even close to being done and I will live for a long time yet. My goal is to shut them down.