Technology

Media groups divided over bill targeting Google, Facebook digital ad market power

A proposal aimed at giving news publishers the power to bargain with dominant tech platforms over the distribution of their content is dividing media groups, with some advocates arguing the proposed solution could actually hurt small and local outlets it aims to help. 

Members of the Senate Judiciary antitrust subcommittee also clashed over the proposal during a Wednesday hearing, despite a version of the bill being introduced last year with bipartisan support.

Subcommittee Chair Amy Klobuchar (D-Minn.), who co-sponsored the Journalism Competition and Preservation Act (JCPA), said the proposal would help ensure the survival of local news outlets amid the ongoing rise of digital ad revenue “titans” Google and Facebook.

But ranking member Sen. Mike Lee (R-Utah) bashed the proposal as a misguided effort and suggested that at least some news publishers are facing issues because they failed to take into account evolving technology to adapt their business models. 

He also said the proposal could lead to a news “cartel,” a concern also raised by some of the witnesses at the hearing and by public advocates who sent a letter to the senators warning against the bill. 

“News giants with the greatest leverage would dominate the negotiations and small outlets with diverse or dissenting voices would be unheard if not hurt,” a group of public interest advocates wrote in a letter to Klobuchar and Lee.

The signatories wrote they “wholeheartedly support the aims of the bill” but fear it would “entrench existing power relationships among both news organizations and digital platforms and alter the free and open nature of the internet.” 

The letter was signed by Common Cause, Copia Institute, Creative Commons, Fight for the Future, Free Press Action, Library Futures, Medical Library Association, Public Knowledge and Wikimedia Foundation, as well as Aram Sinnreich, the director of communication studies at American University. 

Harvard Law School lecturer Daniel Francis, a witness at Wednesday’s hearing, also warned the bill could lead to a national news cartel that he said in itself would become a monopolist. 

Hal Singer, managing director of Econ One Research, disputed the argument. 

“The concept of creating a cartel here is laughable and uneconomic,” Singler told the panel. “The newspapers and news publishers generally would not be getting coordination rights in their dealings with consumers. If they got together and tried to set prices for users they would go to jail. The coordination rights that are being delivered here are narrowly tailored here to pertain to only the news publishers’ dealings with the dominant platforms.” 

The JCPA was reintroduced in both chambers last year, by Klobuchar and Sen. John Kennedy (R-La.) in the Senate and by Antitrust Subcommittee Chairman David Cicilline (D-R.I.), subcommittee ranking member Rep. Ken Buck (R-Colo.) and Rep. Mark DeSaulnier (D-Calif.) in the House. Klobuchar said lawmakers are working to amend the proposal.

To illustrate the dominance of tech giants in the digital ad space, Klobuchar pointed to Google’s quarterly revenue report released Tuesday, which showed that it brought in $61 billion in ad revenue in the last three months of 2021. 

The bill would establish a temporary four-year safe harbor from antitrust laws for news outlets that allow publishers to negotiate with digital content distributors, such as Google and Facebook. 

Jennifer Bertetto, the president and CEO of the Pittsburgh-based Trib Total Media, testified Wednesday that the proposal would give small and mid-sized publishers a “seat at the table” to negotiate with Facebook and Google — companies she said act as “gatekeepers” controlling access to the content produced by journalists. 

Joel Oxley, general manager of WTOP News, said those issues are plaguing local broadcast news, too. 

“The dominant online platforms have flourished, siphoning off huge amounts of advertising revenues that are the lifeblood of free, local journalism,” he said. 

He also said tech platforms “commoditize news content with little regard for the quality and veracity of the story,’ placing “fact-based reporting like ours on part with unsubstantiated click- bait.” 

The News Media Alliance, a trade association representing about 2,000 newspapers, strongly backs the proposal. The president and CEO of the association, David Chavern, in a statement called it the “solution that will help sustain high-quality journalism and therefore our civic society.” 

But the National Newspaper Publishers Association, a trade association of more than 200 African American-owned community newspapers, is also expressing concern about the proposal.

In letters sent to his home state Sen. Cory Booker (D-N.J.), Congressional Black Caucus Chair Joyce Beatty (D-Ohio) and House Whip Jim Clyburn (D-S.C.), the association’s president and CEO, Benjamin Chavis, warned that the proposal “would ultimately weaken our ability to sustain our positions as pillars of the community, including our ability to collaborate with companies across industries to pioneer new programs that will help us tell our community’s stories in new and exciting ways, and create a more sustainable future for our industry.” 

The tech giants targeted in the proposal have defended their roles working with publishers, but have largely left the stronger public attacks to industry groups for the time being.  

“Publishers choose to share and make their stories available on Facebook because they get value from doing so. We’ll continue to work with publishers, leaders and other stakeholders on proposals that benefit the news and its readers,” a Meta company spokesperson said in a statement. 

“There are many complex and systemic challenges facing the news industry, and the economic effects of the pandemic coupled with the slow evolution to digital-first business models factor heavily into the equation,” Google spokesperson Charlotte Smith said in a statement. “A sustainable future for the news industry requires continued innovation, sensible regulation, and the public and private sectors to work together. We remain committed to doing our part.”

The tech giants fought a similar battle in Australia last year when the country passed a law allowing media companies to request payment from Google and Facebook.

Both California-based tech companies fought back against the proposal fiercely. Google threatened to cut its services in Australia, and Facebook for a brief time restricted access to news content in the country.

Tags Amy Klobuchar Common Cause Copia Institute Cory Booker Creative Commons David Cicilline Econ One Research Facebook fight for the future Free Press Action Google John Kennedy Journalism Competition and Preservation Act Joyce Beatty Ken Buck Library Futures Mark DeSaulnier Medical Library Association Mike Lee Public Knowledge and Wikimedia Foundation

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