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posted on 2020-10-27 20:20:00 .
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The decimation of local media is by now a sad, familiar tale experienced by tens of millions of Americans all over the country. In a report released today, the Senate Commerce Committee’s top Democrat is laying blame for the bloodbath squarely at the feet of Google and Facebook, claiming the companies have participated in destroying local news in the pursuit of monopolizing monetization.
Sen. Maria Cantwell (D-Wash.) released the scathing new report (PDF) today, ahead of a scheduled hearing Wednesday in which Twitter CEO Jack Dorsey, Google CEO Sundar Pichai, and Facebook CEO Mark Zuckerberg will be testifying.
It is true that the advertising streams that funded local newspapers before the advent of the Internet changed dramatically in the 21st century as news went digital. Even so, the report says, outlets could have been able to manage except that “local news has been hijacked by a few large news aggregation platforms, most notably Google and Facebook, which have become the dominant players in online advertising.”
“These trillion-dollar companies scrape local news content and data for their own sites and leverage their market dominance to force local news to accept little to no compensation for their intellectual property,” the report goes on. It explains:
The platforms use their market position to force local news into “take it or leave it” contracts, which limit the ability for local news companies to be fairly compensated. If a news outlet wants a summary of its content featured in mobile formats created by the platforms, the news outlet typically must agree to a contract that allows the platforms to obtain the content without fair financial compensation and collect user data from those who view it, among other provisions. The benefit to the news outlet is the possibility that readers will click on a link to its site to learn more. However, this arrangement also results in a disproportionate share of overall advertising revenue flowing to the platforms instead of the content creators on their individual news sites, where building a relationship and traffic is key to sustaining long-term revenue. The popularity of the major news aggregation platforms with readers means they can push local newspapers into providing local news content to them under these unfair terms.
A big and familiar problem
Cantwell’s findings echo the findings of a blockbuster antitrust report published by the House antitrust subcommittee earlier this month.
“Despite significant growth in online traffic among the nation’s leading newspapers, print and digital newsrooms across the country are laying off reporters or folding altogether,” the House report observed. “The digital advertising market is highly concentrated, with Google and Facebook controlling the majority of the online advertising market in the United States… News publishers have raised concerns that this significant level of concentration in the online market—commonly known as the digital duopoly—has harmed the quality and availability of journalism.”
The new report cites both the House report as well as several other active investigations that state, federal, and international regulators are currently conducting into tech firms’ business practices.
Antitrust investigations, however necessary, are slow, Cantwell notes. Even if the Federal Trade Commission, Department of Justice, or state attorneys general take action to mitigate the harms Google and Facebook cause to local journalism, the change might come too late. Congress, she suggests, should take steps more quickly.
So what to do?
First, the report suggests, Congress should act immediately to provide additional COVID-19 relief to individuals and institutions, including making local newspaper, radio, and television outlets eligible for support. A COVID relief bill would help stanch the immediate bleeding: in journalism as in many sectors, COVID-19 took what was a building crisis and made it a catastrophe. The Poynter Institute has kept a running list of layoffs, furloughs, and closures in print, broadcast, and digital media this year, and the numbers are ugly.
Cantwell’s report also suggests that Congress “should consider requiring that news aggregation platforms enter into good-faith negotiations with local news organizations and pay them fair market value for their content.”
Competition regulators in other nations have tried enforcing similar mandates in the past decades, and Google has fought furiously against them all. France and Google, for example, have been in a protracted fight for years over a law in that country that requires Google to pay to link to articles on French news sites.
Most recently, the Australian Competition and Consumer Commission—that nation’s equivalent of the FTC—proposed a draft rule that would allow Australian media outlets to bargain with Google and Facebook to get paid for their news content. Google responded by launching a campaign targeting consumers who visited Google or YouTube from inside Australia that popped up warning labels about the proposed law and the effects it could have on users.
On October 1, Google seemingly tried to mollify regulators worldwide with a $1 billion investment in a “news showcase” that compensates outlets for their content. The tool is debuting in Germany, Brazil, Argentina, Canada, the United Kingdom, and Australia—all places where regulators have tried to force Google to pay for content before.
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