The House Judiciary antitrust subcommittee kicked off long awaited antitrust hearings, with the first one focusing on the impact that social media giants like Facebook and Google have had on the news industry.
Separately, both the Justice Department and Federal Trade Commission have started preparing for their own investigations.
News outlets, particularly those that haven’t been well established outside the digital realm, have been screaming for congress to at least take a solid look at what the megalithic media giants have been doing.
News companies across the board have been accusing Google and Facebook, along with their subsidiaries and competitors, of smothering “publishers’ ability to profit off their own journalism,” Politico writes.
The bottom line has been “a tsunami of layoffs, buyouts, closures and consolidations while digital ad dollars flow to the two online giants.”
As David Chavern, president of the News Media Alliance asserts, Google and Facebook are “potentially existential threats to the news industry.” NMA represents “about 2,000 print and online news outlets,” one of them is The New York Times.
Referring to a recent study which estimates that, “Google made $4.7 billion in revenue in 2018 by scraping content from news publishers,” Chavern explains what that shows is “more money goes back to Google and not the publishers producing the content.”
House Judiciary antitrust subcommittee Chairman David Cicilline weighed in by stating:
“Whether it’s an online publisher or local newspapers, we cannot have a democracy without a free and diverse press.”
“Our country will not survive if we do not have shared facts, if corruption is not exposed and rooted out at all levels of government, and if power is not held to account.”
David Pitovsky, who’s the main attorney for News Corp. — publisher of The Wall Street Journal and the New York Post — agrees:
“free-riding by the dominant online platforms has resulted in a massive siphoning off of profits.”
Not everyone is in favor of full-on antitrust action though. Cicilline and fellow committee member Doug Collins are backing the “Journalism Competition and Preservation Act.”
As David Chavern told Politico:
“the measure would give publishers a chance to shape how their content generates revenue, who controls data collected from readers and how tech companies prioritize certain stories over others.”
The proposal would grant a four year extension to allow negotiations. It also has opponents.
Matt Schruers, with the Computer & Communications Industry Association, called the bill “ill-advised,” pointing out that it “runs counter to U.S. antitrust norms and would disrupt an otherwise functioning market economy.”