(Photo: Jason Doiy/ALM)
U.S. newspaper publishers, who say they are chafing under the market power of Google and Facebook, are calling on Congress to allow them to negotiate collectively with the online giants.
They want an antitrust exemption so they can compete more effectively with what they term a de facto “digital duopoly,” which now dominates online advertising.
“The objective is to permit publishers to have concrete discussions with the two dominant distributors of online news content, Google and Facebook, on business model solutions to secure the long-term availability of local journalism produced by America’s newsrooms,” the News Media Alliance said in statement released Monday.
The organization counts roughly 2,000 publications, including The New York Times, the Wall Street Journal, and the Washington Post, as well as regional publications that were formerly print-dominated and are now struggling to compete with Google and Facebook as they transition to digital.
“The duopolistic dominance of online advertising by Google and Facebook could do far more damage to freedom of the press than anything President [Donald] Trump tweets,” David Chavern, president of the alliance, wrote in an opinion piece published in the Wall Street Journal.
“The problem is that today’s internet distribution systems distort the flow of economic value derived from good reporting,” Chavern wrote. “But the two digital giants don’t employ reporters: They don’t dig through public records to uncover corruption, send correspondents into war zones, or attend last night’s game to get the highlights. They expect an economically squeezed news industry to do that costly work for them.”
Newspaper ad revenue is down from nearly $50 billion 10 years ago to $18 billion in 2016, according to a Pew Research Center analysis. In the aggregate, Facebook and Google control more than 53 percent of the digital ad market in the United States, according to eMarketer. Collectively they’re estimated to control more than 80 percent of U.S. internet advertising growth.
Seeking a federal antitrust exemption is easier than getting one, and would likely require a lawmaker, or group of them, to take up the cause and draw up legislation to propose. An antitrust designation is usually reserved for companies or industries that do not practice typical commerce. Professional sports leagues like the National Football League and Major League Baseball have them, as do labor unions and the insurance industry, because the public interest is judged to be served better by a single entity or limited group.
Facebook and Google have acknowledged the pressures facing the news industry, and have backed programs to support local journalism. Facebook has struggled in its role as a de facto news leader, and has staff members and algorithms in place aiming to limit hoaxes, violence and “fake news” that users try to distribute through the social media network.
“We’re committed to helping quality journalism thrive on Facebook. We’re making progress through our work with news publishers and have more work to do,” said Campbell Brown, head of news partnerships at Facebook, said in a statement.
“We remain deeply committed to helping publishers with both their challenges, and their opportunities,” Google told the Los Angeles Times.
The problem is not limited to the United States. The European Union’s antitrust regulator two weeks ago fined Alphabet’s Google a record $2.71 billion for favoring its own comparison-shopping service.
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