POLITICS
06/11/2019 20:05 EDT

Congress Weighs Limits On Market Power Of Facebook And Google

Members of both parties agreed that action is needed to address the threat news publishers face from Big Tech.

Congressional lawmakers want to help the news media stay afloat as it faces extreme financial pressure from the rise of Facebook, Google and their online advertising duopoly.

The collapse of the news industry at the hands of those digital behemoths was the topic of Tuesday’s hearing before the House Judiciary Committee’s antitrust subcommittee. And for a rare moment, lawmakers from both parties seriously questioned committee witnesses about a pressing concern in American life and largely agreed on the needed solutions. 

Rep. David Cicilline (D-R.I.), the subcommittee chairman, presided over the hearing. His panel is beginning a broad re-examination of the nation’s antitrust laws and how they can address the market power of the most highly capitalized corporations in the country. This investigation has bipartisan support from the Judiciary Committee chair, Rep. Jerrold Nadler (D-N.Y.), and the committee’s ranking member, Rep. Doug Collins (R-Ga.).

Tuesday’s hearing was built around bipartisan legislation offered by Cicilline and Collins. Their bill would allow news publishers to band together in order to negotiate with digital platforms like Facebook and Google that are monopolizing the online advertising market. Current antitrust laws forbid news publishers from working together in that way.

Tom Williams via Getty Images
Rep. David Cicilline is leading a major investigation into the market power of tech platforms as chairman of the House antitrust subcommittee.

“The current antitrust laws protect Google and Facebook from us,” said David Chavern, president of the News Media Alliance, a trade group for thousands of large and small newspapers. 

Chavern endorsed the chairman’s bill as a short-term means of saving an industry “in crisis.”

“This bill is a life support measure, not a plan for longtime health,” Cicilline agreed. 

Throughout the hearing, committee members shared stories about the struggles of their local papers in disparate communities, from the urban Seattle of Rep. Pramila Jayapal (D-Wash.) to the rural North Dakota of Rep. Kelly Armstrong (R-N.D.).

In the past 15 years, local newspapers have closed in more than 1,400 cities and towns due to a collapse in advertising revenue. Pittsburgh supplanted New Orleans as the largest city without a daily print newspaper in 2018.

The problem is that over that same period of time, much of the advertising revenue that once went to print news publishers was redirected to online platforms. In even more recent years, Facebook and Google have sucked up almost all of the new online advertising dollars at the expense of all other publishers.

This duopolization of online ad money hasn’t just hit local newspapers with layoffs and closures. It’s also hurting online publishers like HuffPost and BuzzFeed.

We should be worried about losing newspapers, the fountainheads within the local news ecosystem. It is worth considering stories that would go untold.Kevin Riley, editor of the Atlanta Journal-Constitution

In terms of protecting the news media’s long-term health, committee members and hearing witnesses discussed options ranging from using existing antitrust laws to break up the online platforms and increase competition, to mandating interoperability between platforms, to changing the liability protection granted to platforms by Section 230 of the Communications Decency Act.

David Pitofsky, general counsel for NewsCorp ― the media conglomerate that owns The Wall Street Journal, HarperCollins Publishing and Fox News ― said that Congress needs to “follow the money” to examine how these digital giants monopolized advertising money through their control of ad tech platforms.

House lawmakers are concerned about more than the damage done to a local industry. The collapse of news publishers due to the loss of ad money is causing a collapse in local accountability. Studies show that municipalities that lose their local papers see an increase in corruption and an increase in government borrowing costs (possibly due to the decrease in information about and quality of the local government).

Kevin Riley, the editor of the Atlanta Journal-Constitution, testified about the blockbuster report his paper produced on standardized test cheating in Atlanta public schools. It was a report that only a local newspaper with significant resources could pull off.

“We should be worried about losing newspapers, the fountainheads within the local news ecosystem,” Riley said. “It is worth considering stories that would go untold.”