Global Antitrust Regulators Are Fighting Big Tech’s Destruction of the Journalism Industry; Will the U.S. Also Act?
In his New York Times column on Sunday, former founding editor at BuzzFeed News Ben Smith, describes actions by Australian and French regulators to force Google and Facebook to compensate news outlets for using their content. Smith argues that these moves have “set off a chain of events that could shift the balance of power between big tech and the news at a dire moment for journalism.”
These welcomed moves need to extend to the United States and go beyond fights over the tech giants’ use of news content to the real battlefield: the tech companies’ platform dominance and the control that gives them over the online marketplace. In particular, we have repeatedly highlighted how Google’s ability to make unilateral changes to Chrome gives it an unfair advantage over news publishers in their competition for digital ad revenue.
But there are signs that the ground may be shifting in the U.S. Major antitrust investigations targeting the major tech companies are underway in Congress, the Department of Justice, and among large coalitions of state attorneys general. And economic policy experts are making striking analogies between the tech companies and heavily regulated platform monopolies.
For example, former top Clinton and Obama economic adviser Gene Sperling, writes in his piece for the Atlantic, “Punching Steph Curry:”
“No one doubts that, like railroads, big tech companies in many ways improve people’s lives with their services. Yet our existing market rules allow them to exploit dependency on their critical digital networks and platforms to use significant pressure—not superior innovation—to dominate potential competitors.”
Google’s total system dominance over the online marketplace makes it more like the railroad and Standard Oil put together. Google’s Chrome browser, like the railroad, is the infrastructure on which the majority of consumers access news websites. That allows Google to set the rules, like when it changed Incognito Mode explicitly to defeat news websites’ limits on free articles, or its planned phase out of third-party cookies which its own study found would reduce ad revenue for news publishers by 62%.
Google’s power doesn’t end there. Its ubiquitous search engine is the commodity, like oil, that news outlets need to survive because it drives so much referral traffic. Google requires news publishers use its Accelerated Mobile Pages (AMP) to rank highly in search results. AMP gives Google more user data and produces less revenue for news outlets. And Google’s dominant position at every layer in the digital ad marketplace is like it owning the oil refineries too. This lets Google play by a different set of rules in the ad marketplace it controls, allowing it to produce ad revenue that UK regulators found was “consistent with the exploitation of market power.”
The following is a statement from Laura Bassett, former Senior Politics Reporter at HuffPost and co-founder of the Save Journalism Project, :
“Google and Facebook’s ability to buy their way out of more regulation may be ending. Global regulators are taking real action, and with a pandemic ravaging the world, the news industry is finally beginning to win more and more battles. But the most important battles need to be won right here in the United States. Our local news is hanging on by a thread while they use what little resources they have left to keep their communities informed during a public health crisis. We are encouraged that this is getting more attention and influential economists are raising regulation on the scale of the railroads. Let’s hope real regulatory action comes in the United States before it’s too late.”