By Keach Hagey
Some Senate Democrats are seeking to enable regulators to
protect local news outlets, accusing tech giants such as Google and
Facebook of "unfair business practices," according to a new report
by members of a key committee that will hear from the top industry
executives this week.
Released on the eve of the Senate Commerce Committee's hearing
Wednesday with the chief executives of Alphabet Inc.'s Google,
Facebook Inc. and Twitter Inc., the report argues that local
journalism is in a crisis -- badly exacerbated by the coronavirus
pandemic -- partly because of alleged anticompetitive behavior on
the part of the tech platforms that ought to be policed by the
Federal Trade Commission.
"They are facing unfair practices," Sen. Maria Cantwell (D.,
Wash.), the ranking member on the committee, said in an interview.
"We think Congress and the FTC should address those unfair
A Google spokeswoman said the report "distorts the reality
around Google's role in the online news ecosystem and the value
that we provide to publishers who face challenges in transitioning
to the digital world."
Facebook took issue with the report's allegation that tech
giants take local news content and data for their own sites, a
practice known as scraping. "The accusation that we scrape news
articles is simply not true," a Facebook spokesman said.
The report also proposed a range of other legislative changes,
including a law that would force tech platforms to negotiate with
local news outlets to ensure those organizations are paid for their
content, in much the same way that local TV broadcasters are paid
by cable and satellite companies for distributing their
Painting a grim portrait of the state of the local U.S. news
industry, the report noted that it had lost 70% of its revenue in
the past two decades, while today Google and Facebook control 77%
of local digital ad revenue.
The report argued that the FTC needs new authority now so it can
force Google and Facebook to change their practices, given that the
Justice Department's current antitrust lawsuit against Google could
take years to be resolved.
Democrats don't currently control committee business in the
Republican-controlled Senate. Criticism of the tech platforms has
been bipartisan lately, though Republicans tend to be more focused
on fears that the platforms are silencing conservatives.
Senate Republicans have been critical of the tech platforms'
influence over the publishing landscape. During a Senate hearing
last month, Republican senators including Mike Lee (R., Utah) and
Josh Hawley (R., Mo.) asked tough questions of a Google executive
about the search giant's dominant market power in the ecosystem of
tools that connect web publishers and advertisers. "This looks like
monopoly upon monopoly," Mr. Hawley said at one point.
The Senate Commerce Committee minority report cited practices
such as Google's requirement that publishers agree to put their
content on Google-hosted Accelerated Mobile Pages, or AMP, to
receive a decent search ranking on mobile. Publishers have
complained the technology deprives them of customer data and hurts
The report also argued that Google search, by using local
publishers' headlines and snippets without compensation and
increasingly answering queries on Google without pushing users
through to publisher websites, was abusing the original intent of
copyright law's notion of "fair use."
Publishers have complained about similar "take it or leave it"
dynamics with other Google products, such as Google News and Google
Discover, a feed of recommended content. In a report this summer,
the News Media Alliance, the news publishers' trade group, alleged
that Google's overwhelming market power has effectively deprived
publishers of the ability to enforce the copyrights to their own
material, since in effect there is no substitutable competitor they
would work with instead if they don't like Google's terms.
The Google spokeswoman said Google sends traffic to news
websites and its ad products help publishers make money. Google
also has reached agreements with selected publishers around the
world to license news content.
Citing multiple Wall Street Journal articles on the topic, the
report notes that while Facebook has made deals to pay license fees
to some publishers, they only cover about a quarter of the local
news services whose content Facebook displays in its news tab.
The Facebook spokesman said the company gives "news
organizations the ability to post news on Facebook free of charge,
and they have full control over how that content is accessed and
monetized." He also said Facebook has spent hundreds of millions of
dollars on programs and partnerships to help local news.
Wall Street Journal parent company News Corp has been among the
companies that have called for Google and Facebook to pay
organizations that provide quality news.
The report called on the Senate to pass a set of
coronavirus-relief measures similar to what the House passed
earlier this year, which would expand the kinds of local news
outlets that could qualify for Paycheck Protection Program
It also argued Congress should consider requiring tech platforms
to negotiate with local news outlets for use of their content, in
much the same way that Congress required cable operators to get
permission from broadcasters -- known as "retransmission consent"
-- before carrying their programming as part of the 1992 Cable Act.
Today the fees that local TV stations get from cable and satellite
companies are the engine of their growth, making up more than 40%
of their revenue, according to Moody's.
Local newspapers are "just too important a part of our democracy
and our economy to let continue to disappear," Ms. Cantwell
Write to Keach Hagey at email@example.com
(END) Dow Jones Newswires
October 27, 2020 19:37 ET (23:37 GMT)
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