Lawmakers Want to Protect Local Newspapers From Google, Facebook
By Keach Hagey
Some Senate Democrats are seeking to empower 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.
The report also proposed a range of other legislative fixes,
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.
"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
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, although that could change after the
election. Criticism of the tech platforms has been bipartisan
lately, though Republicans tend to be more focused on fears that
the platforms are silencing conservatives.
The 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 subscription rates.
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.
"This 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," said
Google spokeswoman Maggie Shiels, pointing to the traffic Google
sends to news websites, the role its ad products play in helping
publishers make money and the money it has paid to support local
news, as well as recent deals to pay for content overseas.
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.
Facebook declined to comment.
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," Sen. Cantwell
Write to Keach Hagey at firstname.lastname@example.org
(END) Dow Jones Newswires
October 27, 2020 05:14 ET (09:14 GMT)
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