Antitrust cases against Google and Facebook are gathering steam, with new revelations and progress in what should be pivotal lawsuits against big tech.
This is critical to saving local journalism. Ending unfair competition by dominant online companies is necessary to revive America’s independent, free-press system.
Local newspapers are generally on their way to transitioning to digital advertising. They also depend on tech platforms to market themselves, reach new customers and provide a suite of advertising products.
Yet this evolution toward new and sustainable business models is hindered when two companies monopolize and manipulate digital ad markets to their advantage, as alleged in state, federal and private antitrust cases.
This skewed situation also helps explain why newsroom layoffs and closures continue, despite soaring readership during the pandemic.
Google, which dominates the primary system for buying and selling online display ads, manipulated the system and deceived advertisers, according to material unsealed Friday in a case brought by a Texas-led coalition of state attorneys general.
If affirmed by courts, this would mean more than just publishers were harmed. Such conduct harms consumers in general because it leads to higher prices and fewer product choices.
That came a few days after Facebook received a major setback in another federal court, where a judge decided that the Federal Trade Commission made valid arguments that Facebook abused its monopoly and the FTC’s antitrust case should proceed.
One of the most troubling revelations in the cases are allegations that Google and Facebook made a secret deal that stifled competition.
“Look, we’ve got a home run here,” Michael Fuller, a Puerto Rico-based attorney representing a coalition of newspaper publishers pursuing a private antitrust against the companies, told me this week.
Around 35 publishers who own more than 250 publications are part of the case, which is for now paired with the Texas-led states’ Google case before U.S. District Senior Judge P. Kevin Castel in New York.
Both companies vigorously deny allegations. The companies are also pushing back on an array of antitrust legislation proposed in Congress, including a bill to prohibit self-preferencing by large platforms that will be considered Thursday, Jan. 20, by the Senate Judiciary Committee. In advance, Google’s chief legal officer, Kent Walker, on Tuesday launched a broadside against the antitrust bills, blogging about their “harmful consequences.”
For those looking to save local journalism, all of the above are necessary: Successful enforcement of antitrust laws to level the playing field and regulatory reform to ensure fair competition going forward.
Newspapers also need to be fairly compensated by others profiting from their investments in journalism. Australia and some European countries are addressing this with policies requiring Google and Facebook to negotiate content licensing arrangements; a similar proposal was made in Congress last year but hasn’t yet proceeded.
While antitrust efforts seem to have momentum and more attention, they will take years to resolve and implement any changes.
In the interim, first aid is needed to stop the bleeding, such as temporary tax credits to save remaining local journalism jobs. Otherwise, the patient may not be around long enough to be helped by the longer-term cures being pursued in courts and Congress.
Chicago merger proceeds: A high-profile effort to sustain local news coverage advanced this week, when Chicago public-radio station WBEZ finalized its decision to acquire the Chicago Sun-Times newspaper. The Sun-Times reported that it will create one of the largest nonprofit news organizations in the country; WBEZ leaders last year said the deal could lead to 40 to 50 new hires. This follows the sale of The Chicago Tribune and Tribune Publishing to hedge fund Alden Global Capital, which offered buyouts at the Tribune shortly after closing the deal last May. As I wrote last year, this is like a large scale version of Seattle’s KCTS acquiring the Crosscut news site in 2015.
This is excerpted from the free, weekly Voices for a Free Press newsletter. Visit the new Save the Free Press web site here.
The opinions expressed in reader comments are those of the author only and do not reflect the opinions of The Seattle Times.