We rely on a healthy news media to keep us informed and to ensure transparency from our leaders. But as news has moved online and brought audiences that are larger than ever, it has become clear that the digital deck is actually stacked against quality journalism.
For nearly a decade, a couple of technology giants — namely, Facebook and Google — have exerted unprecedented influence and control over the U.S. news industry. These tech giants, as well as others, now control both the distribution and monetization of online news content.
The platforms have this power over the news media because of the rate at which they’ve expanded in recent years. These companies have grown with the assistance of serial acquisitions and exclusionary conduct aimed at nascent competitors and technologies that threaten to supplant their positions. Therefore, we are pleased to see the Federal Trade Commission (FTC) is taking a closer look at the tech giants’ anticompetitive conduct.
Yesterday, the News Media Alliance submitted comments to the FTC for its upcoming hearings, in which we explain in detail how the platforms’ conduct impacts journalism and harms consumers.
Today’s News Distribution Landscape
Historically, news publishers had a direct relationship with their readers – they printed a product and then literally handed it to customers. Today, the vast majority of consumers find online news content through one of two sources: search engines and social media. Google and Facebook are monopolists in those two markets; together, they account for more than 80 percent of referrals to digital news publications.
Google and Facebook now control what news consumers around the country see. This puts them in a position of enormous — indeed, unprecedented — power. While the First Amendment prohibits the government from restricting the public’s access to particular sources of information, there is nothing stopping either Google or Facebook from doing the same thing.
The tech giants exploit this lack of oversight by using secret algorithms to decide which news articles appear in a user’s search results and social media feed, and they have the power to manipulate these algorithms to suit any purpose. In doing so, they make editorial judgments about the accuracy, relevance and newsworthiness of the content on their sites, including that being created and shared by news publishers.
Publishers have little to no leverage when dealing with the tech giants. Because the platforms have incredible market dominance, they have the power to dictate terms for the distribution and monetization of digital news content, and individual publishers have no way to resist.
The platforms are forcing the publishers’ hands. Publishers who don’t go along with Facebook and Google’s preferred programs will, without question, miss out on critical revenue streams. For example, when The Wall Street Journal pulled out of Google’s First Click Free program, its traffic from Google plunged 44 percent.
There have been some legislative efforts to help put news publishers on more equal footing by creating a limited safe harbor under the antitrust laws so they could collectively negotiate with big tech platforms; Congressman David Cicilline (D-RI) introduced the Journalism Competition & Preservation Act in March 2018, which would do just that. However, until any such bills become law, the need for vigorous FTC enforcement remains paramount.
What Should be Done About It
The platforms are engaging in anticompetitive activities by forcing publishers to adopt their practices or suffer the consequences; Google forces publishers to adopt practices that benefit Google’s monopoly positions in search and ad tech, while Facebook imposes similarly anticompetitive conditions, such as refusing to feature articles in its newsfeed unless the publisher implements Facebook’s preferred format and forcing publishers to pay to have their content elevated.
It has long been established that this type of behavior, the purpose of which is to restrict competition, is not exempt from regulation.
Further erosion of quality news would have dire consequences for society. This is why we believe the FTC should scrutinize potentially anticompetitive conduct by the platforms. The tech giants’ current behavior reduces output and innovation in news, and we believe that it is up to the FTC, under their consumer protection authority, to ensure that consumers are not misled by platforms’ content prioritization choices.
Impact on Quality of News
The dominant tech platforms, through their opaque algorithms and arbitrary editorial decisions about what content viewers see and when, have played a central role in the proliferation of click-bait journalism and fake news.
The platforms have created a world where anyone can pass off online content as news. The result is a tide of false and pseudo news littering the information stream. This leads to a confused, less-informed and — as we’ve seen with recent political elections — divided public. In fact, this degradation of news quality threatens our democratic discourse.
The platforms’ control over revenue streams leaves publishers with fewer resources to reinvest in the expensive business of delivering quality journalism — journalism that can help the public understand what is happening in the world and expose practices that might otherwise go undetected.
When scrutinizing the tech platforms for potentially anticompetitive conduct, the FTC should consider whether such conduct that restricts the output of quality journalism, because if the degradation of the news industry is permitted to continue to the benefit of the platforms, it is almost impossible to overstate the consequences.
David Chavern serves as President & CEO of the News Media Alliance. Chavern has built a career spanning 30 years in executive strategic and operational roles, and most recently completed a decade-long tenure at the United States Chamber of Commerce.