Digital Updates – All 2021

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2021 UPDATES

State Attorneys General File Lawsuit Over Google’s Dominance of Android App Market

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This week, Attorneys General from 36 states and the District of Columbia filed a new antitrust lawsuit against Google alleging that the tech giant abused its power with the company’s Play Store on Android devices. Plaintiffs allege that anticompetitive practices used by Google have allowed them to extort a 30% commission from app developers on all Play Store sales. Google controls over 90% of the android app market, having previously held off attempts by fellow tech giants Amazon and Microsoft to break into the marketplace. The lawsuit claims that Google’s targeting of app stores attempting to compete has left developers with “no reasonable choice” but to distribute their content through the company’s Play Store. This is the fourth antitrust lawsuit brought against Google since October of last year as regulators seek to reign in the dominance of the nation’s largest technology firms. In addition to the multitude of lawsuits, a recent slate of tech focused antitrust bills marked up by the House Judiciary Committee further shows the governments focus on making the tech markets more competitive.

Federal Judge Asks New FTC Chair to Rewrite Blockbuster Tech Antitrust Lawsuit

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In December of last year, the FTC unveiled massive antitrust lawsuits against Facebook seeking to have the social media company broken up. The suits accused Facebook of illegally crushing competition, namely the acquisitions of Instagram and WhatsApp, on its way to a monopoly. The cases were initially dismissed in late June when a federal judge said the FTC had failed to show that Facebook held a monopoly in the social media market. The FTC has now been given the opportunity of rewriting the lawsuit in hopes of better defining the market in which Facebook dominates. Recently confirmed FTC chair Lina Khan, whose career is defined by her opposition to monopolies, seems perfectly suited to lead this new effort to hold big tech companies in check. Tech companies have filed motions that Khan recuse herself from antitrust probes against them due to her past criticisms of the largest tech firms, while opponents of the tech giants believe they makes her the exact person who should be leading the effort.

Google Delays Phase-Out of Third-Party Cookies

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In January 2020, Google announced that it would be devaluing third-party cookies within two years “to make the web more private and secure for users, while also supporting publishers.” While some advertisers considered shifting their budgets and ad tech vendors scrambled to come up with new ways to stay relevant, some publishers wondered if there would be an opportunity for them to regain a foothold with their users’ first-party data. However, when Google announced its “privacy sandbox” and Federated Learning of Cohorts (FLoC) ad-targeting solutions, many pointed out that these suggestions as designed largely benefited Google. Some government regulators are investigating whether FLoC is anticompetitive – both the UK and EU announced plans. These investigations may be partially behind Google’s announcement on June 24 that it would delay the phasing out of third-party cookies in Chrome to “late 2023.” In a blog post, product manager Vinay Goel said, “It’s become clear that more time is needed across the ecosystem to get this right.”

House Judiciary Committee Proceeds with Markup of Tech-Focused Antitrust Bills

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The House Judiciary Committee held a markup hearing for a slate of antitrust bills aimed at reigning in the power of the nation’s largest tech companies. The bills included the Mergers Filing Fee Modernization Act of 2021 (H.R. 3843), the State Antitrust Enforcement Venue Act of 2021 (H.R. 3460), the Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act (H.R. 3849), the Platform Competition and Opportunity Act of 2021 (H.R. 3826), the American Choice and Innovation Online Act (H.R. 3816), and the Ending Platform Monopolies Act (H.R. 3825). The six bills were approved via rollcall vote with bipartisan support, meaning they will continue to the entire House of Representatives. These bills, along with the Journalism Competition and Preservation Act of 2021 (also known as the Safe Harbor Bill), which is set to be considered by the Committee with the remaining few antitrust bills, aim to restore fairness and competition to an online marketplace that has been lacking both for some time. If passed into law, these six bills and the JCPA would give news publishers a much better ability to reap the benefits of their hard work. However, the tech giants targeted by this legislation are not backing down. Several of the largest tech companies criticized the bills, saying they would do more harm than good, and are expected to continue opposing the antitrust bills as they proceed through the legislative process. A statement released by House Judiciary Chair Jerrold Nadler (D-NY) can be read here.

New York Legislative Session Ends, Fails to Pass Consumer Privacy, Antitrust Bills

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On June 10, the New York State legislature ended its session, failing to pass controversial bills related to antitrust and consumer privacy. While the legislature had considered various consumer privacy bills, none of them passed. The bills ranged from narrow legislation regarding users’ right to know to several comprehensive online privacy bills. In addition to the consumer privacy bills, the state Assembly failed to adopt the highly controversial antitrust bill, S933A. The bill would have established a $9.2 million threshold for pre-merger notifications and a low market share threshold for the bill’s abuse of dominance provisions, in addition to allowing private class actions. While aimed at big tech companies, the bill would have arguably affected many other businesses operating in the state. The bill passed the state Senate earlier in June. Meanwhile, the legislature did pass a bill (S2890B/A5837B) requiring publishers of electronic books to offer licenses to state public libraries on reasonable terms. The bill, similar to one passed in Maryland earlier this year, defines some key terms broadly and has raised federal pre-emption concerns. The bill is now expected to go to the governor sometime later this year.

Google Nears Settlement in French Online Advertising Case, Similar Proceedings Continue Globally

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On May 27, The Wall Street Journal reported that Google was nearing a settlement with French regulators in an antitrust case that claims the tech giant has abused its power in the online advertising industry. Australian regulators are also investigating the ways that Google’s dominance in online advertising is hurting news publishers and consumers alike, noting that the monopoly Google holds in the industry leaves publishers with little room to negotiate the sharing of advertising revenues. There are also ongoing investigations in both the United Kingdom and the European Union into how recent changes to Google’s online advertising platform have strengthened their grip on the industry at the expense of a competitive marketplace. In the United States, Google faces a lawsuit from the owners of the Daily Mail, who allege that Search rankings are based on how much ad revenue the publishers create for Google. Additionally, Texas Attorney General Ken Paxton, along with nine other states’ Attorneys General, filed suit against Google alleging abuses of power by the company in stifling competition in the digital ad market. Read more here.

Alliance Objects to Transfer of Google Lawsuit from Texas to California

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The News Media Alliance submitted a response to the Judicial Panel of Multidistrict Litigation (JPML) regarding Google’s motion to move the antitrust case filed by the Attorneys General of Texas and 15 other states and territories from Texas to California. The case, filed by 10 states in December, focuses on Google’s dominance in the digital advertising sector, and was joined by other states earlier this year. While the judge in the case previously refused to transfer the case to California, the JPML is yet to make its decision. The Alliance’s brief opposes the change of venue as the Eastern District of Texas is more centrally located, making the location more accessible to potential witnesses, including news publishers. The current venue also has fewer cases on the docket than its Northern California counterpart, allowing for a timelier resolution of the case. The Alliance’s response also objects to the consolidation of the Texas case with any other cases, while supporting the consolidation of the “newspaper cases” in the Southern District of New York, a court with a long track record and expertise in cases involving the multibillion-dollar online ad industry. Read more about the Texas case here and the “newspaper cases” here. Read the Alliance’s submitted comments here.

Florida Adopts a Law Regulating Online Platforms’ Content Moderation Practices

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On May 25, Florida Governor Ron DeSantis signed the country’s first state law regulating online platform moderation practices. The bill makes it illegal for online platforms to suspend or ban state political candidates for more than 14 days or to use post-prioritizing or shadow banning algorithms for content by or about the candidate. The bill also creates transparency and notice requirements regarding content moderation practices and allows users to opt for a chronological news feed without curation. The law bans the online platforms from censoring, de-platforming, or shadow banning qualifying “journalistic enterprises” based on their content and does not apply to websites or platforms owned by theme park or entertainment venue operators. Platforms may be fined up to $250,000 per day for de-platforming candidates for statewide office and the bill provides for a private right of action in certain circumstances. Several commentators have criticized the law and it is expected to face constitutional challenges, in addition to which the law may be preempted by Section 230 of Communications Decency Act. The law will take effect on July 1. Similar bills have been considered in other states, including Texas. Read more here.

New Members of Congress Sign on to Support Safe Harbor Bill

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Re-introduced in March, the “Journalism Competition and Preservation Act” has gained bicameral, bipartisan support in Congress. Introducing sponsors David Cicilline (D-RI) and Ken Buck (R-CO) in the House, and Amy Klobuchar (D-MN) and John Kennedy (R-LA) in the Senate, have been joined by 23 House and 3 Senate cosponsors for their chambers’ version of the Safe Harbor Bill. In May, 10 new Representatives agreed to co-sponsor the House bill: Vern Buchanan (R-FL), Theodore Deutch (D-FL), Lucy McBath (D-GA), Lloyd Doggett (D-TX), Mike Rogers (R-AL), Steven Palazzo (R-MS), Joe Courtney (D-CT), Dina Titus (D-NV), Joe Neguse (D-CO), and Dusty Johnson (R-SD). You can view the House bill here and the Senate bill here.

Alliance Hosts Virtual Fly-In for Publishers, Congressional Leaders to Discuss Safe Harbor

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From May 10 – 12, the Alliance hosted a series of meetings between local member publishers and their representatives in Congress so they could discuss the “Journalism Competition and Preservation Act” (JCPA) and the impact the legislation would have on small, local publishers. Publishers from a number of local outlets discussed the importance of a safe harbor and how it would help them fight for better business terms with tech giants like Facebook and Google. During the meetings, the publishers shared stories with their Members of Congress about the work they do, and the ways that the JCPA, also known as the Safe Harbor Bill, would help support them so they can continue their vital work. Read more here.

Google Defends Anti-Competitive Behavior

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Nearly 65 percent of all Google searches end without a user going to a different website, according to a report by Rand Fishkin. The Alliance’s White Paper further detailed how Google creates a walled garden by using its market dominant position to diminish the chances that users will visit other news websites. Google’s market dominance and anti-competitive practices have come under increasing scrutiny, with multiple lawsuits ongoing against them. On March 24, Google released a blog attempting to defend its practices. Google claims that it “sends more traffic to the open web every year,” an attempt to justify its increasing efforts to keep users (and the user data it stockpiles) within its walls. Read more here.

 

Journalism Competition and Preservation Act Re-Introduced

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On March 12, the House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law held a hearing about “Saving the Free and Diverse Press” by reviving competition in the marketplace. At the hearing, Rep. David Cicilline (D-RI) introduced the “Journalism Competition and Preservation Act,” which would enable news publishers to collectively bargain with dominant digital platforms in order to receive fair compensation, specifically benefitting small, local publishers. Alliance CEO David Chavern testified that Google and Facebook effectively regulate the news industry because they determine who the content reaches, collect date, and control the advertising markets. Because of this, news publishers urgently need a solution to correct this power imbalance and negotiate for fair compensation for their content. Though Google claims to have a deep commitment to news, news publishers have more internet traffic than ever and are even bearing higher costs to produce high quality journalism, yet their revenues are plummeting at the hands of Google and Facebook. There was bi-partisan agreement local news is vital for both American democracy and civilization. The “Journalism Competition and Preservation Act” would give publishers the bargaining power they need to survive in an ecosystem that is currently dominated by two companies. Read more here

Alliance Submits Comments on Proposed Changes to the Copyright Act

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On March 5, the News Media Alliance submitted comments to Senator Thom Tillis (R-NC) regarding his proposed Digital Copyright Act of 2021 (DCA) discussion draft, published in December 2020. The discussion draft includes numerous revisions to Sections 512 and 1201 of the Copyright Act, in addition to various other proposed changes, including provisions concerning registration of website content and directing the Copyright Office to conduct a study on creating an ancillary copyright for news publishers. The Alliance’s comments expressed support for these two provisions of particular interest to news publishers, in addition to suggesting ways to make the other proposed changes work better for news publishers. The Alliance looks forward to working with Sen. Tillis and other congressional leaders to modernize U.S. copyright laws in the coming years.

Maryland Senate Passes a Bill Exempting News Publishers from Digital Ad Tax

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On March 5, the Maryland Senate passed a bill that would exempt news publishers from the state’s recently adopted digital advertising tax. Introduced in early-February, SB 787 aims to prevent services subject to the tax from passing the costs to customers, in addition to protecting news publishers and broadcasters. The bill’s definition of “news media entity” includes all news organizations engaging in “newsgathering, reporting, or publishing articles or commentary about news, current events, culture, or other matters of public interest” but excludes aggregators and republishers of third-party content. Maryland became the first state in the United States to adopt a digital advertising tax in February with companies subject to advertising taxes of up to 10 percent. Other states are currently considering similar measures. The Maryland amendment bill is now in the State House, which is expected to hold a hearing on it on March 25. Read more about the bill here (subscription required) and the full text of the bill here.

Australia Passes Bargaining Code

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On February 25, both houses of the Australian Parliament passed the News Media Bargaining Code. It passed with several last-minute amendments that include more negotiation time before binding arbitration and government discretion to exempt the platforms from arbitration after considering the power imbalance against a platform’s “significant contribution to the sustainability of the Australian news industry.” The Code passed despite multiple attempts by both Google and Facebook to undermine and spread misinformation about it. The Code is the first of its kind, and many other countries are considering using it as a guide for how to compensate news publishers and preserve quality journalism that is essential to democracy. Read more here.

Microsoft Joins Coalition to Compensate News Publishers

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On February 22, Microsoft announced that it would join forces with European publishers to have platforms pay for news content throughout Europe. They plan to model the payment directive on Australia’s News Media Bargaining Code legislation, with an arbitration model. That model would ensure that news publishers are fairly compensated for their content, despite the digital platforms’ dominant market power. Microsoft VP Casper Klynge said, “Access to fresh, broad and deep press coverage is critical to the success of our democracies… This initiative is a logical next step.” Read more here.

Microsoft Joins Coalition to Tackle Misinformation

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On February 22, Microsoft announced that it would join forces with tech and media companies to form a coalition aimed at addressing disinformation and “developing technical standards for certifying the source and history or provenance of media content.” This technology could create an open standard for platforms to minimize harmful information and give more traffic to trusted journalism. If implemented, it could also increase the public’s trust in journalism by eliminating deceptive and misleading content. Read more here.

Facebook Strikes Deal, Will Reinstate News in Australia

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On February 22, Facebook announced it had reached an agreement with the Australian government to keep news on its platform. The announcement appeared as an update on the company’s original blog post announcing it would ban news from its platform in Australia. Facebook said it had constructive discussions and is satisfied that the government “agreed to a number of changes and guarantees that address our core concerns.” The Australian Treasurer published the amendments, saying, “The amendments will strengthen the hand of regional and small publishers in obtaining appropriate remuneration for the use of their content by the digital platforms.” Facebook will be restoring news to its platform in Australia within the next few days. Read more here.

Facebook Blocks Australian News

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On February 17, Facebook announced it would prevent users and publishers from “sharing or viewing Australian and international news content.” This means Australian news publishers and individual users will be unable to post or share any news content to Facebook, and they will not have access to international publishers’ content. Despite claiming to champion journalism, Facebook said they give more value to publishers, and they receive “minimal” business gain from news. Facebook’s action was a direct retaliation to the News Media Bargaining Code gaining approval from the Australian parliament. They claim the Code is not workable, as digital platforms struggle to avoid compensating publishers for their content. Read more here.

European Union Moves Closer to Adopting the ePrivacy Regulation

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On February 10, the European Union took a decisive step towards adopting the proposed ePrivacy Regulation as the European Council reached a compromise on its negotiating mandate. The ePrivacy Directive, first proposed by the European Commission in 2017, would update the EU rules on when service providers are allowed to process user data and have access to data stored on users’ devices, including the use of cookies and metadata. The regulation would complement and particularize the General Data Protection Regulation (GDPR), which forms the backbone of the EU’s online privacy regime together with the current ePrivacy Directive, adopted in 2002. The Council’s proposal would establish a default rule that all electronic communications data is confidential, and use and processing of such data is only allowed when permitted by the regulation. The European Parliament reached its negotiating mandate in 2017. The institutions can now start negotiations to reach a compromise agreement. Read more.

Maryland Exempts News Publishers from Ad Tax

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On February 5, Maryland Senate President William Ferguson introduced a bill that would exempt news publishers from Maryland’s digital advertising tax. The legislation also prohibits the taxable companies from passing on the cost of the tax to the consumer. Maryland’s efforts are setting important precedents for other states as they work to ensure the sustainability of quality journalism. The bill is set to have a hearing on February 17. Read more here.

Google Launches News Showcase in Australia

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On February 4, Google announced it was launching its News Showcase in Australia. If publishers agree to Google’s terms, Google will pay them for including their content in the Showcase. The details on payment remain unreleased. Publications participating in the News Showcase include The Canberra Times, The Illawarra Mercury, The Saturday Paper, Crikey, The New DailyInDaily and The Conversation. This comes after multiple threats to pull all Google services from Australia if the legislature passes the News Media Bargaining Code. The Code will ensure news publishers have equal bargaining power in negotiations for compensation. Read more here.

Canadian Publishers Urge Parliament to Preserve Press

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On February 3, News Media Canada released a letter to all Members of Parliament, urging them to prepare legislation to compensate news publishers for their content. The letter points out that Google and Facebook have disproportionate market power and use news publishers’ content without compensation, leaving news publishers to struggle. With COVID-19 aiding in a swift decline of journalism jobs, producing quality journalism is increasingly difficult. But, the letter points to Australia’s News Media Bargaining Code as a promising solution to require Google and Facebook to fairly compensate publishers for their content. Read more here.

Microsoft Supports Australia’s Code

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On February 3, Microsoft released a statement fully supporting Australia’s News Media Bargaining Code. Microsoft CEO Satya Nadella spoke with Australian Prime Minister Scott Morrison and Communications Minister Paul Fletcher about correcting the power imbalance between digital platforms and Australian news publishers. Microsoft said they are “committed to Australia and the news publishers that are vital to the country’s democracy,” and they fully back the Australian Competition and Consumer Commission’s News Media Bargaining Code. The statement ended with Microsoft promising “while other tech companies may sometimes threaten to leave Australia, Microsoft will never make such a threat.” Read more here.

ACCC Holds Public Hearing on News Media Bargaining Code

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On February 1, the Australian Competition and Consumer Commission (ACCC) hosted a public hearing to discuss the News Media Bargaining Code legislation and address concerns raised by public submissions. While the hearing addressed praise for and concerns about the Code, it was primarily focused on building a sustainable model for financing news publishers. One witness pointed out how digital platforms have worked to diminish the value of news since the Code was announced, saying, “Both Facebook and Google pushed around news not being an important part of their business, despite it being a critical part of the functioning of the democracy in which they’re operating.” Other witnesses voiced concerns about sustaining local news and making sure the Code adequately supports even the smallest players, ensuring a diverse and independent press. Read more here.

Google Attacks Australian Code Again

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On January 31, Google released a blog with “Questions and Answers” about Australia’s News Media Bargaining Code. A third of Google’s “answers” included reference to Google’s News Showcase as the solution for news publishers seeking compensation and proof of Google’s “commitment” to news publishers. The company continues to claim that the Australian Competition and Consumer Commission compensates news publishers for “link[ing] freely between sites” and will “break Google search.” Google continues to deny its well-documented use and abuse of news publishers’ content, to the detriment of citizens and the free press. This is the latest in a long line of Google’s retaliation against Australia’s News Media Bargaining Code. Read more here.

Google Releases Own “Facts” About Australia’s News Media Bargaining Code

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On January 22, in yet another attempt to discredit Australia’s upcoming Code requiring digital platforms to compensate news publishers for their content, Google released a blog listing eight “facts” about Google and the Code. These so-called facts include that the Code “breaks Google Search,” that Google is not responsible news publishers’ decline in revenue, and that “Google doesn’t ‘use’ news content.” The Alliance released a White Paper last year explaining how Google uses and abuses news publishers’ content through its dominant market power, tangibly hurting quality journalism. This blog comes after a disinformation campaign and an “experiment” removing Australian news from Google search. Read more here.

Google Enters Agreement to Pay French Publishers

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On January 21, Google officially signed an agreement to compensate a coalition of French publishers for Google’s use of their content. In a blog post, Google called the agreement a “major step forward” and a framework for all of Google’s future negotiations with publishers. This framework includes considerations like daily volume of publications, monthly internet traffic, and other contributions. The parties did not release the exact payment amount or details on how compensation was calculated. These agreements were mandated by the French Competition Authority, after the country passed a copyright law in 2019 granting news publishers a “neighboring right.” Read more here.

State AGs to File Third Lawsuit Against Google

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On January 15, Reuters reported that State Attorneys General are planning to file a third lawsuit against Google focusing on its Play Store for Android phones. The lawsuit is expected to be filed in February or March. Google’s policies include the ability to ban apps for objectionable content and requiring payments of up to 30 percent of the app’s revenue. A Google spokesperson said that Android phones are compatible with multiple app stores, giving app developers options if they disagree with Google’s terms. The Apple App Store, which is incompatible with Android phones, has also come under scrutiny by DOJ and developers. Read more here.

WhatsApp Delays New Privacy Policy After Backlash

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On January 15, WhatsApp announced it would delay its recent privacy policy update after users raised concerns about the app sharing data with its parent company, Facebook. Originally, users were required to consent to the policy by February 8 or their accounts would stop working. Users voiced their concern about the new privacy policy and exactly what information would be shared. WhatsApp has since walked back its original statement by pushing back the date users would have to review and accept the terms. The company’s latest announcement also claims that the update only includes “new options” to interact with businesses and increase transparency with data use and collection. This is an attempt at monetizing the app after failed attempts to do so in the past. Many users are already flocking to other messaging options, as competition increases. Read more here.

Google Experimenting with Removing Australian Media from Search Results

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On January 13, the The Australian Financial Review reported that Google was adjusting algorithms to block Australian news sites, as part of an “experiment.” A Google spokesperson confirmed this report, saying that the adjusted algorithms would “reach about 1% of Google Search users in Australia to measure the impacts of news businesses and Google Search on each other.” This is Google’s latest retaliatory effort against the ACCC’s News Media Bargaining Code. The Google spokesperson told Guardian Australia that the experiments should finish by early February. A spokesperson for Nine—the publisher of the Sydney Morning Herald, the Age, and the AFR—called Google’s actions “a chilling illustration of their extraordinary market power.” Read more here.

FCC No Longer Clarifying Section 230

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On January 7, FCC Chairman Ajit Pai said in a C-SPAN interview that he no longer intends to move forward with the notice of proposed rule-making to clarify Section 230. He said he had insufficient time to complete the administrative process after the 2020 election. This comes three months after Chairman Pai’s original announcement that the FCC had the authority to interpret Section 230. Read more here.

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