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ACCC Publishes Digital Advertising Services Report, Urges More Regulation of the Ad Tech Industry
On September 27, the Australian Competition and Consumer Commission (ACCC) published the long-awaited final report of its Digital Advertising Services Inquiry. The inquiry, focusing on online display advertising, began in February 2020 following a request from the Treasury and comes after the ACCC’s Digital Platforms Inquiry that concluded in 2019. The report aligns with many other investigations conducted by national competition regulators around the world in finding that Google has a dominant market position in the ad tech industry. The lack of competition has likely resulted in higher digital ad fees and lower publisher ad revenues, which leads to less and lower quality content. The report makes six recommendations to address the situation, including increasing transparency in the ad tech markets, authorizing the ACCC to promulgate rules to regulate the market, and addressing competition issues caused by data advantage. The report notes that these measures are necessary as enforcement under existing competition laws is not sufficient. The ACCC is expected to discuss how these recommendations should be given effect in another report to be published in September 2022. Read the full report here.
Senator Cantwell Releases Report on Challenges to Local Journalism
On October 27, Senator Maria Cantrell (D-WA), Ranking Member of the Senate Commerce Committee, released a report on threats to local news in today’s digital landscape. It explains how Google and Facebook have created a crisis for local news, whose revenues have been swiftly decreasing because of the platforms’ abuse of their dominant positions in the market. This report cites to the Alliance’s White Paper for examples of such abuse at the expense of news publishers. The report also contains multiple recommendations for addressing this threat to the free press, including giving publishers the ability to collectively negotiate for better terms with the tech platforms. This bargaining power would be made possible by passing S. 1700, the Journalism Competition and Preservation Act. Read more here.
Canadian Publishers Call for Compensation
On October 21, News Media Canada released a statement on behalf of Canada’s news publishers calling on Parliament to address Google and Facebook’s excessive market power. Because Google and Facebook control the majority of advertising revenue, news publishers’ bottom line is at the mercy of big tech. With this imbalance of power, an effective and independent press is being challenged by big tech’s monopolistic practices. These two platforms “cannot continue to be allowed to free-ride on the backs of Canadian news media publishers who produce news content, without fair compensation.” The statement offered Australia’s new bargaining code as a model for compensating news publishers. Read more here.
DOJ Files Lawsuit Against Google
On October 20, the Department of Justice (DOJ) and 11 state Attorneys General filed a lawsuit against Google in the District Court for the District of Columbia for allegedly violating antitrust laws under Section 2 of the Sherman Act, in hopes of restoring competition in search and search advertising markets. The complaint alleges that Google has a “search monopoly” and has “foreclosed competition for internet search.” This means that any “competitors are denied vital distribution, scale, and product recognition — ensuring they have no real chance to challenge Google.” Attorney General William Barr said that the lawsuit “strikes at the heart of Google’s grip over the internet for millions of American consumers, advertisers, small businesses and entrepreneurs beholden to an unlawful monopolist.” Google released a statement calling the DOJ’s actions “a deeply flawed lawsuit that would do nothing to help consumers.” The Alliance’s statement on the lawsuit can be found here. Read more here.
FCC to Interpret Section 230
On October 15, FCC Chairman Ajit Pai released a statement saying that “the FCC has the legal authority to interpret Section 230” and the FCC will “move forward with a rulemaking to clarify its meaning.” President Trump issued an Executive Order in May asking the FCC to “expeditiously propose regulations to clarify” Section 230. In June, four GOP leaders asked the FCC to “clearly define the framework under which technology firms, including social media companies, receive protections under Section 230.” In July, the Commerce Department filed a petition for rulemaking to clarify Section 230. There is not yet a timeline for the rulemaking process. Read more here.
Justice Thomas Wants to Limit Section 230
On October 13, the Supreme Court denied cert to a case implicating Section 230, but Justice Thomas released a statement stressing the importance of walking back the broad Section 230 immunity that lower courts have granted. Justice Thomas detailed how the courts eliminated both publisher and distributor liability, despite many indicators that such broad immunity was not a part of the statute. Instead of protecting a small and emerging internet, Section 230 now grants “sweeping immunity on some of the largest companies in the world.” Limiting this immunity “would not necessarily render defendants liable for online misconduct. It simply would give plaintiffs a chance to raise their claims in the first place.” Read more here.
Google Excludes Australia from News Showcase in Latest ACCC Retaliation
Google is delaying Australia’s inclusion in its latest news resource, after the ACCC announced its mandatory news media bargaining code requiring Google to fairly compensate news publishers. Since then, Google has spread misinformation about the Code and released a statement condemning the code. The ACCC remains firm in its position that news publishers deserve to be compensated for their content, and the Code should take effect to correct Google’s use and abuse of that content. The Australian Parliament still needs to pass the final legislation before the Code will take effect. Read more here.
French Court Requires Google to Negotiate with News Publishers
On October 8, a French appeals court ruled against Google, requiring them to negotiate with news publishers to pay them for their content. Prior to this ruling, reports indicate a deal was tentatively struck with a French news publishers association for 25 million Euro per year as a payment from Google to publishers. This holding affirms France’s competition regulator’s April decision, also directing Google to negotiate with news publishers. France is the latest country to take issue with Google’s disproportionate bargaining power and seek to correct it. Read more here.
House Antitrust Subcommittee Releases Report on Big Tech
House Antitrust Chairman David Cicilline (D-RI) and the House Subcommittee on Antitrust, Commercial, and Administrative Law concluded their year-long, bipartisan investigation of big tech’s market power by releasing their comprehensive report. The report discusses the online platforms’ anticompetitive actions against news publishers and how that abuse harms publishers’ ability to produce quality journalism for the public. The report and multiple witnesses expressed support for H.R. 2054, the Journalism Competition and Preservation Act, which would allow news publishers a limited window in which to negotiate collectively with the online platforms for fair compensation. Other recommendations to address anticompetitive practices include structural separations and prohibitions of certain dominant platforms from operating in adjacent lines of business and presumptive prohibition against future mergers and acquisitions by the dominant platforms. Both Google and Amazon have released statements suggesting that company break-ups would be bad for consumers. Read more here.
Final Big Tech Antitrust Hearing Calls for Regulation
On October 1, the House Antitrust Subcommittee held the last of seven hearings to investigate Google, Facebook, Amazon, and Apple for possible antitrust violations. The witnesses clashed over what Congress should do, with some suggesting major overhauls of antitrust law and others saying antitrust laws do little to prevent anticompetitive practices. Committee Chairman David Cicilline (D-RI) said that each tech company served as a “gatekeeper” with significant market power, allowing for anticompetitive behavior. Rep. Cicilline will be releasing a report on the investigation as early as this week. Read more here.
Senate Subpoenas Big Tech CEOs
On October 1, the Senate Commerce Committee voted to issue subpoenas to Facebook CEO Mark Zuckerberg, Twitter CEO Jack Dorsey, and Google CEO Sundar Pichai if they do not agree to testify voluntarily. The CEOs will testify about Section 230 and the potentially destructive immunity shield it gives big tech to take advantage of its market power with no accountability. The vote was unanimous, but the time of the meeting has yet to be announced. Read more here.