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The News Media Alliance released a study that estimated Google made $4.7 billion in revenue in 2018 by scraping content from news publishers. | Drew Angerer/Getty Images

Technology

News publishers seize moment as Congress amps up tech scrutiny

Updated

Lawmakers offered a public airing Tuesday to longstanding complaints from news companies about Silicon Valley’s growing wealth and power, kicking off a new phase of congressional antitrust scrutiny of the tech industry.

Media organizations have warned for years that Google and Facebook's dominance of digital advertising has stifled publishers’ ability to profit off their own journalism, resulting in a tsunami of layoffs, buyouts, closures and consolidations while digital ad dollars flow to the two online giants.

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News Media Alliance president David Chavern told the House Judiciary antitrust subcommittee that Google and Facebook pose “potentially existential threats to the news industry.” And News Corp. general counsel David Pitovsky said that the “free-riding by the dominant online platforms has resulted in a massive siphoning off of profits” from news organizations.

Tuesday's hearing was the first of a series planned by House Judiciary to examine the tech industry, part of a broader effort by the panel to investigate whether Silicon Valley giants are engaging in anti-competitive conduct. The Justice Department and Federal Trade Commission have separately begun to lay the groundwork for their own potential antitrust probes of the major tech companies.

The witness list for Tuesday's hearing gave some of the internet industry's media critics a chance to make their arguments. News Corp. is publisher of The Wall Street Journal and the New York Post, and its executive chairman, Rupert Murdoch, is a confidant of President Donald Trump. The News Media Alliance represents about 2,000 other print and online news outlets, including The New York Times.

Ahead of the hearing, the News Media Alliance released a study that estimated Google made $4.7 billion in revenue in 2018 by scraping content from news publishers. Chavern said the findings show “more money goes back to Google and not the publishers producing the content.”

But the study immediately came under fire over its methodology, with critics like Columbia Journalism School professors Emily Bell and Bill Grueskin saying it oversimplifies the financial relationship between platforms and publishers. A Google spokesperson also blasted the study, saying its "back of the envelope calculations are inaccurate" and arguing that Google News and Google Search generate clicks for media websites, "which drive subscriptions and significant ad revenue."

Still, the power of Google and Facebook, which together account for a majority of the online ad revenue in the U.S., has become a point of bipartisan concern for lawmakers who say a functional press is crucial to maintaining a healthy democracy in an age of social media disinformation.

“Whether it’s an online publisher or local newspapers, we cannot have a democracy without a free and diverse press," said House Judiciary antitrust subcommittee Chairman David Cicilline (D-R.I.). “Our country will not survive if we do not have shared facts, if corruption is not exposed and rooted out at all levels of government, and if power is not held to account.”

Such concerns about the media's survival coincide with steady media attacks from political figures, including Trump, who routinely disparage journalists as “enemies of the people” and peddlers of “fake news.” And one of the main targets of Trump’s media criticism is The Washington Post — a news outlet owned by one of the tech industry’s most powerful executives, Amazon CEO Jeff Bezos.

Some business and industry groups in Washington, D.C., questioned the need for the House hearing at all.

The committee should “avoid creating a political platform for aggrieved industries and companies to complain about their competitors," said Billy Easley, policy analyst for Americans for Prosperity, the Koch network's policy and political arm. Carl Szabo of e-commerce trade group NetChoice, which counts Google and Facebook as members, blasted the hearing as “an attack on social media by big media companies upset that they no longer control our news and views.”

Many in the news business back the Journalism Competition and Preservation Act from Cicilline and House Judiciary ranking member Doug Collins (R-Ga.). It would grant publishers a four-year antitrust exemption to allow them to negotiate together with internet companies. Sens. Amy Klobuchar (D-Minn.) and John Neely Kennedy (R-La.) last week released a companion bill in their chamber.

Chavern of the News Media Alliance told POLITICO the measure would given publishers a chance to shape how their content generates revenue, who controls data collected from readers and how tech companies prioritize certain stories over others.

But Matt Schruers, vice president for law and policy at the Computer & Communications Industry Association, a tech industry trade group, called the bill “ill-advised,” saying it “runs counter to U.S. antitrust norms and would disrupt an otherwise functioning market economy.”

Cicilline conceded Tuesday that his legislative proposal would not be a “remedy for long-term health” of the news industry, calling it instead “life support” for smaller, ailing publishers. “We must do something in the short term to save trustworthy journalism before it is lost forever,” he said.

House Judiciary Republicans, who have traditionally resisted more aggressive industry regulation, cautioned the committee against taking more sweeping actions on antitrust. Any legislative action should be “consistent in keeping the free market free,” Collins said Tuesday.

Kevin Riley, editor of The Atlanta Journal-Constitution, said publishers are simply seeking “a fair chance to compete” with the titans of Silicon Valley.

“American business is built on the simple concept that the investor, as newspapers are investors in their content, will reap the rewards of that investment,” Riley, who testified Tuesday, told POLITICO prior to the session. “We’ve got a situation now where newspapers don’t seem to reap those rewards, but others seem to.”

(Axel Springer, which co-owns POLITICO Europe, is a staunch critic of Google’s practices. The company is not testifying at Tuesday's House hearing.)

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