The Decline of American Journalism Is an Antitrust Problem

Weak antitrust enforcement set the stage for Facebook and Google to extract the fruits of publishers’ labor. We won’t be able to save journalism and solve our disinformation problem unless we weaken monopolies’ power.

 

 

As a former antitrust enforcer, I believe that the starving of journalism and the disinformation crisis are in good part monopoly problems. I’ve been writing about antitrust and tech platforms since the summer of 2016, when I noticed that the tech giants—Google, Amazon, Facebook, and Apple—were doing the same types of things Microsoft had been sued for nearly 20 years earlier. They were leveraging their market power to make fair competition impossible.

 

These tech giants are gatekeepers that also compete against companies that must get through their gates to reach users. News publishers must get through Facebook and Google’s gates due to the two platforms’ concentrated control over the flow of information. But Facebook and Google compete against news publishers for user attention, data and ad dollars. They are controlling the game and playing it too.

 

Publishers never had a fair shot, nor do they have bargaining power against the platforms. The platforms can cut them off with a simple tweak of an algorithm. Facebook and Google exploit their middlemen positions to divert ad revenue away from publishers and into their own pockets.

 

And the platforms can hyper-target users based on their 360-degree views of what their users read, think, and do, thanks to their ability to track users across millions of websites and even offline. Last year, Facebook and Google accounted for approximately 85 percent of the growth of the more than $150 billion North America and EU digital advertising market, according to Digital Content Next, a main trade association for publishers.

 

As for disinformation, Facebook and YouTube program their algorithms to prioritize engagement, which amplifies propaganda. Through surveillance, Facebook and Google learn what messages people are susceptible to, whether ads or propaganda. Then they rent out these manipulation machines to others for huge profits. The scale of the manipulation is massive—because of Facebook and Google’s dominance.

 

The platforms lack competitive pressure to fix the disinformation problem. The closest substitute for Facebook users is Instagram, which it owns. Users need to be able to vote with their feet and switch to alternatives.

 

To their credit, Facebook and Google started on their paths to dominance with innovation. But their monopoly power is not purely the result of competing on the merits. Facebook has repeatedly acquired rivals, such as Instagram and WhatsApp. Google’s acquisitions—including Applied Semantics, AdMob, and DoubleClick—cemented its market power throughout the ad ecosystem as it bought up the digital ad market spoke by spoke.

 

Together, Facebook and Google bought 150 companies in just the last six years. Google alone has bought nearly 250 companies. Thus far, antitrust enforcers have not stood in their way, nor have they stopped Facebook and Google from leveraging their monopoly power to exclude competition.

 

Weak antitrust enforcement set the stage for these platforms to extract the fruits of publishers’ labor, much as monopolies are extracting wealth across most sectors of our economy. Monopolies are putting the American Dream at risk, as people—including journalists—are not rewarded for their efforts.

 

Beginning immediately, antitrust enforcers should:

 

  • Prevent Facebook and Google from acquiring competitive threats and companies that fortify their monopoly power
  • Unwind anticompetitive deals and divest subsidiaries to open up competition
  • Sue to stop exclusionary practices

Antitrust enforcement alone won’t solve all of the problems listed above, but we won’t be able to solve anything unless we weaken monopolies’ power. It is a necessary but not sufficient condition.

 

News is not just any commodity. It’s a social good that is essential to hold power to account. It was a journalist named Ida Tarbell that took down the most notorious monopoly in US history, Standard Oil. News deserves the special protection it has had throughout American history, through non-discrimination and interoperability rules for networks. We also need rules to curb invasive data collection by default and to give citizens ownership of their data.

 

The good news is that we have been here before. We have stood up to powerful tech monopolists. Each time, we were better for it. We unleashed new waves of innovation. We restored our markets and removed gatekeepers. But if we don’t act now to change the structure of our markets, titans will continue to control speech, journalism will continue to wither, and so will our democracy.

 

Sally Hubbard is the Director of Enforcement Strategy at Open Markets Institute. She previously served as an Assistant Attorney General in the Antitrust Bureau of New York State, working for Attorneys General Spitzer, Cuomo, and Schneiderman.

 

[Editor’s note: this piece is based on oral testimony given before the House Judiciary Committee on June 11, 2019]

 

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