The House Judiciary Committee held its first hearing last week into whether gigantic technology companies like Amazon, Google, Facebook, and Apple are smothering market competition and harming consumers.
On Tuesday, June 11, the House Judiciary Committee heard about the power that platforms like Google and Facebook have over the way news is delivered and consumed, and the decline of the news industry due to what appears to many in the industry to be these companies’ anticompetitive behavior. Witnesses testifying at the hearing included representatives of News Corp. and the News Media Alliance, a trade group representing 2,000 news organizations.
According to the New York Times, this first hearing focused on Google and Facebook’s domination of the online digital ad market, which effectively takes revenue away from traditional news outlets, and forces them to rely on these online platforms to reach their audience.
Earlier this month, it was reported that Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) had divided responsibility for antitrust investigations, according to Vox, with the FTC taking oversight of Amazon and Facebook, and the DOJ having jurisdiction over Google and Apple. The House of Representatives Subcommittee on Antitrust, Commercial and Administrative Law then opened an investigation on June 3 into whether these big tech companies are in violation of antitrust laws. The subcommittee, which is chaired by Rep. David Cicilline (D-RI), will produce a report along with recommendations and also look to introduce related legislation.
At the June 11 hearing, Cicilline, the Times reported, said that 2,900 reporters and other news staffers had lost their jobs this year, and that news ad revenue reached $15.6 billion in 2017, down from $49 billion in 2006. “Concentration in the digital advertising market has pushed local journalism to the verge of extinction,” he said.
News Corp. general counsel David Pitofsky testified during the hearing that online platforms that sell ads tied to news organizations’ content take money away from publishers’ sites, since advertisers prefer these services that are aggregators of news content.
“Although publishers technically have a choice to withhold their content from online platforms, that choice is not a meaningful one,” said Pitofsky, according to Axios. “The online platforms are simply too dominant.”
In response to these issues, Cicilline and Republican Senator Doug Collins of Georgia have introduced the Journalism Competition and Preservation Act, which would exempt the news publishers from antitrust rules for four years and protect them from any charges of price collusion. David Chavern, chief executive of News Media Alliance, and Kevin Riley, editor of The Atlanta Journal-Constitution, also testified during the June 11 hearing; Riley said that important local news stories will go uncovered if social media and tech companies’ dominant role in news availability continues.
Said Riley, “Social media and technology companies have enormous influence on the distribution and availability of news…But we should be worried about losing newspapers, the fountainheads within the local news ecosystem.”
Over the next 18 months, the House committee is planning to hold several more hearings, depositions, and interviews with entities that compete with these four large tech companies, according to the Times. In addition, several state attorneys general met with FTC officials on Wednesday, June 12, to talk about antitrust oversight.
According to the Times, Cicilline said that as the hearings continue, his committee will also look into whether Facebook has harmed consumers with its handling of customer data, and will hear from smaller retailers as to how Amazon has hurt their businesses.