Extract from The Guardian
As gatekeepers to the news, Google and Facebook pose dangers to even
the most successful outlets. Legislators need to speed the process of
bringing them to heel
After Europe’s top monopoly buster Margrethe Vestager fined Google more than $5bn for abusing its dominance over mobile phone technology, it’s tempting to relax about the power of big tech. Not only is there a cop watching these giants, she’s carrying a really big stick.
But this week’s firing by the New York Daily News of half the paper’s staff shines a different light on the matter. The reason given by the publisher – a sharp decline in revenue – is largely the result of Google abusing its monopoly over online advertising, in tandem with Facebook. Vestager’s move against Android does nothing to protect the free press in Europe or America. This means it’s time for other regulators and legislators in America and in Europe to speed the process of bringing Google to heel.
To be sure, the decision by Europe’s Directorate General for Competition (DG Comp) last Wednesday is important. The fat fine was the clearest statement yet that Google’s practices break the law. Further, the restrictions DG Comp imposed on Google’s business model will crimp its behavior in key ways. Vestager and her team deserve thanks. Given the political power of Google, their actions took courage.
But it’s vital to put the fine into perspective. In an industry that changes by the day, the case took eight years to complete. Further, it deals with just one part of a problem that is now very large and sprawling. And even after the fine Google will be left holding more than $95bn in cash. Vestager’s fighters put out the fire on the first floor, but only after the blaze had spread to the rest of the building.
Of all the social goods now in flames the one we must protect first is trustworthy journalism. In the nine years since Google bought the mobile ad company AdMob, annual ad revenue at Google and Facebook has soared, to more than $95bn and almost $40bn, respectively. During this period, ad revenue at newspapers fell around $50bn in 2005 to under $20bn today.
"The number of people working in America’s newsrooms dropped from more than 400,000 in 2001 to fewer than 185,000 today"
This means fewer reporters on the streets. The number of people working in America’s newsrooms dropped from more than 400,000 in 2001 to fewer than 185,000 today. In New York, the picture is especially bleak. The number of reporters at the Daily News is nearly 90% below 1988 levels. The New York Times cut local reporting staff by more than half over the last decade, from 90 to 40.
It’s not that citizens don’t want news. Especially since the election of Donald Trump, many new readers have bought subscriptions to national outlets like the New York Times and Wall Street Journal. Some upstarts, like BuzzFeed, have also managed to stay ahead of the sword.
But Google and Facebook pose fundamental dangers to even the most successful outlets. Their status as essential gatekeepers to the news – some 93% of Americans get news online, with most getting it through Google and Facebook – gives these two the power to steer readers away from any newspaper, almost at will.
Nicholas Thompson, editor-in-chief of Wired, recently described the problem in stark terms. “Journalists know that the man who owns the farm has the leverage. If Facebook wanted to, it could quietly turn any number of dials that would harm a publisher – by manipulating its traffic, its ad network or its readers.”
To the extent there’s good news, it’s that we know how to fix the problem. In many respects, Google and Facebook are simply 21st-century versions of the monopoly communications networks of the past, such as Western Union telegraph in the 19th century and AT&T in the 20th.
In the past, Americans carefully neutralized the monopoly powers of such behemoths. They made it against the law for these corporations to discriminate for or against any sender of information. They prevented them from competing with the companies – including newspapers – who rely on them to get to market.
Such thinking remains very much alive today. The Federal Communication Commission’s “net neutrality” decision in 2015 applied non-discrimination rules to broadband and cable operators. The Microsoft case of the late 1990s aimed to prevent the conflicts of interest that come from “vertical integration”.
Thus far, regulators in Europe and the United States have entirely failed to apply such traditional antimonopoly rules to Google and Facebook. This has left them free both to strip ad revenue from trustworthy publishers and to steer readers to and from publications almost at will.
The citizens of the world’s democracies face a choice. We can allow Google and Facebook to continue to strangle half our free press to death, and turn the rest into cowed pets. Or we can demand that our governments act now to protect the journalists who protect our most fundamental liberties.
- Barry Lynn is the executive director of the Open Markets Institute
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