There’s been a significant new development in the antitrust cases being brought against Google and Facebook.
On Friday, Richard Nieva reported in BuzzFeed News that a lawsuit filed in December 2020 by Texas and several other states claims that Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg “personally signed off on a secret advertising deal that allegedly gave Facebook special privileges on Google’s ad platform.” That information was recently unredacted.
The revelation comes as both Google and Facebook face a crackdown from state and federal officials over antitrust concerns for their business practices. Earlier this week, a judge rejected Facebook’s motion to dismiss a lawsuit by the Federal Trade Commission that accuses the social network of using anticompetitive tactics.
The action being led by Texas is separate from an antitrust suit brought against Google and Facebook by more than 200 newspapers around the country. The suit essentially claims that Google has monopolized the digital ad marketplace in violation of antitrust law and has cut Facebook in on the deal in order to stave off competition. Writing in Business Insider, Martin Coulter puts it this way:
Most of the allegations in the suit hinge on Google’s fear of “header bidding,” an alternative to its own ad auctioning practices described as an “existential threat” to the company.
As I’ve written previously, the antitrust actions are potentially more interesting than the usual complaint made by newspapers — that Google and Facebook have repurposed their journalism and should pay for it. That’s never struck me as an especially strong legal argument, although it’s starting to happen in Australia and Western Europe.
The antitrust claims, on the other hand, are pretty straightforward. You can’t control all aspects of a market, and you can’t give special treatment to a would-be competitor. Google and Facebook, of course, have denied any wrongdoing, and that needs to be taken seriously. But keep an eye on this. It could shake the relationship between the platforms and the publishers to the very core.
Our guest on the latest episode of the “What Works” podcast is Rhema Bland, the first permanent director of the Ida B. Wells Society for Investigative Reporting at the University of North Carolina school of journalism. She was appointed in October 2020 after working in higher education as an adviser to student media programs. She is a veteran journalist who has reported and produced for CBS, the Florida Times-Union, WJCT and the New York Daily News.
The Wells Society was co-founded by award-winning journalists Nikole Hannah-Jones, Ron Nixon and Topher Sanders. The society is named after the path-breaking Black journalist and activist Ida B. Wells, who fearlessly covered the lynching of Black men and was present at the creation of the NAACP. The society’s mission is essential to the industry: to “increase the ranks, retention and profile of reporters and editors of color in the field of investigative reporting.” Bland and her colleagues host training seminars for journalists across the country, focusing on everything from entrepreneurship to racial inequality to COVID-19.
Also in this episode, Ellen Clegg talks about Ogden Newspapers’ purchase of Swift Communications, which publishes community papers in western ski towns as well as niche agricultural titles like the Goat Journal. And I share news about federal antitrust lawsuits that are in the works against Google and Facebook by more than 200 newspapers.
You can listen here and sign up via Apple Podcasts, Spotify or wherever fine podcasts are found.
A lawsuit filed by newspapers against Google and Facebook that claims the two tech giants violated antitrust laws is gaining momentum. Sara Fischer and Kristal Dixon of Axios report that more than 200 papers across the country have joined the effort, which is aimed at forcing Google and Facebook to compensate them for what they say are monopolistic practices that denied them advertising revenue.
I don’t see any New England newspapers on this list. But the papers that are involved in the lawsuits in some way represent about 30 different owners in dozens of states, according to Fischer and Dixon. About 150 papers owned by 17 different groups have actually filed suit so far.
What’s interesting about this is that it has nothing to do with the usual complaint about Google and Facebook — that they repurpose journalism from newspapers, and that the newspapers ought to be compensated. By contrast, the current lawsuits are aimed at practices that the plaintiffs claim are clearly illegal.
The Axios story doesn’t get into the weeds. But I did earlier this year shortly after the first lawsuit was filed by HD Media, a small chain based in West Virginia. Essentially, the argument is twofold:
Google is violating antitrust law by controlling every aspect of digital advertising. Paul Farrell, a lawyer for HD Media, put it this way in an interview with the trade magazine Editor & Publisher: “They have completely monetized and commercialized their search engine, and what they’ve also done is create an advertising marketplace in which they represent and profit from the buyers and the sellers, while also owning the exchange.”
Facebook is complicit because, according to a lawsuit filed by several state attorneys general, Google and Facebook are colluding through an agreement that Google has code-named Jedi Blue. The AGs contend that Google provides Facebook with special considerations so that Facebook won’t set up a competing ad network.
The two companies have denied any wrongdoing. But if the case against them is correct, then Google is profiting from a perfect closed environment: It holds a near-monopoly on search and the programmatic advertising system through which most ads show up on news websites. And it has an agreement with Facebook aimed at staving off competition.
“The intellectual framework for this developed over the last three to four years,” Doug Reynolds, managing partner of HD Media, told Axios.
The lawsuit also comes at a time when the federal government is beginning to rethink antitrust law. A generation ago, a philosophy developed by Robert Bork — yes, that Robert Bork, and yes, everything really does go back to Richard Nixon — held that there can be no antitrust violations unless consumers are harmed in the form of higher prices.
President Joe Biden’s administration, by contrast, has been embracing a more progressive, older form of antitrust law holding that monopolies can be punished or even broken up if they “undermine economic fairness and American democracy,” as The New Yorker put it.
The newspapers’ lawsuit against Google and Facebook is grounded in the Biden version of antitrust — Google and Facebook are charged with leveraging their monopoly to harm newspapers economically while at the same time hurting democracy, which depends on reliable journalism.
It was a move reminiscent of the post-9/11 Patriot Act, which allowed federal investigators to spy on the reading habits of library and bookstore customers in the name of fighting terrorism.
Last week we learned that the FBI had subpoenaed USA Today in pursuit of Internet Protocol addresses and other data. The goal was to help the agency figure out the identities of people who had read a story last February about a Florida shootout in which two FBI agents were killed and three were wounded. The subpoena specifically cited a 35-minute time frame on the day that the shootings took place.
Fortunately, USA Today’s corporate owner, Gannett Co., the nation’s largest newspaper chain, took a principled stand and fought the subpoena. On Saturday, the FBI backed down. There’s already little enough privacy on the internet without having to worry about the possibility that government officials will be looking over our shoulders as we’re reading.
We are in the midst of a systematic assault on the media’s role in holding the powerful to account. And it’s long past time for our elected officials to do something about it by passing legislation rather than relying on assurances by President Joe Biden that he’s ending these abuses. After all, Biden’s assurances can be undone by the next president with the flick of a pen. We need something stronger and more stable.
Barely a month ago I wrote about the revelation that the Trump Justice Department had spied on three Washington Post reporters’ phone records. I observed that Trump’s actions were in line with a long string of presidential attacks on the media, from Richard Nixon to George W. Bush to Barack Obama.
Since then, the revelations have come at a dizzying pace. In addition to the USA Today subpoena, which strikes me as especially egregious since it targets readers rather than journalists, there have been at least two other noteworthy instances of abuse:
• In late May, CNN reported that the Trump administration had secretly obtained 2017 email and phone records of Barbara Starr, a longtime reporter for the network. The period in question was June 1 to July 31, 2017.
• In a particularly noxious abuse of the government’s power, The New York Times reported several days ago that the Justice Department had subpoenaed Google for the email records of four Times reporters — and that, though the inquiry had begun under former President Donald Trump, it continued under Biden. As recently as March, the Justice Department obtained a gag order prohibiting Google from informing the Times. That order was later amended so that a few top officials at the Times could be told, but not executive editor Dean Baquet.
“It is urgent that we hear from the attorney general about all three Trump-era records seizures, including the purported reasoning behind them and the rationale for not notifying the journalists in advance,” said Bruce Brown, executive director of the Reporters Committee for Freedom of the Press, in a statement released last week. “The goal must be to ensure that such abuses never occur again.”
Compounding the problem is the widely misunderstood belief that government officials are violating the First Amendment. For instance, on CNN’s “Reliable Sources” this past Sunday, Adam Goldman, one of the four Times reporters targeted in the Google probe, said, “The U.S. attorney’s office in D.C. has a history of trampling on the First Amendment, so that’s why I wasn’t surprised. They treat the media, they treat newspapers like drug gangs.”
In fact, over the past century the Supreme Court has interpreted the First Amendment in such a way that the protections for news gathering are exceedingly weak.
Protections for publication and broadcast are strong, which is why the press has been able to report on secret stolen documents — from the Pentagon Papers to the Snowden files — with few concerns about facing prosecution.
But the court has ruled that journalists have no constitutional right to protect their anonymous sources. And with regard to the current string of spying revelations, the court has held repeatedly that journalists enjoy no special rights that would not be available to ordinary citizens.
President Biden recently pledged to end the practice of seizing reporters’ records, saying the practice is “simply, simply wrong.” Some observers questioned whether he actually meant it, since he’d be breaking not just with Trump’s abuses but with longstanding practice. That, in turn, led press secretary Jen Psaki to assure journalists that Biden planned to follow through on his pledge.
But what a president does, a future president can undo. To guarantee that the press will be able to perform its watchdog role, we need a federal shield law so that reporters won’t be compelled to reveal their confidential sources. Such protections — either by law or by court decision — are already in place in 49 states, with the sole exception being Wyoming.
We also need legislation that prevents the government from secretly spying on journalists’ online activities — and on readers’ activities as well.
No doubt opponents will insist that the government needs to be able to spy in order to keep us safe. But the Post, CNN and Times cases appear to involve the Trump administration’s politically motivated attempts to learn more about the origins of the Russia probe, including the activities of former FBI Director James Comey. The USA Today case did involve a much more serious matter. But after dropping its demands, the FBI told the BBC that “intervening investigative developments” made the information unnecessary.
Which is nearly always the case. Rarely does the government’s desire to interfere with the press’ role involve a situation that’s literally a matter of life or death. And the law can accommodate those rare instances.
In general, though, the government should go about its business without compromising the independence or freedom of the press.
The local news crisis has some people talking seriously about government funding for journalism. The idea isn’t entirely new. Nonprofit news organizations enjoy tax benefits, and public broadcasters receive some federal money. As I recently reported for GBH News, federal pandemic relief actually meant that 2020 was a better year than 2019 for some media outlets.
But what comes next? Local media are being squeezed on one side by technology and on the other by avaricious chain ownership. Ideally, you would want to find ways to help independent news organizations without rewarding the corporations and hedge funds that are cutting newsrooms without conscience. But it’s hard to imagine how you would draw distinctions between the two.
Moreover, direct government assistance raises serious questions about how journalism can play its traditional watchdog role if it’s receiving money from the watchdog. It strikes me that it would be a hard sell with taxpayers, too. Nevertheless, some smart people are thinking about how we can provide communities with the news and information they need in an era of market failure.
Really, the administration’s push for a more capacious definition of infrastructure should encourage us to think even more creatively about what else should qualify for the next package as it takes shape. Can it seriously be argued, for instance, that access to the news isn’t an important feature of any well-functioning society? We all depend upon a steady stream of accurate information; obviously, we owe much of our awareness that America’s infrastructure is crumbling to the work of journalists who helped alert policymakers and the public to the problem in the first place.
Nwanevu notes that the $3 per capita we currently spend on public broadcasting is a pittance compared to the $90 that is the average in many other developed countries. He also writes favorably of ideas that Andrew Yang put forth during his presidential campaign for a fellowship program for journalists and a “Local Journalism Fund” to help news outlets transition to sustainability. But Nwanevu is also thinking bigger than that, calling for $30 billion to $40 billion over the next 10 years.
I’m not sold, though, mainly because Nwanevu only half-defines the problem. He cites the challenges posed by technology and the rise of Google and Facebook, but he makes no mention of corporate ownership, which has made the crisis much worse than it needed to be. With chains like Gannett and hedge funds like Alden Global Capital bleeding their newspapers dry, there is no money left over to invest in the future. Meanwhile, a number of independent news organizations across the country, for-profit and nonprofit, are doing a good job of serving their communities. We need more.
The Columbia Journalism Review recently published a conversation with the longtime media reformer Robert McChesney; Steve Waldman, the co-founder of Report for America; and the economist Andrea Prat. All of them offer their own ideas for providing some public assistance for news, with McChesney’s proposal for a “Green New Deal for journalism” being the most ambitious. He describes the challenge this way:
This is the public policy imperative facing the United States regarding journalism in 2021: we need the funding to support independent, competitive, professional local news media. That money must come from the government, but we cannot allow the government to pick and choose who gets the money. The policy must be like the postal subsidy of newspapers: large enough to get the job done, and it cannot discriminate on the basis of ideology or political viewpoint. Censorship is entirely unacceptable. It must allow the people to make of it what they will, and trust them in the process of self-government.
So how would McChesney accomplish that? Through elections at the county level (that wouldn’t really work in Massachusetts, which is pretty much county-free) to elect boards that would distribute between $32 billion and $35 billion a year over a five-year period to fund local news and foster the development of new nonprofit organizations. It’s pretty breath-taking, and McChesney admits there’s no support for such a plan in Washington at the moment. But the value McChesney has always brought to the table is that he thinks big and gives us a chance to wrap our minds around larger possibilities.
Waldman’s plan, by contrast, already has a great deal of support on Capitol Hill: a $250 refundable tax credit to pay for local news subscriptions or to donate to nonprofit media outlets. He would like to see a tax credit for hiring and retaining journalists as well, which is something currently being done in Canada.
Prat, though, argues that the tax credits would mainly benefit large news organizations, whereas “the most urgent problem is not the overall information level but its distribution across the population.” A voucher system, he says, “would give more access to information-poor people.”
So, has the moment come for government-funded news? My own guess is probably not, at least if we’re talking about the ambitious proposals put forth by Nwanevu and McChesney. But some modest assistance aimed at helping news organizations make the transition to a sustainable future might well be a good idea.
Waldman’s tax credits and Prat’s vouchers could be seen as extensions of the help we already provide through nonprofit tax incentives. And surely we can provide more funding for public media while broadening the definition to include community-based journalism.
I think there’s something of a category error in today’s front-page New York Times story on the hateful and false content you can find on Google Podcasts. Reporter Reggie Ugwu repeats on several occasions that Google Podcasts includes some pretty terrible stuff from neo-Nazis, white supremacists and conspiracy theorists that you won’t find at Google’s competitors. He writes:
Google Podcasts — whose app has been downloaded more than 19 million times, according to Apptopia — stands alone among major platforms in its tolerance of hate speech and other extremist content. A recent nonexhaustive search turned up more than two dozen podcasts from white supremacists and pro-Nazi groups, offering a buffet of slurs and conspiracy theories. None of the podcasts appeared on Apple Podcasts, Spotify or Stitcher.
The problem here is that Apple, Spotify and Stitcher are all trying to offer a curated experience. Google’s DNA is in search. If you Google “InfoWars,” you expect to be taken to Alex Jones’ hallucinatory home of hate and disinformation. And you are. So if you search Google Podcasts, why should that be any different? Indeed, that’s exactly the reasoning Google invoked when Ugwu contacted them for comment:
Told of the white supremacist and pro-Nazi content on its platform and asked about its policy, a Google spokeswoman, Charity Mhende, compared Google Podcasts to Google Search. She said that the company did not want to “limit what people are able to find,” and that it only blocks content “in rare circumstances, largely guided by local law.”
Let me be clear. It doesn’t have to be this way. Google could choose to keep its searches wide open while providing users of Google Podcasts with the same safe experience that its competitors offer. And maybe it should. It’s just that I find it unremarkable that a search company would run its business differently from those whose business model is based on creating a safe, walled-in environment.
I’m hardly a Google fanboy. I’d like to see it broken up so that it can no longer use search to leverage its advertising business to the disadvantage of publishers. But unless you think it ought to stop showing hate-filled websites when you search for them, then I don’t think you should be surprised that it also shows you hate-filled podcasts.
Could Australian-style rules to force Google and Facebook to pay for news be coming to the United States?
U.S. Rep. David Cicilline, D-R.I., told the CNN program “Reliable Sources” over the weekend that the House will soon take up legislation that would give news publishers an antitrust exemption allowing them to bargain collectively with the Big Tech platforms. The purpose would be negotiating a compensation system.
“Local news is on life support in this country,” said Cicilline, who chairs the House Judiciary Antitrust Subcommittee. “The monopoly power of these two platforms is resulting in a significant decline in local journalism.”
More broadly, he said his committee will also take up parts of a 450-page report, compiled over 16 months, to rein in the power of the giant platforms. He told host Brian Stelter that many of the recommendations in the report have bipartisan support and are aimed at breaking up the tech companies’ monopoly power.
The most intriguing of those ideas, according to a recent story by Cat Zakrzewski in The Washington Post, involves “interoperability and data portability, which would make it easier for consumers to move their data to new or competing tech services.”
Facebook has massive market dominance, and it would be difficult for a competitor to get a toehold in the market in any case. But it would be at least somewhat more feasible if users could easily transfer all their data over to a new service and delete it from Facebook, something that is almost impossible to do at the moment.
Regardless of what happens, it seems that Google and Facebook may soon no longer be able to operate with impunity. I’m far from certain that the Australian system is the best way to go given that it privileges entrenched publishers like Rupert Murdoch. But the idea that the platforms should pay something for what they use is long overdue.
When Facebook has announced various initiatives to help news organizations, they have tended to benefit larger newsrooms that are less in need of assistance. For instance, when the News Tab was unveiled a year and a half ago, it was explicitly designed to benefit behemoths like The New York Times, The Washington Post and BuzzFeed.
As I wrote then: “At a time when local news is under unprecedented economic pressure, the News Tab will only widen the gap between relatively well-off, highly visible national news organizations and small local projects. The national sites will get paid; the local sites will be billed monthly.”
Through an application process, we will select a group of LION member organizations that will receive up to two years of funding to hire someone who will focus primarily on revenue generation with the goal of making their position self-sustaining at the end of the two years. For our first cohort, we will prioritize news businesses pursuing sustainability through a revenue strategy focused on readers, major donors or advertisers. Every LION member will be considered eligible for this program — their tax status will not matter.
In other words, the program is open to for-profit and nonprofit ventures alike.
News organizations that are part of LION are sources of reliable journalism, and they’re providing it on the community level, where the news implosion has hit the hardest. With 262 members, $1 million isn’t going to go a long way. But we do seem to be at a moment at which Facebook and Google understand that they are going to have to pay for the news they’ve been using. The LION program is exceptionally worthy.
At root, the debate over whether Google and Facebook should pay for news is about how their duopoly destroyed the value of digital advertising and then kept most of the revenues for themselves.
News, which is expensive, can’t survive on the pennies brought in by Google’s programmatic ads. That’s why there’s been so much emphasis in recent years on reader revenue — an emphasis that, at least in a few places, is starting to pay off.
Still, it would surely be a positive if news organizations could develop a revenue stream other than digital subscriptions. When readers are empowered, they expect their preferences and prejudices to be catered to. You need a balance. That’s why it’s interesting to see Axios’ recent report that Gannett and McClatchy will combine forces to sell national advertising for their hundreds of local and regional papers.
Can Gannett and McClatchy’s efforts drive up the price of digital ads? That’s the real issue, and without that their effort is not going to have much of an effect. Of course, it also does nothing to boost ad sales at the local level, which have been on the decline for years. Yes, local businesses have gravitated to Facebook just like everyone else. But local newspapers aren’t exactly known for being aggressive and creative about selling to the local hair salons, pizza restaurants and funeral homes, either. It can be done. Just ask Howard Owens, publisher of The Batavian in western New York state.
The partnership shows why I differentiate between Gannett and Alden Global Capital, even though their nuke-the-newsroom approach to the bottom line looks very much the same on the ground. Alden, by all appearances, is trying to squeeze as much money as it can out of the newspapers it’s killing and then get out. Gannett, on the other hand, is hoping to build a community news chain that can be sustainable in the long run.
Gannett’s biggest mistake, carried over from its predecessor company, GateHouse Media, is that its executives think they can build for the future while failing to provide enough journalism to retain readers. No matter how smart your business model, it’s not going to work if all you’re offering your audience is a shell.
Regardless of what really happened, this had the appearance of pure extortion.
In response to Australia’s new law requiring Google and Facebook to hold negotiations with news publishers aimed at compensating publishers for their content, Facebook took down not just news — which would be a proportionate response, I suppose — but all kinds of information.
The newly banned Facebook content comprises, as The Washington Post reports, “dozens of government and charity websites as well, including public health sites containing critical information about the pandemic during the first week of its coronavirus vaccine rollout.”
The information was restored about 12 hours later, and Facebook claimed it was all a mistake. Still, it was a powerful demonstration of what Mark Zuckerberg can do if you refuse to kiss the ring.