The Fourth Estate’s skirmishes with Google and its peers last week made barely a ripple, but here’s what was heating up on the back-burner while newsrooms did what the nation’s founders intended them to do: serve the public interest.
- On Tuesday, the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights convened a hearing on allegations that Google search now steers users to sites most profitable to Google, not necessarily to the best sources of information. Also alleged: Google Ad Sense and Google AMP now control the online ad market, which further undermines the free press.
- On Wednesday, the Trust, Media and Democracy Initiative of the $2.4 billion Knight Foundation released “Techlash,” a Gallup study, that shows the number of Americans with positive views of Google, Twitter, Facebook and Amazon has plummeted from 60% in 2015 to 43%, while the number with negative views has more than doubled, to about 30%. Knight is the dominant funder of current efforts to save local journalism, having pledged $300 million to the effort.
- On Friday, a scrappy group of former journalists called the Save Journalism Project (SJP) released its latest policy paper: “The State of the News — Texas: Google’s negative impact on the journalism industry,” in which SJP reports journalism in Texas illustrates how Google uses its dominance in search and in online ad placement to freeze out competitors and will soon destroy the business model of the journalism industry.
In a non-pandemic week, those three events might have gotten more attention.
The gist of the news industry’s complaint is that social-media companies have drift-netted advertising accounts large and small without regard for the impact that has on the ecosystem of newsrooms our democracy relies on in times of crisis.
“Google’s kind of the big gorilla in the room. They are able to control ad revenue and traffic,” said John Stanton, the former Washington, D.C., bureau chief for BuzzFeed. He helped found the Save Journalism Project after being laid off from BuzzFeed.
During a Friday conference call with journalists, Stanton said the “State of the News — Texas” study shows newspapers’ plummeted while Google’s ad revenues tripled to $116.3 billion. Stanton asserts that’s not a misleading correlation. Instead, he said it illustrates causation: Google is exercising monopoly power in the advertising market to kick the legs from under the free press, with disastrous effects on local communities.
In the same call, citing research by the University of North Carolina, Nick Charles, the spokesman for Stanton’s group, said Texas’ recent history — the closure of 194 papers and emergence of 21 communities with no local newspaper — provides a snapshot of the threat local journalism faces nationwide if something isn’t done.
Charles said Texas is a good target for the group’s activism: when it comes to local newspapers, the Panhandle congressional district represented by Rep. Mac Thornberry, R-Texas, is one of the most underserved districts in the U.S. Plus, Texas’ Attorney General is leading an antitrust investigation into Google.
Efforts (via Google’s press staff, Twitter and email links) on Friday, Saturday and Monday to obtain reaction and comment from Google after the SJP news conference were unsuccessful.
Google has its defenders.
At the Senate hearing on Tuesday, the statement submitted by the App Association (of smaller software companies that sell via Apple and Google) said the giant social-media platforms are anything but anti-competitive, making competition and innovation possible at a scale never before seen.
The statement didn’t address free-press problems, but made the broad case that the big platforms save small innovators money and time.
Former Federal Communications Commission economist Thomas Hazlett was dismissive of proposals to break up Google. Regulators often do a poor job of predicting the future, he wrote in his comments for the hearing. “In 2005 the Bush administration prevented Blockbuster from acquiring Hollywood Video on antitrust grounds: The merger would threaten to monopolize video rentals,” said Hazlett, now an economics professor at Clemson University, specializing in the information economy. “Blockbuster filed for bankruptcy in 2010 and today has a single store, in Bend, Ore. It sounds like the plot for a movie, if Netflix is interested in making it.”
That hasn’t deterred antitrust actions against Google.
In 2019, the European Union fined Google about $1.7 billion (at most 1.5% of Google’s revenues that year, which were more than $113 billion) for abusing its market dominance by restricting rivals from working with Google partners and by using its Google Ad Sense product to dictate details of search boxes that display ads brokered by Google.
Presidential candidates of both parties have signaled they might push for Sherman Anti-Trust Act enforcement of the kind that broke up AT&T’s telephone monopoly in 1974 and in 2001 forced Microsoft to open up its operating system to web browsers not made in Redmond.
The antitrust investigation of Google, led by Texas Attorney General Ken Paxton, has been joined by Washington’s AG Bob Ferguson and every other state Attorney General except those from Google’s home state, California, and Alabama. The attorneys general of Washington, D.C., and Puerto Rico have also joined.
The U.S. Justice Department is also gathering evidence in response to complaints that Google uses its market dominance to kill off or buy up competitors.
Ken Gude, the Save Journalism Project’s policy director, said Friday he worries investigators looking at details of Google’s practices will miss the big picture. “The most poorly understood aspect of the interaction between Google and the news business is that their fundamental business model is identical, ” Gude said during the Friday conference call.
Google and newspapers seek to attract the attention of readers and then sell ads around that content, he said. And because Google Chrome dominates internet search traffic and Google dominates the marketplace for internet advertising, Google has an unfair advantage that violates U.S. laws intended to free the market from monopolies.
Whether Google intends to kill off the news industry or not, Gude said, recent changes to incognito searching on Google Chrome have made it easy for readers to circumvent paywalls on news websites, which cuts revenues that pay for journalism. By requiring publishers to use AMP (Accelerated Mobile Pages) in order to gain higher search rankings, Google controls data about users that it doesn’t share with publishers, which also hamstrings efforts to build paid subscription revenue. And Google’s recent announcement that it will phase out third-party cookies (reports on your visit to a site) will similarly gut publishers revenues from online subscribers and advertising.
Gude said Google News Initiative workshops and workshops to improve news organizations’ efforts to build revenue from subscribers is a $300 million drop dripped from Google’s revenue bucket. “We think in general that what Google is doing to try and throw out a pittance to news publishers is to buy itself cover for its large-scale actions that it takes to harm the news business.”