The news industry is joining the attack on big tech

Reuters

Congress will hear arguments on Tuesday from those in the news industry who say tech giants like Google and Facebook are threatening their survival and should receive regulatory oversight.
News publishers say that online platforms have control over digital advertising revenue, and that the journalism industry should see more of that money.
A study released Monday, which has sparked debate and received pushback among some in the publishing industry, claims Google made around $4.7 billion in advertising off of the news industry in 2018 — just $400 million less than what the U.S. news industry itself brought in from ads.
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News industry leaders will appear in front of Congress on Tuesday to discuss how tech giants like Google and Facebook have harmed the journalism business.

Adding to the growing calls to scale back the power of major tech companies, representatives from the journalism world are expected to testify in front of the House Judiciary Committee’s subcommittee on antitrust, commercial, and administrative law to argue that Silicon Valley tech companies have threatened the survival of the industry and should receive additional regulatory oversight, the Hill reports.

News publishers say that online platforms like Google and Facebook have disrupted the ability for news outlets to get their share of digital advertising generated from ads that run alongside their content. According to numbers from the Save Journalism Project, a nonprofit advocating for the news industry, 63% of digital ad revenue is controlled by Google and Facebook.

"Google and Facebook and Apple, they control so much of the ability to get your information out there, to get your stories out, and then they control so much of the ad revenue coming back in that it’s crippling the industry again," Save Journalism Project’s cofounder John Stanton told the Hill.

The hearings may include discussion of a bill that would give news publishers temporary exemptions from antitrust regulations so they can work together to collectively bargain with online platforms to divvy up advertising revenue.

Called the Journalism Competition and Preservation Act, the bill aims to "provide a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed."

Ahead of Tuesday’s hearing, a study from the News Media Alliance published in The New York Times estimates that Google made $4.7 billion in advertising revenue tied to the news industry in 2018. That’s only $400 million less than what the U.S. news industry itself is estimated to have brought in from digital advertising last year.

The study seeks to highlight just how much Google makes from digital advertising, and argues publishers see only a fraction of the total revenue. The News Media Alliance’s president, David Chavern, told The New York Times that the news industry — whose journalists produce the money-generating content — deserve a cut of what Google makes.

However, Google argues that News Media Alliance’s findings are inaccurate "back of the envelope calculations." Journalist and professor Jeff Jarvis argued that Google has actually helped publishers by directing internet searches and readers toward their websites.

"The problem has long been that publishers aren’t competent at exploiting the full value of these clicks by creating meaningful and valuable ongoing relationships with the people sent their way," Jarvis wrote in a Medium post. "The real problem here is news publishers’ dogged refusal to understand how the internet has changed their world, throwing the paradigm they understood into the grinder."

The Congressional subcommittee hearing, titled "Online Platforms and Market Power, Part 1: The Free and Diverse Press," kicks off at 2 pm ET on Tuesday.

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