The investigation into big tech was finally kick-started this Tuesday as Congress opened with the first hearing on how the tech industry has gradually disrupted and annihilated the news and publishing media’s business models.
In the House Judiciary Committee’s bipartisan investigation into the big tech and Silicon Valley’s tech companies, the committee heard from media advocates about their thoughts on internet giants. Several advocates vehemently opposed the fact that a handful of companies such as Facebook and Google were at the helm of digital marketing. They expressed that a much more leveled playing field that is free from such monopolies is what’s required.
“Unfortunately in the news business, free riding by dominant online platforms, which aggregate and then reserve our content, has led to the lion’s share of online advertising dollars generated off the back of news going to the platforms. We’re not losing business to an innovator who has found a better or more efficient way to report and investigate the news. We’re losing business because the dominant platforms deploy our news content to target our audiences to then turn around and sell that audience to the same advertisers we’re trying to serve,” said David Pitofsky, the general counsel for News Corp.
Generally speaking, the lawmakers haven’t paid much attention to the apparent threats faced by news and publishing companies from tech monopolies. With ever increasing popularity, Google and Facebook alone took the lion’s share of the US internet advertising revenue. It is estimated that nearly 66% of all the ad-revenue went to these tech monopolies alone.
On the other hand, the news industry, which primarily relied on advertising, has now started suffering from the wrath of the tech monopolies that are dominating the advertising sphere. The Pew Research Center’s studies have shown that the ad-revenue of newspapers amounted to a mere $16.5 billion in 2017 compared to 2006 when the news industry made a whopping $49 billion through ad-revenue.
“These trends strongly suggest that the decline of the news industry is not the inevitable result of the arrival of the internet but is instead the direct consequence of enforcement choices that have created a market structure where a small number of platforms are capturing the value created by newspapers and publishers,” said Rep. David Cicilline (D-R.I.), who is leading the Judiciary investigation and chairs the antitrust subcommittee.
The tech companies, however, have a different opinion altogether. They expressed that enforcing antitrust laws on them for the sake of the news industry might lead to lesser competition and more consolidation.
“Because journalism is important to any democracy we share the goal in ensuring that it continues. Digital services play an important role in doing that,” said Matt Schruers, the VP of the Computer and Communications Industry Association.
On a closing note, the news and media fraternity expressed that Congress should consider the recent layoffs in the news industry as well the effect of these tech giants on smaller outlets.