News Media Alliance Proposing “Safe Harbor” from Antitrust Laws to Discuss Fairer Share of Ad Revenue with Google, Facebook​​​​​​​

 

Google’s and Facebook’s massive strangleholds on the advertising industry continues to grow. The two conglomerates control 70 percent of the $73 billion ad industry, and nearly 90 percent of the total digital ad revenue growth in the past two years.

With consistently decreasing publishing revenues, around 2,000 publishers, newspapers, and other news media organizations in the United States and Canada have banded together (cumulatively represented by the News Media Alliance) in hopes of negotiating with the two tech giants for a fairer share of revenue and data.

Google and Facebook account for 80 percent of all referral online traffic, which means the two are a duopolistic middleman between most consumers and the websites they consume on.

“The problem is that today’s Internet distribution systems distort the flow of economic value derived from good reporting. Google and Facebook dominate web traffic and online ad income,” said David Chavern, CEO of the News Media Alliance, in an opinion piece feature in the Wall Street Journal. “They expect an economically squeezed news industry to do that costly work for them.”

Antitrust laws, the regulations in place to prohibit such duopolies like Facebook and Google, ironically, keep news organizations from being able to mutually discuss creating a more justifiable system with the two companies. According to the Wall Street Journal piece, the News Media Alliance is proposing a new law that would “grant a limited safe harbor for publishers to collectively negotiate with dominant online platforms.”

Antitrust regulators failed to prevent Google from buying competitors AdMob and Doubleclick and failed to prevent Facebook from acquiring its direct competitors Instagram and WhatsApp. These four acquisitions give Google and Facebook an immense amount of power over the online ad climate, and without regulation, that power will only continue to grow.

Sources:

https://www.wsj.com/articles/how-antitrust-undermines-press-freedom-1499638532

http://fortune.com/2017/04/26/google-facebook-digital-ads/

http://www.latimes.com/business/la-fi-tn-newspapers-facebook-google-20170709-story.html

https://www.usnews.com/news/national-news/articles/2017-07-10/newspapers-call-on-congress-to-help-take-on-google-facebook

https://www.nytimes.com/2017/07/09/business/media/google-facebook-news-media-alliance.html

https://www.usatoday.com/story/tech/news/2017/07/10/newspapers-want-anti-trust-pass-handle-facebook-google/465379001/

 

G.J. Melia