U.S. antitrust hearings on Big Tech platforms explore market dominance, effect on media

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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With all the excitement in Australia recently, we did not want you to think that we were overlooking what’s been taking place oceans away in the United States.

Efforts to protect U.S. journalism have been two-pronged: the passage of broad antitrust legislation and, for the interim, the passage of narrower safe-harbor legislation that would allow the press to bargain collectively with digital platforms for four years.

U.S. antitrust hearings: Part 6

In late July, the U.S. House Judiciary Committee’s sub-committee on antitrust, commercial, and administrative law concluded its sixth hearing into online platforms and market dominance, “Examining the Dominance of Amazon, Apple, Facebook, and Google.” 

U.S. Representative David Cicilline (a Democrat from Rhode Island) chairs the subcommittee. In 2019, he also introduced the Journalism Protection and Competition Act, which has bipartisan support in both the U.S. House of Representatives and the U.S. Senate, but is still in committee in both chambers. According to Skopos Labs, it has a 3% chance of being enacted. 

U.S. House Judiciary Committee Chair Jerrold Nadler, a Democratic congressman from New York, focused one line of questioning on Facebook's 2012 acquisition of Instagram.
U.S. House Judiciary Committee Chair Jerrold Nadler, a Democratic congressman from New York, focused one line of questioning on Facebook's 2012 acquisition of Instagram.

The series of hearings has been slow moving, and these six have proceeded at a tortoise’s pace, having happened over the course of more than a year. (According to The New York Times, the original timeline was 18 months.) The issue of platform dominance and the survival of American journalism was again on the table, with Committee Chair Jerrold Nadler, a Democratic congressman from New York, stating that the journalism industry is “gravely threatened.” 

U.S. Representative Pramila Jayapal (a Democrat from Washington) began her questioning by saying, “Many of us feel a deep urgency to protect independent journalism,” according to the Save Journalism Project. 

The organisation also reported that U.S. Representative Kelly Armstrong (a Republican from North Dakota) “hammered” Google on its “hypocritical claims about privacy.” In response to his questioning, Alphabet CEO Sundar Pichai acknowledged that “Google’s own data collection will continue after it eliminates third-party cookies but that it will be blocked for Google’s competitors.

Google’s own study shows,” continued the Save Journalism Project, “eliminating third-party cookies would reduce digital ad revenue for news publishers by an average of 62%. Armstrong summed it up by saying that Google “uses privacy as a cudgel against competitors.’” (If you’d like a deep dive into the end of third-party cookies and the news media industry, check out INMA Executive Director/CEO Earl J. Wilkinson’s June report on the topic). 

And the subcommittee’s Ranking Member, U.S. Representative James Sensenbrenner (a Republican from Wisconson) endorsed aggressive enforcement of existing antitrust laws against the tech giants, Save Journalism Project reported

Apple CEO Tim Cook was one of four live witnesses at the hearings.
Apple CEO Tim Cook was one of four live witnesses at the hearings.

There were only four live witnesses at Part 6:

  • Jeff Bezos, CEO, Amazon.com, Inc.
  • Tim Cook, CEO, Apple Inc.
  • Sundar Pichai, CEO, Alphabet Inc.
  • Mark Zuckerberg, CEO, Facebook, Inc. 

However, 13 in absentia statements flowed in from around the world. Most notably, a statement from Margrethe Vestager, executive vice president of the European Commission for a Europe Fit for the Digital Age, focused on the broader hazards of monopolisation, saying that in the last nine months: 

“[P]olicy reflections on the issues and challenges raised by digital platforms have intensified around the world, and so it is a very timely moment for me to be able to… inform you of the latest developments and the nature of our own reflections, both as regards the application of competition policy itself, as well as policy initiatives that are complementary to competition policy … I am comforted to see that the issues you are looking at overlap to a large extent with what we are examining and seeking to address on this side of the Atlantic.”

A Bloomberg opinion piece also compared antitrust efforts in the United States to efforts elsewhere: 

“Europe has the motivation, but not the means, to break up Big Tech. For the United States, the inverse is true. That’s bad news for anyone hoping for a full regulatory reckoning with Silicon Valley’s and Seattle’s giants over their monopolistic tendencies.

“Washington lawmakers see their job as protecting the consumer first and foremost,” Bloomberg continued, “while Brussels wants to make sure other companies are allowed to compete with the incumbents. Sadly for Europe, the Americans have all the power but their approach is unlikely to produce radical change (as my Opinion colleague Tara Lachapelle wrote this week).” 

Bloomberg also noted that U.S. antitrust law “focuses on the interests of the consumer … while Europe considers the broader market dynamics and effect on competition… . While Vestager probably wants to foster the creation of a company that could counterbalance Google and Facebook’s might in search and social media, her U.S. peers only worry if the impact of their dominance is detrimental to consumers. That narrower American focus limits the likelihood of far-reaching action.”

U.S. antitrust hearings: the early groundwork

The actual groundwork for the interrogation of the Big Four with regard to their dealings with news media publishers was laid in Part One: The Free and Diverse Press last June. The witness list included representatives from:

  • News Corp
  • Atlanta Journal-Constitution
  • Save Journalism Project
  • News Media Alliance
  • Public Knowledge
  • Open Markets Institute
  • Computer and Communications Industry Association 

David Pitofsky, general counsel at News Corp, said: “I am here because the marketplace for news is broken … . While the tools consumers use to find news on the Internet may continue to develop, there is less and less reliable, quality news for consumers to find,” pointing out that under current law, platforms have “little if any commitment to accuracy or reliability … a news article is valuable if it is viral, not if it is verified.” 

He continued: “We suggest the focus needs to be on reinvigorating antitrust enforcement, reconsidering narrow precedents, and assessing whether new legislation is needed to fill blind spots exposed by modern market dynamics. The only way out … is to act collectively.” 

In her testimony at that hearing, Sally Hubbard, director of enforcement strategy at the Open Markets Institute, outlined the history of the U.S. press as it has been assailed over the centuries by one new communications monopoly followed by another — railroads, telegraphy, radio, and television. 

But she defined the greatest threat as the combination of the Internet with neoliberal economic policies that arose in the 1970s and ‘80s that favour “more ‘efficient’ forms of production, distribution, and business organisation, in theory to create more material wealth to share across society.” This was a “radical shift” away from a system that had promoted diversity and the distribution of power to one that centralised and concentrated power to the detriment of the news and entertainment industries. 

Combined with the “development and deployment” of the Internet, the rise of “globe-spanning Internet-based communications corporations” was a nearly fatal blow to the media industry, given the changes it brought to the U.S. advertising market, she wrote. 

Hubbard described the main difference between this and previous periods: “For the first time ever, America’s citizens have not used government to neutralise the power of today’s monopoly communications networks.” She proposed saving the press by organising market structures around four principles: 

  1. Business models must exist that allow for independent news gathering, because independent news gathering is a social good critical to democracy.
  2. Any policy levers must preserve free speech and avoid government censorship.
  3. Markets should be decentralised so that information production can be decentralised. Local communities need to be able to produce and distribute information about their own communities.
  4. There should be no price and terms of service discrimination against consumers, advertisers, or publishers. Relationships between publishers and the audience should be kept under the control of publishers and audiences — not structured to enable third parties to monetise relationships they don’t invest in to produce. 
Amazon CEO Jeff Bezos testified before the sub-committee on July 29.
Amazon CEO Jeff Bezos testified before the sub-committee on July 29.

In her testimony, she advocated breaking up the Big Four to introduce “new independent companies that can compete … . This has been done before. One model for such a simplification would be the Public Utility Holding Company Act of 1935, which forced utility holding companies to break themselves up into component parts.”

Conclusion

“Antitrust is more than economics,” Pitofsky said, quoting his father, Robert Pitofsky, former head of the Federal Trade Commission. “And I do believe that if you have issues in the newspaper business, in book publishing, news generally, entertainment, I think you want to be more careful and thorough in your investigation than if the same problems arose in cosmetics, or lumber, or coal mining. I mean, if somebody monopolises the field of cosmetics, they’re going to take money out of consumers’ pockets, but the implications for democratic values are zero. On the other hand, if they monopolise books, you’re talking about implications that go way beyond what the wholesale price of books might be.”

About L. Carol Christopher

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