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Exclusive: Facebook and Google could lose bargaining power under upcoming U.S. bill to help news outlets

TechnologyFeb 19, 2021 10:25AM ET
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3/3 © Reuters. FILE PHOTO: A 3D-printed Facebook logo is seen placed on a keyboard in this illustration 2/3

By Diane Bartz and Helen Coster

WASHINGTON (Reuters) - Bipartisan members of Congress plan to introduce a bill in coming weeks to make it easier for smaller news organizations to negotiate with Big Tech platforms, said Rep. Ken Buck, the top Republican on the House Judiciary Committee's antitrust panel.

The U.S. bill would be introduced at a time when Australia is in a pitched battle with Facebook (NASDAQ:FB). The social media giant blocked news feeds and other pages - including those of charities, and health and emergency services - as part of a dispute over a proposed law that would require it and Google to pay news outlets whose links drive traffic to their platforms, or agree on a price through arbitration.

Buck, who was named the ranking member this month, told Reuters on Thursday the panel would bring out a series of antitrust bills and the first one in the coming weeks would allow smaller news organizations to negotiate collectively with Facebook and Alphabet (NASDAQ:GOOGL)'s Google.

Social media companies use news to attract customers and have been accused by news publishers of not sharing enough advertising revenue with them. The legislation could boost sales in the struggling news business.

While Facebook has fought publishers, Google has struck deals with them in France, Australia and other countries.

Google announced this week that it had agreed to a global deal with News Corp (NASDAQ:NWSA) that involved "significant payments" to the news organization, in one of the most extensive deals of its kind.

Smaller publishers using Google's ad sales technology have for years griped about their bigger competitors getting more favorable revenue-sharing deals from the search giant.

The news industry is undeniably struggling, with employment at U.S. newspapers down by half since 2008 amid tumbling advertising revenue and changing media habits, according to data from Pew Research.

Buck said the expected legislation would be similar to a 2019 bill co-sponsored by panel chair Rep. David Cicilline which would have allowed small publishers to band together to negotiate with big gatekeepers like Facebook and Google without facing antitrust scrutiny.

Facebook, Google and Cicilline's office did not respond to requests for comment after working hours.

That bill specified that only small publishers could take advantage of the group negotiation.

"What publishers have experienced is that platforms go to them one by one, make them sign NDAs and try to optimize per publisher without publishers being able to compare notes," said David Chavern, president and chief executive officer of the News Media Alliance, an industry trade group that is promoting the bill.

“Big national publishers probably have the capacity to get their own deals. If you look at smaller publishers, the only way to get some fair value is if they act together."

In October, the antitrust subcommittee's majority report detailed abuses by tech giants such as Google and Facebook. In his own report, Buck and three fellow Republicans expressed interest in some changes in antitrust law aimed at strengthening enforcers.

Buck said he wanted the focus to remain on the tech giants. "The biggest threat to the free market economy is big tech and it (potential legislation) should be fairly tightly focused on that," he said.

Exclusive: Facebook and Google could lose bargaining power under upcoming U.S. bill to help news outlets
 

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Comments (3)
DJ Ryte
DJ Ryte Feb 19, 2021 10:26AM ET
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We want tech/media to innovate and bring advanced social experiences to us but not abuse their acquired power. Sort of like politicians.
Stephen Smith
Stephen Smith Feb 19, 2021 8:48AM ET
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Internet mega companies including Facebook and Google have taken over much of the ad revenue and eyeballs that mainstream media used to enjoy, there have been only nascent efforts to make them answer to the public interest. https://worldabcnews.com/the-only-way-to-control-tech-giants-like-facebook-may-be-for-governments-to-gang-up/
Ankit Jain
Ankit Jain Feb 19, 2021 6:20AM ET
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remember the tech will be the bad word in this decade. the many bigtech might not be profitable as energy companies are today.
 
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