Welcome to The Corner. In this issue, we explore a novel approach by Danish publishers to claw back funds from tech giants who have monopolized their advertising revenues. We also introduce our report “AI in the Public Interest: Confronting the Monopoly Threat,” which shows how a handful of Big Tech companies have already monopolized the emerging AI space. 

Citing Existential Threat, Danish Publishers Band Together Against Platform Giants

Austin Ahlman

Publishers in Denmark are embarking on a novel approach to get the dominant platform monopolies Facebook and Google, as well as other tech giants like Twitter, TikTok, and Microsoft, to pay the for the reporting and other content that is shared on those platforms.

 The monopolization of advertising revenue by these gatekeeper corporations has devastated the news publishing industry around the world. In response, several countries have begun implementing reforms that allow publishers to demand fair compensation for the use of their content by these giants. But no nation’s publishers are taking that fight as seriously as Denmark’s, where virtually every news publisher has joined a new collective—the Danish Press Publications’ Collective Management Organization, or DPCMO—to leverage their combined power to demand a fair deal from the platform monopolies.

Publishers say the current advertising revenue landscape has left them with little choice. In an interview with Open Markets, Anders Krab-Johansen, the CEO and Publisher of Berlingske Media, which owns Berlingske—Denmark’s paper of record and the oldest newspaper in the Nordic world—described the challenges the paper is facing in the platform era as uniquely existential. “The other crises [Berlingske has faced] were crises in society,” he explained. “This seems more far reaching” in that it poses a direct challenge to the language and culture of the Danes. “I am pretty certain that lots of Danish media brands will fold in the coming years because revenue streams are basically disappearing.”

New research by FehrAdvice & Partners AG found that Google Search’s monopolization alone was depriving publishers in nearby Switzerland of approximately $176 million in annual revenue. Under old remuneration deals, media organizations have received small fractions of this amount, if anything at all.

According to DPMCO head Karen Rønde, the newly formed Danish collective was created to correct that imbalance. In an interview with Open Markets, Rønde explained that the creation of the DPCMO was enabled by the European Union’s sweeping 2019 copyright reforms, which are still in the process of being integrated into the national laws of EU member states. That directive created remuneration rights for copyright holders but left the specifics of how publishers can pursue those rights open to interpretation. 

In Denmark, publishers decided that banding together, rather than pursuing a suite of individual compensation claims, was the path to ensuring a sustainable funding stream for all in the platform era. While the EU directive theoretically allows publishers of each member nation to cooperate, only Danish publishers have worked in a unified manner. If they succeed in winning fair deals, their peers in other EU nations may be compelled to follow suit.

 But hurdles remain. “Getting the publishers united was a challenge, because they are used to being competitors,” Rønde told Open Markets. The challenge is exacerbated by the fact that publishers differ in size, history, and genre, and hence often have disparate interests. Another challenge has been resistance by the platforms. While some tech giants, like Microsoft, have signed interim deals, others, including TikTok and Facebook, have fought the DPCMO’s claims. This includes by denying that news adds value to their platforms, and refusing to share the data that would allow independent experts to assess that value.

That obstinance has led Rønde to file several formal complaints in hopes the Danish Competition and Consumer Authority and Danish Copyright License Tribunal will step in and mediate the collective’s claims. If Facebook and Google’s meddling in Australia’s effort to adopt publisher bargaining rights or moves to withhold news content in Canada are any indication, these legal complaints are likely just the beginning of the collective’s fight.

 But activists hope a suite of bills set to be introduced in the Danish parliament this session will help build momentum for sustainable revenue streams. Those reforms are intended to further bolster the rights of Denmark’s copyright holders—especially in relation to the advent of generative AI. In the meantime, publishers are committed to staying united. “The key thing here is sticking together,” Krab-Johansen insisted, “because together, the tech companies can’t get around us.”

Open Markets and AI Now Host Conference on AI and Monopoly Power

The Open Markets Institute and the AI Now Institute last week hosted a conference, “AI and the Public Interest,” which convened leading lawmakers, law enforcers, technologists, policy experts, and journalists from around the world to discuss AI’s monopoly problem. Speakers included FTC Commissioner Alvaro Bedoya; Doha Mekki, Principal Deputy Assistant Attorney General at the Department of Justice; Member of European Parliament Andreas Schwab; and Christy Hoffman, general secretary of UNI Global Union. Speaking at the event, Mekki warned us to look out for Big Tech’s arguments that essentially say, “we welcome regulation, just not antitrust regulation.” She continued, “We need to be smarter and more concerned about how companies are using data, particularly the proprietary kind.” Bedoya, meanwhile, said he’s keeping a close eye on AI development and “just a few actors already have some advantages because they are vertically integrated.”

Hoffman delivered a keynote in which she spoke out against Bossware and other forms of worker surveillance and algorithmic management to greater control workers. She also cited the recent contracts negotiated by Communications Workers of America and the Writers Guild as transformative in navigating the role of and impacts of AI on workers. Others who spoke at the event included antitrust scholar Tim Wu; legal scholar Zephyr Teachout; investigative journalist Julia Angwin; Laura Edelson, codirector of Cybersecurity for Democracy; and Rana Foroohar, Financial Times global business columnist. You can view the entire event here.

Open Markets Issues Report on the Monopolization of AI by Big Tech

Open Markets and the Center for Journalism and Liberty last week issued a major new report, “AI in the Public Interest: Confronting the Monopoly Threat.” The report, issued at last week’s conference, details how a handful of Big Tech companies have already monopolized the emerging artificial intelligence industry. By exploiting existing monopoly power, these monopolies have already positioned themselves to control the future of AI and magnify many of the worst problems of the digital age. According to the report, these problems include the spread of misinformation and distortion of political debate, the decline of news and journalism, the undermining of compensation for creative work, exploitation of workers and consumers, monopolistic abuse of smaller businesses and challengers, amplified surveillance advertising, online addiction, and the threat to the resilience and security of essential systems. “The real and urgent harms posed by AI cannot be fully understood or addressed without bringing to the forefront of the debate the existing monopoly power of corporations such as Google, Microsoft, and Amazon,” the report reads. The report received coverage in the Financial Times, Euractiv, and Tech Policy Press. Read the full report here.

📝 WHAT WE'VE BEEN UP TO:

• Open Markets senior fellow Johnny Ryan and the Irish Council for Civil Liberties released a new report revealing how sensitive information about key EU and U.S. figures flows to China, Russia, and non-state actors through Google’s Real-Time Bidding system, which is active on almost all websites and apps. The report received coverage in Financial Times, Forbes, Euronews, and Euractiv.

• Open Markets Institute’s Europe director Max von Thun coauthored an article in the Guardian warning that the UK, as well as regulators around the world, needed to more effectively legislate the emerging AI space, rather than let Big Tech firms take the lead. “Antitrust authorities may have failed to prevent digital technologies from being monopolised in the past, but competition policy – if enforced effectively – has a major role to play in tackling AI concentration,” the authors wrote.

• Von Thun also spoke to Digiday about the recent shakeup at OpenAI saying individual companies are “too fickle and unstable to regulate themselves” and that foundation model providers should be held to standards like the one proposed in the EU AI Act. Von Thun also noted that it’s worth questioning whether Microsoft’s relationship with OpenAI will deepen now that former CEO Sam Altman is joining the giant or whether Altman will seek to undermine it.

• The Washington Post quoted Center for Journalism & Liberty director Dr. Courtney Radsch commenting on a proposal by Republican presidential hopeful Nikki Haley requiring social media platforms to verify all users. “We want them to collect even more data and personally identifiable data on Americans? That doesn’t make any sense,” Dr. Radsch said.

• Business Insider quoted Europe director Max von Thun on the EU’s Digital Markets Act aim to prevent new monopolies "before it is too late." "Ironically," he continued, "the platforms designated as gatekeepers are part of industries that are already highly concentrated.

  🔊 ANTI-MONOPOLY RISING: 

• The Department of Justice formally backed a federal lawsuit in Tennessee against real estate software company RealPage filed by renters accusing the company of helping landlords collude to raise rent prices. (ProPublica)

• Congressional progressive caucus chair Pramila Jayapal and House Judiciary Committee ranking member Jerrold Nadler formally urged the Biden administration to take potential federal judicial appointees’ antitrust views into account in the nomination process. The letter follows a series of corporate-friendly rulings in high profile antitrust cases from federal judges appointed by presidents of both parties. (The American Prospect)

• The European Commission is ratcheting up its opposition to Adobe’s proposed acquisition of the cloud-based design platform Figma by preparing an official statement of objections to issue the company. The statement culminates in the Commission’s months-long review of the deal, which observers say could substantially constrict the market for digital design platforms. (Reuters)

• An investor in California has filed a lawsuit against media giant Live Nation Entertainment, based on a claim that the corporation misled investors about the sweeping nature of its anticompetitive practices and thereby exposed them to potential losses. Live Nation’s stock price has fallen sharply in recent months, following a class-action lawsuit and an ongoing investigation by the Department of Justice over the corporation’s monopolization of the live music industry. (Rolling Stone)

• German antitrust authorities opened a probe into Coca-Cola, accusing the U.S. beverage giant of using its rebate structure to push retailers into unfairly advantaging the corporation’s products. (Barron’s)

• The Securities Exchange Commission released a proposal to regulate the digital wallets of leading tech giants like Google and Apple, whose payment systems are quickly approaching the scale of traditional services but currently lack a similar regulatory framework. (Reuters)

  📈 VITAL STAT:

36%

The portion of its ad revenue from Safari search queries Google shared with Apple in 2021. The figure was revealed last week by an expert witness in the Department of Justice’s antitrust trial against Google, which chief executive Sundar Pichai was later forced to confirm. (Washington Post)

📚 WHAT WE'RE READING:

Pharmanomics: Investigative journalist and Global Justice Now Director Nick Dearden dives into the perverse economic structures underlying the global pharmaceuticals market. Dearden explains how powerhouse drug firms abuse patent systems, import and export regulations, and a host of other legal mechanisms to create monopolies on life-saving drugs by extorting the citizens of wealthy nations and denying access to their peers in developing countries in the process. Dearden offers a suite of reforms that could boost innovation and improve the well-being and finances of governments and peoples around the world.

You can find the full job listings here. 

🔎 TIPS? COMMENTS? SUGGESTIONS?

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