Washington Monthly - The Must-Carry Solution for the Media’s Google Problem
CJL director Courtney Radsch wrote an article emphasizing Google's need to pay news organizations for the media content it uses to fuel its lucrative and monopolistic search and ad businesses.
Earlier this month, a federal district court judge confirmed what we’ve known for years—Google is a monopoly, and its anti-competitive search and advertising practices violate antitrust laws. In one of the most critical lawsuits of this century, the Department of Justice won its case against the tech giant by proving that the company used exclusive deals to secure its position as the default search engine on browsers and mobile devices. Because of its market dominance, the Mountain View, California-based company could charge “supracompetitive” rates for text ads.
The ruling from Judge Ahmet P. Mehta of the U.S. District Court for the District of Columbia is a big deal, not only for the tech industry and consumers who have had limited options for online search but also for those who depend on search engines to reach audiences. Google’s search engine, which claims 90 percent of the search market, has become the hub of a digital advertising empire that generates more than $200 billion annually for the tech giant.
This monopolistic stranglehold is why we need laws that require Google to pay for the content that makes search so valuable not only for its ad business but also to build its artificial intelligence products. We also need legislators to prevent tech giants from retaliating against those who depend on them.
Although Judge Mehta’s ruling, which Google is appealing, did not specifically address the company’s impact on journalism, its search monopoly gives it significant control over the discovery and distribution of news. This makes it difficult for would-be competitors to develop alternative and perhaps lucrative ways to surface and rank journalism on search that would have buoyed the sector’s financial viability.
As media outlets increasingly depend on Google to reach audiences and advertisers, their revenues nosedived. Advertising revenue plummeted by more than 50 percent between 2002—the year Google News launched—and 2020. Google, which controls 70 percent of the ad-tech market alongside Meta, the parent company of Facebook, is facing a separate lawsuit that will go to trial next month.
To forestall any efforts to be compensated for its use of news content to fuel its AI development, Google, whose parent company Alphabet has a market capitalization of over $2 trillion (equivalent to the GDP of Italy), is threatening to prevent news publishers from appearing in its search results in California because Golden State Lawmakers have been working on legislation to support journalism that would correct some market imbalances between Big Tech and news publishers. The remedies imposed by the court could also help with this. This week, Google apparently convinced California lawmakers to accept a $125 million payout to a new nonprofit journalism fund over five years rather than address the structural issues that its monopoly poses to sustainable journalism business models.
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