The Corner Newsletter: April 26 , 2024
Welcome to The Corner. In this issue, we explore what news publishers seeking to be paid by Google and Facebook for news can learn from broadcast media’s fight with cable providers in a previous era.
What News Publishers Fighting Big Tech Can Learn from Broadcast Media
Austin Ahlman
Google last week announced that it had begun to prevent some users of its platform in California from sharing news links with one another. The move marked a drastic escalation in the corporation’s fight to kill the California Journalism Protection Act (CJPA), a proposed bill that would mandate that dominant tech platforms pay news organizations for the stories they distribute. Facebook has threatened to follow suit should the bill become law, setting up a legal showdown that puts the American people’s right to access reliable, high-quality news in jeopardy.
The tactics mirror the ones Facebook and Google have deployed to undermine efforts in Australia, Canada, and other democracies that have moved to force these online gatekeeper corporations to pay for the news they distribute, and from which they profit through the sale of advertising. If successful, such actions would essentially force these corporations to scale back or even abandon business practices that have diverted billions of dollars in advertising revenue from newsrooms around the world.
The platforms have deployed several talking points to support their attacks on such bargaining codes. One is that there is no precedent for mandating payments for retransmission of content. A second is that it is impossible to negotiate with hundreds or of media organizations.
But neither of these arguments holds up to close scrutiny. In fact, one potential model for such news publishers is a long-time policy that has governed the relationship between local over-the-air (or OTA) television channels and cable providers. Thanks to the Federal Communications Act’s focus on ensuring a level the playing field between media organizations and distributors, cable networks like Comcast must include all the local OTA channels in the regions in which they operate.
The Communications Act, which was originally passed in 1934, was amended multiple times in the 1980s and 1990s to account for the power of cable providers, culminating in the Cable Television Consumer Protection Act of 1992. That amendment created the present requirement for cable networks to negotiate in “good faith” with local broadcast stations for the redistribution of their content. Though these broadcasters’ channels are often free to access over the air, the framework acknowledges that the content they provide adds substantial value to cable networks that must be shared directly with local stations. Cable has long been the primary distributor of broadcast news.
Crucially, the local stations are also entitled to prime channel slots in recognition of the role local media plays in connecting communities and fortifying our democracy. The laws also make clear that the Federal Communications Commission is fully empowered to step in and enforce the requirements.
While the interests of broadcast and print media organizations do not always align, they have largely been in lockstep over the need for state and local legislation like that in California, which is designed to provide the broadcasters and publishers with the bargaining power necessary to force the platforms to pay for their content. At a Senate hearing earlier this year on the implications of artificial intelligence for the rapidly constricting news media industry, National Association of Broadcasters President Curtis LeGeyt and News Media Alliance President Danielle Coffey presented a unified front in their calls for the adoption of the Journalism Competition and Preservation Act (JCPA), the national bill that inspired the CJPA.
In that hearing, LeGeyt specifically drew a connection between local broadcast stations’ rights under the current carriage agreement framework as a clear precedent for mandating platforms to negotiate in good faith for news content. He also pushed back on claims by Google and Facebook that it is not possible for them to negotiate fair deals with hundreds or even thousands of media organizations.
“Over the last three decades, local television broadcasters have done literally thousands of deals with cable and satellite systems across the country for the distribution of their programming,” he told the committee. “The notion that… it is too complicated to license from such a diverse array of content owners just doesn’t stand up.”
LeGeyt emphasized that if legislators really want to balance the playing field, they need to create a framework that forces platform monopolies to the table in the same way cable companies once were. “The most meaningful thing Congress could do tomorrow to address some of these stresses on local newsrooms,” he said, “is to pass the JCPA.”
Open Markets Institute Lauds Final FTC Rule to Ban Noncompete Clauses
The Open Markets Institute strongly applauded the Federal Trade Commission for issuing a final rule to ban noncompete clauses for nearly all workers, the fruition of a years-long advocacy campaign by Open Markets and a few key allies. “The FTC’s decision to free tens of millions of workers from non-compete clauses is an incredible moment in the fight against corporate power and the arbitrary authority of bosses,” legal director Sandeep Vaheesan said. “The noncompetes ban demonstrates how competition policy and agencies that enforce it, like the FTC, can make life materially better for America’s workers and professionals.” Vaheesan was quoted on the ban’s significance in Washington Post, The American Prospect, Bloomberg Law, and Common Dreams.
Vaheesan was an early thought leader on the FTC’s ability to use its rulemaking capacity to ban non-compete agreements. He has written extensively about the harms of these restrictive clauses on workers and innovation — and how the law favors banning them. In the year since the FTC proposed its noncompete ban, Vaheesan advocated for the closing of loopholes that function as noncompetes like training repayment agreement provisions, or TRAPs. In its final rule, the FTC banned many such contracts, including many TRAPs. In March 2019, the Open Markets Institute spearheaded a petition joined by Public Citizen, the AFL-CIO, SEIU, and other labor unions, calling on the FTC to enact a regulatory prohibition on noncompete contracts.
Open Markets Hosts Conference in Brussels to Discuss How EU Can Tackle Monopoly Power
Last week, the Open Markets Institute and a coalition of ally organizations in Europe brought together leading policymakers and thinkers for a half-day conference in Brussels, to discuss how the European Union can more effectively address the threats posed by monopoly control over markets and democracies. OMI and its allies also published a manifesto ahead of the event to outline how to put anti-monopoly at the heart of the next European Commission’s policy agenda. The conference discussed the importance of a “whole-of-government” approach to concentration, and the need for a new competition tool at the EU level that would enable the European Commission to investigate competition problems across entire industries, not just individual companies or cartels. Also discussed were the role of monopoly power in weakening and distorting innovation, especially in relation to artificial intelligence, and the need to crack down on non-compliance with the EU’s Digital Markets Act by Big Tech firms. Watch a video of the conference here.
CJL Director Leads Panel at International Journalism Festival, “Can Journalism Survive AI?”
Center for Journalism & Liberty director Dr. Courtney Radsch moderated a panel entitled “Can Journalism Survive AI?” at the annual International Journalism Festival, held last week in Perugia, Italy. Panel participants, which included investigative journalist Julia Angwin, data reporter Dhruv Mehrotra, and Meredith Broussard from the Arthur L. Carter Journalism Institute, discussed the existential challenges AI poses to the future of the news industry if Big Tech is allowed to appropriate content with impunity and deals are made too quickly without considering journalism's full value proposition.
📝 WHAT WE'VE BEEN UP TO:
Open Markets Europe director Max Von Thun gave a keynote speech entitled "Big Tech, AI, and Europe’s Digital Sovereignty" at the European Data Summit, held last week in Berlin. The keynote highlighted the growing levels of concentration in the AI technology stack, and the risks this poses to European sovereignty, security, and prosperity. Von Thun also joined a panel to discuss the digital priorities of the next European Commission, alongside member of the European Parliament Damian Boeselager and Raphaël Daniel from OVHcloud.
Von Thun was also interviewed on Euractiv’s “The Tech Brief” podcast, where he discussed how Europe can better approach competition policy and directed listeners to a recently published manifesto, which outlined how the European Union can put antimonopoly at the heart of its policy agenda.
Open Markets senior legal analyst Daniel Hanley called for the enforcement of the all-but-lapsed Robertson-Patman Act (RPA), enacted in the 1930s, on a podcast from The Checkout. Hanley discussed the RPA’s ability to level the playing field for small retailers competing against the likes of Walmart and Amazon. Last year, Open Markets released two papers making the case for the U.S. government to revive enforcement of the Robinson-Patman Act in order to help build a fairer, more open, and more decentralized economy.
NPR quoted from an article written by Center for Journalism & Liberty Dr. Courtney Radsch for CalMatters, in which she attributed declining journalism revenues to digital advertising monopolies. "For more than a decade, tech giants built the world's most valuable companies off the backs of journalists while siphoning off revenue from news publishers by creating digital advertising monopolies,” she wrote. Her statement was also reprinted in Yahoo! News.
Dr. Radsch was also quoted in Daily Democrat urging lawmakers to take action against Google’s undemocratic threats to shut off news access in California in the midst of an election year. “They have retaliated, harassed and used their power to subjugate democratic processes that are aimed at securing the future of an essential democratic institution,” she said.
Open Markets executive director Barry Lynn spoke at the 2024 Stigler Antitrust Conference at the University of Chicago, which focused on “Antitrust, Regulation and the Diffusion of Innovation.” Lynn participated in a panel titled “The End of the Beginning for the Antimonopoly Movement?,” along with Zephyr Teachout, Cristina Caffarra, Matt Stoller, and Sohrab Ahmari.
In response to the Senate’s vote to force the China’s ByteDance to divest TikTok in the United States, Lynn said it was critical that policymakers looked beyond TikTok to the threats to national security and democracy posed by the surveillance- and manipulation-driven business models of Facebook, Google, and other dominant online platforms. “It is imperative that Congress leverage today’s vote to immediately begin a complete overhaul of a U.S. legal regime that continues to allow powerful corporations — domestic as well as foreign — to control what citizens read and how they debate with one another,” Lynn said.
🔊 ANTI-MONOPOLY RISING:
New York state legislators took a major step to fortify the business models of the state’s journalism organizations by passing first-of-their-kind tax credits for newsrooms to retain journalists. The bill is expected to help insulate newsrooms from the increasingly hostile tactics Google and Facebook have used to avoid compensating news publishers for use of their content. (Axios)
The United Kingdom’s Competition and Markets Authority announced a preliminary inquiry into Microsoft and Amazon’s investments and increasingly tight relationships with emerging AI companies Mistral AI and Anthropic, as well as a review of Microsoft’s hiring of several Inflection AI employees. (TechCrunch)
In a unanimous decision, the Federal Trade Commission announced its intention to block the proposed acquisition of Capri Holdings by Tapestry, Inc. The merger of the fashion holding companies would bring key brands like Kate Spade, Coach, and Michael Kors under the same corporate entity, which Commissioners argued would substantially distort the market for mid-range luxury items. (Business Insider)
The Japan Fair Trade Commission ordered Google to relax restrictions on Yahoo Japan Corp’s use of Google’s search engine and advertising offerings. It is the first administrative enforcement action Japanese competition authorities have pursued against Google, and the body’s ongoing probe into Google’s anti-competitive actions is set to continue following its issuance. (Associated Press)
The Department of Justice, Federal Trade Commission, and the Department of Health and Human Services teamed up to launch a public portal that will streamline reporting of anti-competitive practices across the industry and facilitate collaboration across these departments to quickly crack down on these abuses. (The National Law Review)
The Federal Communications Commission voted to reinstate net neutrality provisions that limit telecommunications providers from throttling or discriminating against legal content. However, open internet advocates have warned the current model is not as comprehensive as previous net neutrality efforts, which banned such practices altogether. (New York Times)
📈 VITAL STAT:
27%
The percentage in fees that would go to Apple when users of music streaming services opt to purchase digital goods or services outside of Apple under a proposal to let Spotify and other such services inform users of payment options outside its App Store. (Reuters)
📚 WHAT WE'RE READING:
Our Biggest Fight: Reclaiming Liberty, Humanity, and Dignity in the Digital Age — Property developer and sports entrepreneur turned tech reformer Frank H. McCourt and journalist Michael J. Casey discuss how a small group of tech monopolies has systematically destroyed the utopian vision for the internet that guided early engineers and creators. They present a number of potential solutions to radically change the structure of the tech giants and digital markets in the hope of restoring the vision of an open and democratic internet.
🔎 TIPS? COMMENTS? SUGGESTIONS?
We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue.