- The Washington Times - Monday, July 10, 2017

Some of the country’s big newspapers are plotting a strike at Google and Facebook, hoping to get an antitrust exemption from Congress to negotiate collectively with the digital giants over advertising revenue.

Newspapers’ ad revenue has tumbled over the last decade as Facebook and Google have grabbed the vast majority of the digital advertising market.

Facing those pressures, the News Media Alliance, a nonprofit organization that represents roughly 2,000 national and local newspapers that includes The New York Times, Wall Street Journal and Washington Post, has started reaching out to Capitol Hill to sound out the chances for an exemption.

Without one, they could risk triggering Justice Department scrutiny for violating antitrust laws.

“We’re not looking to break up Google and Facebook by saying they have a duopoly here, what we are saying is there has got to be a way to improve the business model,” said Paul Boyle, senior vice president of public policy at News Media Alliance.

Newspapers had thought allowing their articles to be shared on social media would earn them a piece of the digital ad market, but Facebook doesn’t always allow the reader to click through to the publisher’s website, denying the news website ad revenue from that reader, Mr. Boyle said.

“For us to provide [Google and Facebook] with the value of content that is very expensive to produce, we need to rein back value to that content,” he said.

The big digital companies have also been able to collect data that allows them to better target advertisers and consumers.

Google and Facebook control nearly two-thirds of the digital advertising industry, according to data from Pew Research, and newspaper revenue from advertisements declined to $16 billion in 2016, down from about $50 billion 10 years earlier, according to CNBC.

That comes even as the digital audience for newspapers’ content has soared during that time.

“Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70% of the $73 billion spent each year on digital advertising, and they eat up most of the growth. Nearly 80% of all online referral traffic comes from Google and Facebook. This is an immensely profitable business,” wrote David Chavern, president of News Media Alliance, in a Wall Street Journal op-ed Sunday.

In the piece, Mr. Chavern argued that if Congress permits the newspaper industry to negotiate collectively with the social media companies, the quality of the news industry will improve.

Campbell Brown, the head of News Partnerships at Facebook, said the company is committed to helping quality journalism thrive on its platform and has already been working with publishers.

“We’re making progress through our work with news publishers and have more work to do,” she said.

Google also said it wants to help news publishers succeed.

“In recent years we’ve built numerous specialized products and technologies, developed specifically to help distribute, fund, and support newspapers,” Google’s press team said in a statement emailed to The Washington Times. “This is a priority and we remain deeply committed to helping publishers with both their challenges, and their opportunities.”

Mr. Boyle said although the companies meet with individual publishers, a full solution will require newspapers acting as an industry. That could require the congressional antitrust exemption.

Herbert Hovenkamp, a law professor at University of Pennsylvania, noted that Congress rarely has granted antitrust exemptions, and when it has, he said, there usually had been a legal case finding an antitrust violation.

“There’s not even a 10 percent chance that a bill like this would get passed,” said Mr. Hovenkamp. “But 10 percent is not zero.”

 

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