Newspapers vs Big Tech: Antitrust Tackles the Problems That Copyright Just Can’t Fix

More than 200 newspapers have filed suit against Google and Facebook (AKA “Meta”), alleging that the tech giants colluded to rig ad markets so that they could misappropriate ad revenues that were properly owed to the publishers.

Strip away all the ornamental complexity and it’s obvious that the surveillance advertising industry is designed to shift value from advertisers and publishers to Big Tech

The evidence that Google and Facebook rigged this market is strong. Strip away all the ornamental complexity and it’s obvious that the foundations of the surveillance advertising industry are designed to shift value from advertisers and publishers to the tech companies that operate the “real time bidding” exchanges that process hundreds of billions in ad dollars.

The UK Competition and Markets Authority’s wide-ranging and comprehensive study of the ad-tech marketplace found many ways in which these markets were rigged to the detriment of publishers, and unsealed documents from antitrust prosecutions in the USA revealed explicit, undeniable collusion between the tech giants.

Together, Google and Facebook command 80% of the search and online display advertising market. Either one is in a position to bend that market to their advantage. Together, they are devastating, as the newspapers’ briefs show. How did they attain this remarkable scale? 

Primarily, they bought that dominance. The tech giants – like the industrial giants that dominate virtually every sector of the economy – bought up their nascent rivals and merged with their largest competitors, until for many people, the internet was reduced to five giant websites, filled with screenshots of text from the other four.

The plain language of America’s antitrust laws prohibit these kinds of mergers, but for forty years, that statutory language has been ignored in favor of a weak, ineffectual “consumer welfare” standard. This standard permitted runaway mergers and acquisitions and celebrated the market concentration that emerged from it as “efficient.”

Thankfully, the tide has begun to turn against “consumer welfare.” Last summer, the Biden administration officially announced its intention to enforce antitrust law beyond the narrow confines of consumer welfare. Congress wants to end Big Tech’s acquisition shopping-spree, which saw tech giants buying companies more often than most of us buy groceries. The movement to reinvigorate antitrust law is not merely an American affair, either: the UK Competition and Markets Authority just ordered Facebook to sell off Giphy, a nascent competitor that would have given Facebook the ability to monitor users of competing, non-Facebook social media services. In Europe, the EU Parliament’s proposed Digital Markets Act seeks to curb tech’s power over its users, its regulators, and its supply chain. 

That supply chain includes the newspapers, of course. 

Newspapers are right to be concerned that Facebook and Google had rigged the system and misappropriated billions that were owed to them. It’s wonderful to see the press calling out market concentration as a threat to economic liberty and a source of rot and corruption within markets. 

It’s also a very welcome evolution of the media’s longstanding position that the problem with the tech giants was their failure to pay for the privilege of linking to newspapers. This is just wrong: the tech giants aren’t stealing publishers’ content – they’re stealing publishers money

That’s a distinction with a difference. Laws that make tech pay for links – like the European Copyright Directive of 2019  – only strengthen Big Tech’s monopoly, by pricing links out of the budget of potential competitors. 

Competition problems need to be fixed with competition law, not copyright.

Giving newspapers a special copyright (or a new copyright-like legal tool) that lets them dictate who can utter the factual statement that “a news story exists at this URL” won’t correct the power imbalance that lets a monopolized tech sector rip off publishers. Competition problems need to be fixed with competition law, not copyright.

After all, the newspaper industry has its own competition problem. Vulture capitalists have bought and looted hundreds of newspapers across the country (and elsewhere, including Canada). A link tax lets these new finance-sector owners increase their balance sheets without actually investing in news, by shifting billions from tech monopolists’ bank accounts to media monopolists’ side of the ledger.

By contrast, unrigging the ad markets will provide billions to the newspapers that invest in the most important, widely read news stories. Ad markets have a competition problem, so fixing them with competition law makes sense.

Ad markets also have a surveillance problem. Big Tech’s addiction to spying on us and their billions of nonconsensual dossiers about our lives and preferences have distorted the ad market such that nearly all advertising today is targeted on the basis of behavior (who you are) rather than context (what you’re reading). 

America is long overdue for a federal consumer privacy law with a private right of action

That could change: America is long overdue for a federal consumer privacy law with a private right of action (which would give you the right to sue companies that broke the law, rather than waiting for a government agency to take up your case). An ad marketplace stripped of surveillance can thrive, and what’s more, such a market would especially benefit newspapers, whose articles are rich in the kind of context that is perfect for contextual advertising.

Ending the surveillance business model would be good for newspapers—and bad for Big Tech. Google and Facebook’s vast repositories of private information currently sit on their balance sheets as assets to be monetized. Prohibiting data-processing without consent would strand those assets, turning them into toxic waste.

In other words, part of the tech giants’ leverage over newspapers is data, which they treat as the “new oil.” A privacy law would force these companies to recognize that their data isn’t a stockpile of oil – it’s a pile of oily rags.“Saving news” is a matter of weakening tech’s ability to misappropriate newspaper revenues, and structuring markets to reward newspaper reporting. Copyright is largely irrelevant to both of those tasks. Competition and privacy law, on the other hand, are key.

Source: Newspapers vs Big Tech: Antitrust Tackles the Problems That Copyright Just Can’t Fix

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