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Google and Facebook Must Pay for Local Journalism
The U.S. should emulate the French government’s resolve to fight for the news media industry.
Much of the news business is being hammered by the decline in advertising because of Covid-19, just when the public most needs reliable information. While digital audiences are way up, the rapid contraction in revenue has so far caused 33,000 news media employees to be furloughed, to be laid off or to suffer reduced pay.
But in the midst of this crisis, something very good just happened for journalism: French antitrust authorities ordered Google to negotiate with publishers to pay for the news content shown in search results. It is the first time that a major digital platform has been required to pay for news anywhere.
France’s action stems from a new European Union Copyright Directive, and Germany and other countries will be next. This means that in the United States, the pressure to similarly compensate stressed local publishers will be extremely high.
There are several ways the pressure on Google could be brought to bear. If Congress passes the Journalism Competition and Preservation Act, publishers would be allowed to negotiate rates with Google as a group. Alternatively, publishers might finally be forced to undertake their own lengthy copyright litigation. In any case, I believe that Google will eventually be required to treat news publishers, like music publishers, as equals.
We have argued for some time that the big tech platforms should be an answer for journalism, rather than a problem. They are the main distributors of news and they benefit greatly from the engagement that comes with it. Just think of all of the hundreds of millions of people who went to Google and Facebook over the last few months for information about the coronavirus.
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These platforms pay for music and lots of other kinds of content, and last year Facebook even agreed to pay a limited number of publishers for its News Tab. But most local publishers were left out of that deal. And Google has refused to pay them anything.
A group of French publishers didn’t accept that situation and brought a case against Google with the French competition regulator in November. On April 9, the regulatory agency decided that Google had abused its tremendous market power by refusing to negotiate. This decision is part of a larger, continuing competition investigation into Google. Once again, Europeans have been willing to be the first to address the power of the online platforms.
Google’s market share of search in France was 90 percent at the end of 2019, and data provided by more than 30 French publishers showed that between 26 percent and 90 percent of their referral traffic came through search engines, mainly Google. Google likes to claim that referral traffic is a huge benefit to publishers, even though it dominates the digital ad system and captures most of the benefit from that traffic.
Every democratic country should emulate the French government’s resolve to fight for the freedom and future of the news media industry. On Sunday, Australia instructed their competition commission to develop a mandatory code to address commercial arrangements between digital platforms and the news media. This code will deal with data, ranking, news display and “the monetization and the sharing of revenue generated from news.”
The digital platforms have a choice to make. They can get on the right side of history, quickly negotiate deals and help sustain journalism. Or they can fight and delay, while watching huge segments of the local news ecosystem wither and die in the meantime.
With Covid-19, which has severely reduced newspaper revenue as advertisers struggle with lockdowns, we are likely to lose hundreds of newspapers in the United States this year. If Facebook and Google are the good guys they say they are, they should skip the blood and the blame and jump right to the inevitable, fair conclusion. Pay for news now and help local journalism survive.