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The pandemic is serious. COVID-19 will overwhelm our hospitals. It might break our entire healthcare system. To keep the number of deaths in the low hundreds of thousands, a study from Imperial College London finds, we will have to shutter much of our economy for months. Small wonder the markets have lost a third of their value in a relentless three-week plunge. Grievous and cruel will be the struggle to come.

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There is an infamous chart in media circles. It shows newspaper advertising revenue steadily rising until about the year 2000. A few years later, it drops off a cliff. Superimposed on this chart is the exponential growth of Google and Facebook…

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Yesterday was President Trump’s big “Social Media Summit” where he got together with a number of right-wing firebrands to decry the power of Big Tech to censor conservatives online. According to the Wall Street Journal…

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This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.

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Elizabeth Warren wants to break up the tech giants — Facebook, Google, Amazon, and Apple — claiming they have too much power and represent a danger to our democracy. As part of our response to her proposal, we shared a couple of headlines from 2007 claiming that MySpace had an unassailable monopoly in the social media market.

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In response to the Federal Communication Commission’s (FCC) proposal to rescind its so-called “net neutrality” rules, U.S. Sen. Cory Booker tweeted that the FCC is “giving corporations power over the once neutral internet.”

Booker and his social media allies think the new rules will destroy the internet as we know it. Except, they won’t.

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Summary

Concern about both fake news and the size of Internet mega-platforms like Facebook is popular these days. In each case the concern is intuitively obvious yet the pathway by which it manifests into tangible harm ambiguous. There are clear examples of “fake news” being used for illegitimate purposes, as well as examples of platforms engaging in (or facilitating) alarming behavior – but it is challenging to draw a clean line between such problematic conduct and other non-problematic or even desirable conduct. Better understanding these delineations is a pressing task.

Fake news is largely distributed via social media platforms like Facebook. Indeed, the more malicious of such news is often designed specifically to take advantage of these platforms. It is reasonable to think that the concerns that we have about each may therefore be related – that fake news is a Facebook problem. This is the approach put forth in recent work by Sally Hubbard, who argues that fake news is an antitrust problem. Her basic thesis is that platforms with substantial market-share, such as Facebook, have pushed quality news organizations out of the market and that those news organizations would be better able to compete for consumer attention if there were more competition between platforms like Facebook.

It is a clever and provocative argument. But it is ultimately not a compelling one. Facebook isn’t what’s killing quality news – the Internet did that, and Facebook (and other social media) are merely the deformed phoenices that arose from the traditional media’s online ashes. Facebook and its ilk may be “killing news,” but it is not because these mega-platforms are harming competition – rather, the problem is that traditional media simply cannot effectively compete with social media in the winner-take-all marketplace for consumer attention. This may be a problem – it is certainly an issue that we as a society are and will continue to consider from law and policy perspectives – but it is not an antitrust problem.

I address these issues in more depth in the following three parts. I start by reviewing the evidence about what is killing the news (it’s not Facebook!). I then look at competition in the information economy and at the horizontal and vertical relationships between Facebook and the news media. I then turn the argument on its head, looking at how the problem we face – both with too little quality news and too much fake news – may be better addressed with less competition rather than more.

Throughout this discussion I will treat two recent articles as urtext: Hubbard’s piece in Forbes in which she explains “Why Fake news Is An Antitrust Problem,”2 and a follow-up interview on the topic that she did with Vox.3 I also note that throughout I will follow Hubbard’s lead and use Facebook as the poster-example of a significant social-media platform – though both she and I recognize that other tech platforms operate in this space. Indeed, the fact that Facebook, Twitter, and Google are all important platform-sources of news (fake and otherwise) demonstrates the most basic concern with the argument, that there is no lack of competition for information, true or otherwise.

David Chavern (News Media Alliance, whose members include NYT, WSJ, Tronc (Chicago Tribune, LA Times)), in a July 9, 2017 Wall Street Journal op-ed and subsequent press release, called for an antitrust exemption from Congress that would allow newspapers to negotiate collectively with Facebook and Google for stronger intellectual property protections, better support for subscription models, and a “fair share” of revenue and data.

From his Op Ed, “How Antitrust Undermines Press Freedom: Facebook and Google dominate online ads, and news companies can’t join forces to compete”:

…[E]xisting laws are having the unintended consequence of preventing news organizations from working together to negotiate better deals that will sustain local, enterprise journalism that is critical to a vibrant democracy. News organizations are limited with disaggregated negotiating power against a de facto duopoly that is vacuuming up all but an ever-decreasing segment of advertising revenue.

As part of the argument, the long decline in newspaper advertising revenues are compared to the relatively large control that Facebook and Google have over the online portion of the advertising market as part of an effort to paint online platforms as the sole, or a primary, driver for the decline in the fortunes of newspapers.

Geoffrey Manne joined the ABA Teleconference forum to discuss these issues and their broad antitrust implications. In particular, Mr. Manne noted that:

• It is difficult to today trace a single, important driver of the decline of newspaper revenues in the face of changing consumer preferences in news consumption such that coordination among large publishers would “fix” current revenue problems.
• Complicating this analysis is the fact that the first, and the largest, drop in newspaper ad revenue happened well over a decade ago when sites like Craigslist and eBay displaced newspapers as the long dominant players classified ads.
• Newspapers already collect upwards of 70% of the advertising revenue on Google’s and Facebook’s networks — the remaining share to be collected would barely put a dent in the ad losses attributed to alternative classifieds.
• The benefits of permitting (or more likely facilitating) this sort of group action are unclear given the large competition on every level of the news industry from local news to national news to topic-specific blogging.
• Moreover, any facilitation of coordination in this manner is more likely to benefit the large incumbent papers to the detriment of smaller news producers — a tradeoff that is likewise unclear (and probably negative) in its effects on consumer welfare.

The full call is embedded below.

https://laweconcenter.org/wp-content/uploads/2018/03/Manne-et-al-ABA-Teleconference-on-Newspaper-Antitrust-Exemption-2017.mp3

 

 

Last week the editorial board of the Washington Post penned an excellent editorial responding to the European Commission’s announcement of its decision in its Google Shopping investigation. Here’s the key language from the editorial…

Read the full piece here.