Cicilline Opening Statement for Antitrust Subcommittee Hearing

Mar 12, 2021 Issues: Consumer Protection and Financial Reform

WASHINGTON – Antitrust Subcommittee Chairman David Cicilline’s (RI-01) opening remarks for today’s hearing, Reviving Competition Part 2: Saving the Free and Diverse Press, are embedded below.

David N. Cicilline
Journalism Protection Hearing Opening Statement
March 12, 2021

A free and diverse press is the backbone of a vibrant democracy.

Indeed, our democracy is strongest when we have a free and diverse press that informs citizens, holds power to account, and exposes corruption and wrongdoing.

But in recent years, the local news that is delivered through newspapers, online, and in local broadcasts has been in a state of economic freefall.

Over the past 15 years, one in five newspapers closed, and the number of journalists working for newspapers has been cut in half. In 2019, America reportedly lost 2100 newspapers since 2004. Today, at least 200 counties have no local newspapers at all.

The crisis in American journalism has become a real crisis in our democracy and civic life.

Newsrooms across the country are laying off reporters and editorial staff or folding altogether, while the majority of counties in America are down to just a single publisher of local news—and many lack a local news option altogether.

In my home state of Rhode Island, news circulation of our state-wide newspaper has declined by 54% since 2004.

This is happening to legacy news companies and digital publishers alike.

Earlier this week, in the wake of an acquisition, the Huffington Post—a digital publisher—laid off dozens of journalists due to declining advertising revenue.

Unfortunately, they are not alone.

Last year, digital publishers furloughed or laid off dozens of reporters and other newsroom staff. These layoffs occur at a time when more people are online than ever before, and online readership is at an all-time high.

This decline has also accelerated in the wake of the pandemic at a time when local journalism is more important than ever. As Jonathan Schleuss (“SHLUSS”) will testify today, “We are truly facing an extinction-level event for local news.”

If this trend continues, we risk permanently compromising the news organizations that are essential to our communities, holding the government and powerful corporations accountable, and sustaining our democracy.

In response to these concerns, the Subcommittee examined the effect of market power of the largest technology platforms on the survival of a free and diverse press as part of our bipartisan investigation last Congress.

During our inquiry, we received evidence about the “significant and growing asymmetry of power” between several dominant online platforms and news publishers.

In numerous interviews, submissions, and testimony before the Subcommittee, publishers and broadcasters with distinct business models and distribution strategies said they are “increasingly beholden” to Google and Facebook, which increasingly function as the gatekeepers for information online.

For example, Digital Content Next—which represents digital news publishers and content companies—notes in a statement for the record for today’s hearing that 64% of online referrals to its premium publishers came from services owned by Facebook or Google, underscoring the “extraordinary role” of these companies in “how the public discovers, searches and spreads information.”

According to the Pew Research Center, nearly three-quarters of Americans get their news online, through either Facebook or Google.

As news publishers have noted, this gatekeeper power gives Facebook and Google the ability to distort the flow of information online.

This means that Google and Facebook can divert their billions of users away from trustworthy sources of news with a single change to their algorithms, or through other subtle but meaningful ways, such as manipulating ad auctions.

A second, related problem that we identified during the investigation is the market power of these firms over digital advertising. Facebook and Google control the majority of the online advertising market in the United States, and have captured nearly all of the growth in this market.

Every year, advertisers pay billions of dollars to these two companies to serve highly targeted ads on Facebook and through Google’s advertising network.

Nearly a dozen Republican state attorneys general who are currently suing Google for monopolization described Google’s advertising network as the “largest electronic trading market in existence.”

These companies continue to enjoy persistently high profit margins—a telltale sign of their substantial and enduring market power. At the same time, news publishers have seen a steep decline in revenue and a reduced ability to monetize journalism, particularly when it comes to these sources online.

Overall, the market power of Google and Facebook is reinforced by the unprecedented amount of data collected by these companies, along with other factors that have tipped digital markets in favor of these firms and blocked rivals and new entrants from challenging their dominance.

The findings of other antitrust investigations bolster these conclusions.

For example, the Australian Competition and Consumer Commission, which conducted its own extensive investigation into this matter, similarly noted in their exhaustive 2019 report that Facebook and Google have substantial market power over channels for accessing news online and digital advertising.

In a statement for today’s hearing, Rod Sims, the Chair of Australia’s competition authority, notes that the platforms’ gatekeeper role was underscored by Facebook’s decision to “block large swathes of Australian content including news during their negotiations with our Government regarding Australia’s bargaining code.”

Similarly, the United Kingdom’s Competition and Markets Authority concluded after its own inquiry, that insufficient competition in digital advertising “undermines the ability of newspapers and others to produce valuable content, to the detriment of broader society,” which “can lead to wider social, political and cultural harm through the decline of authoritative and reliable news media, the resultant spread of ‘fake news’ and the decline of the local press which is often a significant force in sustaining communities.”

With that in mind, today’s hearing is an opportunity to examine solutions to this urgent problem.

Earlier this week, I reintroduced the Journalism Competition and Preservation Act with Ranking Member Buck. Our legislation would give news publishers an even playing field to collectively negotiate with dominant platforms to improve the quality, accuracy, attribution, and functioning of news online.

As part of today’s hearing, I look forward to discussing recommendations to strengthen and improve this legislation.

In particular, I am eager for a discussion on ensuring that this framework will provide for good-faith negotiation by all parties, and mechanisms to ensure that each and every hardworking journalist benefits from these negotiations.

While I do not view this legislation as a substitute for more meaningful competition online—including structural remedies to address the underlying problems in the market—it is clear that we must do something in the short term to save trustworthy journalism before it is lost forever. This bill is a life support measure, not the answer for ensuring the long-term health of the news industry.

We need an all-of-the-above approach to save journalism and to take on monopoly power. Doing nothing is not an option.

In that vein, I’m also eager to hear other suggestions to reign in the power of these monopolies. At our last hearing, we heard bipartisan agreement from the members of our Subcommittee on structural separation, preventing self-preferencing and discrimination, and interoperability and data portability requirements.

Congressional inaction and insufficient enforcement levels have led to waves of consolidation and layoffs by reporters at both digital and print publishers alike. And in the absence of a competitive marketplace or congressional action, there will continue to be mass consolidation and widespread layoffs.

As the events leading up to the violent mob’s attack on the Capitol on January 6 have made clear, the stakes are high. Our country will not survive if we do not operate with a set of shared facts, if corruption is not exposed and rooted out at all levels of government, and if power is not held to account.

As Justice Louis Brandeis wrote in 1927, those who won our independence believed that public discussion is a political duty, that the greatest threat to freedom is an uninformed citizenry, and that the freedom of thought and speech are indispensable to the discovery and spread of political truth.

This is the very reason the press is called the Fourth Estate. Whether it’s an online publisher, national newspaper, or local broadcaster, we cannot have a democracy without a free and diverse press.

In closing, I look forward to today’s hearing and learning more from our esteemed panel of witnesses.