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May 24, 2022

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Dudley: Antitrust cases heating up

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Antitrust cases against Google and Facebook are gathering steam, with new revelations and progress in what should be pivotal lawsuits against Big Tech.

This is critical to saving local journalism. Ending unfair competition by dominant online companies is necessary to revive America’s independent, free-press system.

Local newspapers are generally on their way to transitioning to digital advertising. They also depend on tech platforms to market themselves, reach new customers and provide a suite of advertising products.

Yet this evolution toward sustainable business models is hindered when two companies monopolize and manipulate digital ad markets to their advantage, as alleged in state, federal and private antitrust cases. This skewed situation also helps explain why newsroom layoffs and closures continue, despite soaring readership during the pandemic.

Google, which dominates the primary system for buying and selling online display ads, manipulated the system and deceived advertisers, according to material unsealed in a case brought by a Texas-led coalition of state attorneys general.

If affirmed by courts, this would mean more than just publishers were harmed. Such conduct harms consumers because it leads to higher prices and fewer product choices.

That came days after Facebook received a setback in a federal court, where a judge decided that the Federal Trade Commission made valid arguments that Facebook abused its monopoly and the FTC’s antitrust case should proceed.

One of the most troubling revelations are allegations that Google and Facebook made a secret deal that stifled competition. “Look, we’ve got a home run here,” Michael Fuller, a Puerto Rico-based attorney representing a coalition of newspaper publishers pursuing a private antitrust against the companies, told me last week.

Both companies vigorously deny allegations. They are pushing back on an array of antitrust legislation proposed, including a bill to prohibit self-preferencing by large platforms.

For those looking to save local journalism, all of the above are necessary: Successful enforcement of antitrust laws to level the playing field and regulatory reform to ensure fair competition going forward.

Newspapers also need to be fairly compensated by others profiting from their investments in journalism. Australia and some European countries are addressing this with policies requiring Google and Facebook to negotiate content licensing arrangements; a similar proposal was made in Congress last year but hasn’t yet proceeded.

While antitrust efforts have momentum and attention, they will take years to resolve and implement any changes.

In the interim, first aid is needed to stop the bleeding, such as temporary tax credits to save remaining local journalism jobs. Otherwise, the patient may not be around long enough to be helped by the longer-term cures pursued in courts and Congress.


Brier Dudley is editor of The Seattle Times  Save the Free Press Initiative. Email bdudley@seattletimes.com

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