Tech Transformers

Newspapers to bid for antitrust exemption to tackle Google and Facebook

Key Points
  • Newspaper industry teams together to seek antitrust exemption from Congress in an effort to negotiate collaboratively with Facebook and Google.
  • News Media Alliance has launched the campaign which will see titles including The Washington Post and the Wall Street Journal reach out to federal lawmakers this week.
  • The bid to circumvent the law is an effort to safeguard free press, campaigners say.
In this photo illustration a selection of UK national newspapers are displayed together on October 30, 2013 in London, England.
Dan Kitwood | Getty Images

The news industry is to band together to seek a limited antitrust exemption from Congress in an effort to fend off growing competition from Facebook and Google.

Traditional competitors including The Washington Post, The Wall Street Journal and The New York Times, as well as a host of smaller print and online publications, will temporarily set aside their differences this week and appeal to federal lawmakers to let them negotiate collectively with the technology giants to safeguard the industry.

Antitrust laws traditionally prevent companies from forming such an alliance which could see them becoming over-dominant in a particular sector. However, the media companies will be hoping that Congress will look favorably on a temporary exemption, particularly giving the recent clampdown on the technology industry which saw Google slapped with a $2.7 billion antitrust fine.

The campaign is led by newspaper industry trade group News Media Alliance and it is intended to help the industry collaborate in order to regain market share from Facebook and Google, which have been swooping in on newspapers' distribution and advertising revenues.

The two companies currently command 70 percent of the $73 billion digital advertising industry in the U.S., according to new research from the Pew Research Centre. Meanwhile, U.S. newspaper ad revenue in 2016 was $18 billion from $50 billion a decade ago.

View Pictures | UIG | Getty Images

The News Media Alliance argue that, despite their growing dominance in news distribution, Facebook and Google lack the resources and ability to guarantee the accuracy of reporting upheld by reputable news associations. Facebook in particular came under fire during the 2016 U.S. presidential election when it failed to suitably monitor the news content on its platform and was seen to host unverified articles.

"(Facebook and Google) don't employ reporters: They don't dig through public records to uncover corruption, send correspondents into war zones, or attend last night's game to get the highlights. They expect an economically squeezed news industry to do that costly work for them," David Chavern, president and chief executive of the News Media Alliance, wrote in anopinion piece published Sunday in the Wall Street Journal.

"The only way publishers can address this inexorable threat is by banding together," he continued.

"If they open a unified front to negotiate with Google and Facebook — pushing for stronger intellectual-property protections, better support for subscription models and a fair share of revenue and data — they could build a more sustainable future for the news business."

Chavern added that antitrust laws are currently "insulating" Google and Facebook from market forces, but said that news publishers remain committed to "unleashing those forces to defend their investments in great journalism."

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When contacted by CNBC Monday, Facebook's head of news partnerships, Campbell Brown, said the business, which recently celebrated 2 billion users, was committed to aiding quality journalism.

"We're committed to helping quality journalism thrive on Facebook. We're making progress through our work with news publishers and have more work to do," Brown said via email.

Google added that it wanted to support the news industry's continued transition towards digital.

"We want to help news publishers succeed as they transition to digital. In recent years we've built numerous specialized products and technologies, developed specifically to help distribute, fund, and support newspapers. This is a priority and we remain deeply committed to helping publishers with both their challenges, and their opportunities," a Google spokesperson told CNBC via email.

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