|News Publishers Team Up to Take On Facebook, Google|
DOW JONES & COMPANY, INC. 1:39 PM ET 7/10/2017
Newspaper publishers are calling on Congress to allow them to negotiate collectively with Alphabet Inc.'s(GOOG)Google(GOOG) and Facebook Inc.(FB) as what they call the "digital duopoly" increasingly dominates digital advertising and news distribution online.
The News Media Alliance -- a trade organization representing some 2,000 organizations across the U.S. and Canada, including The Wall Street Journal's publisher Dow Jones -- says antiquated antitrust laws have had "the unintended effect of preserving and protecting Google(GOOG) and Facebook's(FB) dominant position," by limiting publishers' ability to push for changes together.
If granted a limited waiver by Congress, the group said it would push for stronger intellectual-property protections, better support for digital subscription models and a fairer share of revenue and customer data.
"Quality journalism is critical to sustaining democracy and is central to civic society," the alliance's president and chief executive, David Chavern, said in a statement. "To ensure that such journalism has a future, the news organizations that fund it must be able to collectively negotiate with the digital platforms that effectively control distribution and audience access in the digital age."
Mr. Chavern laid out the case of the News Media Alliance, which also includes many regional publishers, in an opinion piece for The Wall Street Journal.
Such a waiver is uncommon, however, and the prospects for the alliance's push are unclear.
Publishers have long been frustrated by Facebook's(FB) outsize role in news dissemination and commanding presence in the digital advertising market.
Google (GOOG) and Facebook(FB) are expected to receive more than 60% of U.S. digital ad spending this year, according to eMarketer. And their combined market share is growing. Last year, the U.S. online ad market expanded by nearly $12 billion and the two firms accounted for over 77% of that spending growth, eMarketer estimates.
In response to the publishers' efforts, Facebook(FB) and Google(GOOG) emphasized their continuing work to help news organizations broaden their reach and find sustainable business models in their transition to digital.
Facebook (FB) increasingly has sought to engage with publishers on ways they could work together, including an initiative that would allow news organizations to sell subscriptions to readers through the social media giant's mobile applications.
"We're committed to helping quality journalism thrive on Facebook(FB). We're making progress through our work with news publishers and have more work to do," said Campbell Brown, Facebook's(FB) head of news partnerships, in a statement in response to the alliance's move.
Google (GOOG) also has attempted to work with publishers to better highlight higher quality work and play down the output of content farms, which churn out high volumes of low-quality aggregated news, and sites that publish fictional stories masked as news.
"We want to help news publishers succeed as they transition to digital," Google(GOOG) said in a statement. "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."
Newspaper publishers, by seeking permission from Congress ahead of any collective push, are trying to avoid the situation book publishers faced when they attempted to collectively set digital book prices to fend off the growing power of Amazon.com Inc. In 2012, the Justice Department sued Apple Inc. and five of the country's biggest book publishers, including HarperCollins Publishers, which like The Wall Street Journal is owned by News Corp.
In its suit, the Justice Department accused the publishers of colluding with Apple to raise e-book prices when Amazon was selling digital best-sellers for only $9.99 -- a price often below cost.
--Jeffrey A. Trachtenberg contributed to this article.
Write to Lukas I. Alpert at email@example.com and Jack Marshall at Jack.Marshall@wsj.com
(END) Dow Jones Newswires