WASHINGTON - A movement is growing to try to save the news business by reining in the power of tech giants Google and Facebook, which together control 60% of digital advertising. Watchdog groups accuse the companies of profiting off the work of journalists while undercutting the ad revenue that pays their salaries.
The Senate Judiciary Committee recently held a hearing on the subject of big data and privacy. Laura Bassett, a freelance journalist formerly with the Huffington Post, testified at that hearing. She said Google and Facebook should be broken up - or at least, heavily regulated. "They're basically a country, they're that powerful. Not only do they have the power to tip elections and control what kind of news they're putting at the top of their feeds, but they're also killing journalists, financially," Bassett said. "So, it's just creating a real problem when one or two companies has the power to cripple the free press as we know it."
More than 2,500 reporters have been laid off so far this year. A study from the University of North Carolina Chapel Hill last year found about 1,800 local newspapers have gone out of business since 2004 - 20% of the total industry. The decline began many years ago when sites like Craigslist reduced newspaper revenues by about 40% by rendering classified ads obsolete. Freelance reporter John Stanton, formerly of Buzzfeed, also submitted testimony at the hearing. He said he sees the widespread layoffs of reporters as a threat to communities and democracy - leaving "news deserts" with little-to-no reporting on government corruption and a host of local issues, positive and negative. He urged Facebook and Google to be better corporate citizens and devise a way to ensure content providers get paid. "While they're not governmental entities, they do have a responsibility - given that they now kind-of control the way that people consume news - to not put profits above the ability to have a vibrant, thriving news culture," Stanton said.
Brian O'Kelley, a tech entrepreneur who invented the system that underpins digital advertising, also testified at the hearing. He said big news sites should band together and stop allowing digital firms to handle their ad sales - thus forcing advertisers off Facebook and Google, and back to the news sites themselves. "They can just click the box and turn it off and stop working with all these programmatic advertising companies," O'Kelley said. "And because it is funding some of their business right now, turning it off and switching to something else feels scary - even if it is the right decision in the medium term."
O'Kelley said part of the solution may be a federal law patterned after one in California, giving consumers the power to limit the ways websites collect their personal data and browser history.