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Minority Report: Big Tech Threatens Local News

U.S. Capitol
(Image credit: Capitol)

A new report from Senate Commerce Committee Democrats finds that online news has "decimated" broadcast TV news revenues in the age of digital, in part due to "unfair and abusive practices by tech platforms."

The report, entitled "Local Journalism: America’s Most Trusted News Sources Threatened," concludes that Congress needs to give the Federal Trade Commission more authority to protect local news from that assault.

“Local news across America creates competition and trusted information,” said Sen. Maria Cantwell (D-Wash.), the committee's ranking member. “We shouldn't let regional and community news die as local newspapers and broadcasters adjust to digital delivery because online giants are unfairly leveraging the advertising market against them.”

Related: House Majority Favors Ad Dollars for Local Media

The report concludes that the biggest of Big Tech "unfairly use content, take local news consumer data and divert customers away from local news websites, while providing little in return."

COVID-19 has accelerated the decline in local news revenues, the report points out, putting new urgency on the need for action. 

"Local broadcasters lost more than 40% of their advertising revenue between 2000 and 2018, and they face an additional 40% loss this year alone due to the impacts of COVID-19," said the committee report.

The report suggests that the problem with Big Tech is two-fold. It has fundamentally altered the way news is disseminated, and, as a result, "local news has been hijacked by a few large news aggregation platforms, most notably Google and Facebook, which have become the dominant players in online advertising. These trillion-dollar companies scrape local news content and data for their own sites and leverage their market dominance to force local news to accept little to no compensation for their intellectual property."

News outlets have been fighting to get a piece of that revenue, including by seeking help from Congress so they can jointly negotiate with Big Tech for the rights to redistribute their news content.

Second, the marketplace for online ads is deaminated by programmatic ads, with Google and Facebook together controlling 77% of locally-focused digital advertising revenue."

The solution, or at least a necessary response, says the report, is that "congressional action is needed to help local news survive the global pandemic and onslaught of unfair practices by the dominant online platforms. Local news needs new laws and regulations to make sure it can compete fairly and provide its true value to local communities and American democracy."

“NAB thanks Sen. Cantwell for her report on the importance of local journalism to our nation’s communities and in preserving democracy," said Gordon Smith, CEO of the National Association of Broadcasters. "We strongly support her findings that the competitive power of a handful of digital platforms has dominated the marketplace for advertising and audiences. Local media outlets that are a critical source for trusted, locally-based news and information have been put at an unfair disadvantage, especially at a time when they face severe economic challenges. Local radio and TV broadcasters look forward to engaging with Sen. Cantwell and her colleagues in the House and Senate on bipartisan solutions that support the future of local journalism.”