Tech on trial: House mulls antitrust help for news industry

WASHINGTON (AP) — Members of both parties on Tuesday suggested legislation may be necessary for the financially-struggling U.S. news industry as lawmakers began a bipartisan investigation into the market dominance of Silicon Valley companies.

At a hearing of the House Judiciary Committee’s antitrust panel, news media associations accused the tech companies of jeopardizing the news industry’s economic survival by putting out news content on their platforms without fairly compensating them for it.

“This is the first significant antitrust investigation undertaken by Congress in decades,” Rep. David Cicilline, D-R.I., the subcommittee’s chairman, said at the start of the hearing. The investigation is long overdue, he said, and Congress must determine whether the antitrust laws “are equipped for the competition problems of our modern economy.”

Cicilline noted the steep layoffs in the news industry in recent years, saying the dominant position of the online platforms in the advertising market has created “an economic catastrophe for news publishers, forcing them to cut back on their investments in quality journalism.” At the same time, he said, tech platforms that are gateways to news online “have operated with virtual immunity from the antitrust laws.”

As a partial solution, Cicilline proposed legislation to establish an antitrust exemption that would allow news companies to band together to negotiate revenue rates with big tech platforms. He called it “a life support measure, not the remedy for long-term health” of the news business.

The senior Republican on the full committee, Rep. Doug Collins of Georgia, said he backs Cicilline’s proposal. Addressing the broader question of antitrust, however, he said, “Big is not necessarily bad,” adding that lawmakers need to proceed cautiously.

The head of an association that represents technology and telecom companies said the government scrutiny of successful companies is appropriate. However, an antitrust exemption for the news industry wouldn’t solve the problem, said Matt Schruer, vice president of the Computer and Communications Industry Association.

Before the internet, “news publishers received an exemption to deal with previous competitors like radio and TV news (and they) have not worked,” Schruer said. “The results were fewer choices for readers and less competition among news outlets.”

Stepping ahead of the criticism, Google’s vice president of news Richard Gringas said the company has “worked for many years to be a collaborative and supportive technology and advertising partner to the news industry.”

“Every month, Google News and Google Search drive over 10 billion clicks to publishers’ websites, which drive subscriptions and significant ad revenue,” he said in a statement Tuesday.

In a Capitol steeped in partisanship, inflamed by special counsel Robert Mueller’s report and Democrats’ intensifying probes of President Donald Trump, Congress’ new investigation of tech market power stands out. Not only is it bipartisan, but it’s also the first such review by Congress of a sector that for more than a decade has enjoyed haloed status and a light touch from federal regulators.

With regulators at the Justice Department and Federal Trade Commission apparently pursuing antitrust investigations of Facebook, Google, Apple and Amazon, and several state attorneys general exploring bipartisan action of their own, the tech industry finds itself in a precarious moment — with the dreaded M-word increasingly used to describe their way of doing business. Cicilline has flatly called them monopolies.

Politicians on the left and right have differing gripes about the tech giants. Some complain of aggressive conduct that squashes competition. Others perceive a political bias or tolerance of extremist content. Still others are upset by the industry’s harvesting of personal data.