How Big Tech’s Concentration is Hurting the News Industry

The Tech-News Problem

As Big Tech arose, the news declined. It’s not controversial to assume that these two facts are related, but there is no consensus on how the decline of the news industry is related to concentration in the tech sector, let alone how policymakers intervene in the relationship between news and tech.

Broadly, critics of tech’s relationship to news fall into two camps. First, there are those who argue that tech is misappropriating the news, say, by indexing news stories inside of search engines, or by providing online forums where the public links to, quotes and discusses the news. This formulation suggests a simple answer: just create a new copyright in links to news stories and in the reproduction of headlines and quotations, and charge tech platforms license fees for access to the news. This neatly encapsulates H.L. Mencken’s idea that “for every complex problem there is an answer that is clear, simple, and wrong.”

Money, not content

Specifically, this approach assumes that the “tech-news problem” is that tech is stealing news publishers’ content. But in truth, tech is stealing news publishers’ money. Tech firms are highly concentrated, and have erected chokepoints between news publishers and their audiences. These chokepoints are the loci of highly extractive practices that are deceptive and unfair, and cannot be remedied by creating paracopyrights over headlines, quotes and links.

Indeed, creating a new right to decide who can talk about the news and where will worsen the extraction problems, while weakening the urgent role of the news in holding tech to account.

Shattering Ad-tech

Take the ad market. Online advertising is dominated by a duopoly of massive, vertically integrated American firms: Meta (formerly Facebook) and Google. Both firms run real-time auctions to decide which ad gets run during which session, at which price, and how much of that price will be delivered to publishers. Google and Meta play multiple, conflicting roles in these auctions.

They also operate the marketplace in which these supply-side and demand-side platforms meet to conduct business. On top of all that, both Google and Meta are advertisers, and both are publishers, competing directly with the advertisers and publishers who are also their customers. These realtime bidding advertising marketplaces represent a vastly higher volume and value of transactions than any other market in the world, and yet they are subject to fewer checks against conflicts of interest than other high-stakes markets.

Policymakers have lost patience with exotic explanations of Google/Meta’s incredible margins. In the US, the AMERICA Act — whose bipartisan sponsors are an unlikely coalition that includes both Senator Elizabeth Warren and Senator Ted Cruz — would force Google and Meta to divest their conflicting units. Each company would have to decide whether to be a marketplace, a sellers’ agent, or a buyers’ agent, and shed the other business units. Meanwhile the EU has announced its own intention to seek Google’s breakup on similar lines, for similar reasons.

Surveillance is bad for news, too

Shattering ad-tech would slash the bite that Google and Meta take out of news publishers’ bottom line, but there’s another way to shift even more money from tech’s balance sheets to publishers’ side of the ledger — a policy that will also make it harder for tech to claw back that value in years to come. The internet is dominated by surveillance advertising, in which users are comprehensively spied upon by a toxic ecosystem of commercial actors.

Enforcing anti-surveillance laws like the GDPR, or passing national surveillance laws in countries (like the US) where tech lobbyists have long kept them at bay, would end behavioural advertising forever. Any advertising regime that requires active, continuous consent from users is dead on arrival, because users do not want to be spied on. This will be good for the news, too.

Now do apps

There’s one important difference between the 21st Century news and its 20th Century ancestor: in the 21st Century, nearly all news is free of charge. “If you’re not paying for the product, you’re the product” is one of those Menckenian answers “that is clear, simple, and wrong.”