WASHINGTON (US) – The US Federal Trade Commission is in need of new powers to protect the US local news industry, which was struggling because of unfair competition from large technology companies, a senior US lawmaker said.
Maria Cantwell, the top Democrat on the Senate Commerce Committee, said in a report released Tuesday that “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.”
The report also talked about the “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 nothing for their intellectual property.”
The report said Google screens the web to get headlines and story snippets, while Facebook features content put out by publishers or users and “receives billions in profits from the news content created by others.”
The chief executives of Facebook, Twitter and Alphabet-owned Google will testify Wednesday at a Senate Commerce Committee hearing, where their impact on local journalism will be discussed.
The report said US newspapers would most likely lay off at least 7,000 employees in 2020, with only about 30,000 newsroom jobs.
Cantwell told that “beyond just making sure that they (local news outlets) live to fight another day” Congress must address “unfair competition” facing local news outlets that “hold governments accountable” and provide other services.
“We don’t want to lose that in the digital transformation,” she said.
Earlier this month, Google said it planned to pay $1 billion to publishers globally for their news for the next three years.
The report said by the end of 2020, total US newspaper revenue is likely to drop by about 70% since 2005, while newsroom employment has fallen by 59%.
Legislation that would provide news publishers a four-year safe timeframe to negotiate with Facebook, Google and other platforms gathering the surplus online advertising revenue is due, the report said.
Cantwell’s report said Google and Facebook “control 77% of locally-focused digital advertising revenue.”