House kicks off tech antitrust probe

Congress on Tuesday opened an investigation into tech companies and antitrust issues, with a hearing on how the industry has upended the business model of the news media and other publishers.

At the first hearing in the House Judiciary Committee’s bipartisan investigation into Silicon Valley’s market power, the panel’s subcommittee on antitrust heard from media advocates who accused internet giants such as Facebook and Google of having a stranglehold on digital advertising, and who urged lawmakers to level the playing field for publishers.

“Unfortunately in the news business, free riding by dominant online platforms, which aggregate and then reserve our content, has led to the lion’s share of online advertising dollars generated off the back of news going to the platforms,” said David Pitofsky, the general counsel for News Corp., which owns The Wall Street Journal.

“We’re not losing business to an innovator who has found a better or more efficient way to report and investigate the news,” Pitofsky added. “We’re losing business because the dominant platforms deploy our news content to target our audiences to then turn around and sell that audience to the same advertisers we’re trying to serve.”

The hearing came amid an unprecedented level of scrutiny in Washington over tech giants’ market power and impact on competitors and consumers. But lawmakers have generally given little attention to what many see as the threat the tech industry poses to the news industry and the damage done to local news outlets.

The bipartisan leaders of the Judiciary Committee are pushing a short-term solution backed by the newspaper industry that would grant an antitrust exemption to media outlets allowing them to collectively negotiate with companies like Facebook and Google for a larger slice of the digital advertising pie.

“It is incumbent on Congress to understand the sources of this problem and address it urgently,” said Rep. Jerrold Nadler (D-N.Y.), the chairman of the House Judiciary Committee. “Congress also has a constitutional duty to ensure markets are structured in a way that is compatible with our democratic values.”

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