Klobuchar: “We need to step in to level the playing field.”
WASHINGTON – At today’s Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights hearing on journalism, competition and the effects of market power on a free press, U.S. Senator Amy Klobuchar (D-MN), Chairwoman of the Subcommittee, highlighted how dominant online platforms’ advertising practices harm local news outlets.
“These big tech companies are not friends to journalism. They are raking in ad dollars while taking news content, feeding it to their users, and refusing to offer fair compensation,” Klobuchar said in her opening statement. “What does big tech’s dominance over the news mean for Americans? Less revenue for local news, fewer journalists to do in-depth high quality reporting, more exposure to misinformation, and fewer reliable sources…That’s why we need to step in to level the playing field.”
Last March, Klobuchar, Senator John Kennedy (R-LA), Representative David Cicilline (D-RI), and Representative Ken Buck (R-NY) introduced bipartisan, bicameral legislation to level the negotiating playing field by allowing news publishers and broadcasters to band together to negotiate with digital platforms on the terms on which their news content can be accessed. The Journalism Competition and Preservation Act would enable news organizations to negotiate terms that would provide fair compensation for news content, while protecting and preserving Americans’ right to access quality news.
Last May, Klobuchar and Senators Brian Schatz (D-HI) and Michael Bennet (D-CO) introduced legislation to create a committee to study the state of local journalism and offer recommendations to Congress on the actions it can take to support local news organizations.
Last July, Klobuchar and Senators Maria Cantwell (D-WA), Mark Kelly (D-AZ), and Ron Wyden (D-OR) introduced the Local Journalism Sustainability Act to help financially support local news organizations through tax credits to incentivize hiring more journalists, subscriptions, and advertising from local small businesses.
Thank you everyone. I call to order this hearing of the Subcommittee on Competition Policy, Antitrust, and Consumer Rights entitled “Breaking the News: Journalism Competition and the Effects of Market Power on a Free Press.” I want to welcome our witnesses. We have votes going on right now, so Senator Lee and I will be going back and forth, as will some of the other Senators during this time. But I want to thank him and his staff for working with us to put together this hearing, as well as my own staff Marc and Avery and Keagan for the work they do every day.
So some of you may know, my dad was a newspaperman as a reporter and a columnist in the Twin Cities. He covered it all in an estimated 8,400 columns and about 12 million words in which he interviewed everyone from Ronald Reagan, Senator Lee, to Ginger Rogers, to Chicago Bears coach Mike Ditka. I won't say which interview was his favorite. He was proud to be a newspaperman. And as you can imagine, in my house growing up it was impossible to forget the importance of a free press and that is what we are here to talk about today, to talk about the critical work news outlets around the country are doing and explore solutions to some of the existential challenges facing journalism.
It is truly local news that reports on the issues that people face in their everyday lives. I think about the Fargo Forum in my home state of Minnesota, next to North Dakota, that includes Moorhead, Minnesota, when the floods, catastrophic floods hit the area. That newspaper and the local broadcasters were the ones covering it, warning people, giving them news updates all the time. I think about investigative journalism at the local level. With everything from City Council scandals, not that those ever exist, to all kinds of things that would not be covered. I think of the sports games for high schools and the pride that people have in their local community events. All of this brings the community together in different ways. They find stuff out. They have common information that they can look at, in addition to what they see nationally, which sometimes can seem very distant and larger than life.
What our local news does is oftentimes tell a story of what my dad called ordinary people doing extraordinary things. And as I said, this work not only connects communities, it also helps policy makers better understand how issues are impacting their constituents and helps them to figure out what needs to be done. That’s why it’s critical that we ensure that local news can not only survive, but thrive. Particularly as outlets face off with some of the biggest companies the world has ever known. Local news is facing a crisis in the U.S.
Since 2005, about 2200 local newspapers across America have closed, and many of the ones that remain are on life support. Between 2008 and 2019, newsroom employment fell by 51%. With much smaller newsrooms, surviving outlets are often mere shells of their former selves. I was thinking about that really troubling photo from the Denver Post where the journalists show a picture of everyone happily smiling and then a few years later, they show the hollowed out images, the silhouettes of the journalists who are no longer there. Less than half of them were left.
As you know, local newspapers aren’t closing or drastically reducing their coverage because of a lack of talent or passion for the work. And yes, many of them have online presences. And they have tried their best to do that. But in fact, their real problem is a lack of revenue. Ad revenue for U.S. newspapers plummeted from over $37 billion in 2008 to less than $9 billion in 2020. $37 billion in 2008 to less than $9 billion in 2020. What else happened during that time? Well if you see the ad revenues for the world’s biggest companies, you’ll see the exact opposite story being told. Facebook and Google, worth over $2.6 trillion dollars combined as I speak, became digital advertising titans during that same time. Just yesterday, Google reported $61 billion in advertising revenue in a single 3 month period – a 33% jump. I say to my colleagues, a 33% jump from the same period just last year. Look at those numbers. $61 billion in just three months for one company. $61 billion and you have U.S. newspaper revenue from 2008 to 2020 going from $37 billion to $9 billion. As one of my colleagues said during the presidential race, do the math. It’s not that hard to figure it out. Do the math.
These big tech companies are not friends to journalism. They are raking in ad dollars while taking news content, feeding it to their users, and refusing to offer fair compensation. And they’re making money on consumers’ backs by using the content produced by news outlets to suck up as much data about each reader as they can. So, it’s kind of a double whammy, right? They’re the big guys, they’re bringing in the content, they’re not compensating for it as they should. And at the same time, they are getting the revenue off the consumers that read the content that then don’t go to the ones that are producing the content. So then that data really exacerbates what is already a huge divide in where that revenue goes.
And how much do these companies care about retaining this power over the news and reader data? They care a lot. Enough to even hold entire countries, industrialized nations, hostage as we saw happen last year in Australia. When Google was told by the government that they would have to pay for the news content that they wanted to use, this is the Australian government, the company essentially said, “We’re out of here,” and threatened to pull Google search out of an entire country. That’s what monopolies do. That’s what you do when you can do it because you have over 90% of the search market. Google didn’t follow through on its threat, in part because there was so much international pressure to stop them from doing it. But Facebook actually switched off all news on its platform to protest the law, only reversing course after a few days under immense outside pressure.
And what does big tech’s dominance over the news mean for Americans? As I've already noted, less revenue for local news, fewer journalists to do in-depth high quality reporting, more exposure to misinformation, and fewer reliable sources. While the rise of these platforms has sometimes meant a larger audience for some news outlets, that hasn’t translated to increased ad revenue. For years, I’ve heard concerns about things like the platforms do not provide adequate branding for news outlets’ original content on the platforms. That they hoard for themselves all of the data on the users that access the news content produced by news providers through their platform. That they publish large snippets of newspapers’ content to attract users to the platform without any compensation at all to that news outlet. And repeated complaints to Google and Facebook from newspapers and broadcasters are simply ignored. Because that’s what a monopolist does. They can ignore things. They can use their market dominance to elbow others out and retain their control. That‘s why we need to step in to level the playing field, as so many other countries are doing.
We’re here today to talk about how we’ll give these news outlets a fighting chance. I’ve teamed up with my colleague Senator Kennedy to lead the bipartisan Journalism Competition and Preservation Act. Our bill gives local news outlets the ability to collectively negotiate for fair compensation with companies like Google and Facebook so they can continue to invest in the kind of quality reporting that keeps us all informed. And we’re working with our bipartisan partners in the House of Representatives on improvements to the bill. We’re ready to take all ideas and address all challenges raised by our colleagues because we believe there’s a way to do this fairly to make sure that all news outlets are included to better the bargaining imbalance between newspapers and big tech. We’re looking at this clear framework for good faith negotiations between news organizations and big tech, mechanisms to help those negotiations go smoothly, protections to prevent discrimination against news outlets based on the political views that they express, and provisions to better ensure that the interests of small independent news outlets are paramount in any joint negotiation.
I also introduced the Future of Local News Act to help local news outlets chart the path forward as they recover from the pandemic. And I'm working with my colleagues to pass the Local Journalism Sustainability Act to help Americans pay for newspaper subscriptions.
So all this said, if we were living in a perfect world where we didn’t have monopoly search engines and monopoly platforms with, some cases, over 90% of the market, and we were able to pass some of the bills that I have, and my colleagues have on a bipartisan basis, Senator Grassley, to even that playing field, maybe we wouldn’t be where we are. But we are here because we have a crisis going on when we’ve lost over 2,000 news outlets. And that is why we have come upon this targeted approach to protect the First Amendment, to protect the news organizations that we believe are so critical to making sure that the First Amendment stays strong.
We need to recognize that what separates the news from the vast majority of our other industries is its crucial role in our democratic system of government. That’s why our founders enshrined freedom of the press in the First Amendment. So when the exercise of monopoly power results in a market failure in our news industry, it’s critically important for our democracy that we act. Local journalism is also important to local communities and their economies. The closures of local newspapers can lead to higher municipal borrowing costs and increased government inefficiency. This means less money for schools, hospitals, and roads. Thomas Jefferson said that our first objective should be to leave open “all avenues to truth,” and that the best way of doing that is through “the freedom of the press.” That rings especially true today. As elected leaders, we certainly may not always like what we read or hear in the news. I think all of us can relate to this. But I think we can all agree that ensuring the future of a vibrant and independent free press is essential to the fabric of our democracy and the American way of life. Thank you. I now turn it over to my colleague, Senator Lee, for his opening statement.
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