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department of justice
Google-California Deal Should Be a Wake-Up Call: Digital Monopolies Hurt Journalism
Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms.
Sep 05, 2024
A California-Google deal that would provide $250 million for local journalism and an “AI accelerator” program was announced by California Gov. Gavin Newsom as a “major breakthrough” to ensure the “survival” of newsrooms across the state. In exchange, the state has agreed to kill the California Journalism Protection Act, a bill that would have forced the tech giant to share revenues with news publishers and which was deemed to be more transparent than similar legislation in Australia and Canada.
News publishers and other advocates focusing on the good side of the deal (more money) have also been cautious about celebrating it. Journalists’ unions and associations have been more straightforward in decrying it. Altogether, newsrooms are feeling the toll of elongating their “survival” mode, especially if the trade-off is to continue handing their future to those who helped create their crisis.
By eliminating legislation enforcing revenue-share agreements, California has reduced Google’s financial liability compared with Australia and Canada, where news outlets, including broadcasters, are compensated for creating value for Google. In addition, Google got the state of California to pick up an important portion of the $250 million bill using public funding. More significantly, the deal allowed the corporation to avert disclosing how much value news generates for Google’s search engine, which estimates put at $21 billion a year in the U.S. based on searches using news media content.
Concentrated market power is hurting the chances for a free and financially independent press to thrive.
Let’s be clear: Google is the sole winner of this deal, and this should be an example of what not to do to redress power and financial imbalances between news media and large digital platforms. If anything, it should be a wake-up call to the harmful effects of digital monopolies on the news media industry. Governments can no longer spare Google and other tech giants from their role in the financial crisis of journalism.
The recent ruling from a federal district court confirming Google’s monopoly over search tells part of this story. Although that case didn’t address the corporation’s impact on newsrooms, we learned that Google’s grip on advertising demand couldn’t have been achieved without a key illegal practice: its multibillion-dollar contracts with phone makers that were designed to squash rival search engines. Today, search advertising continues to be the largest channel capturing ad spend in the U.S.
Most importantly, this stranglehold enabled Google to constrain media’s bargaining power and prevent any meaningful discussion about the dollar value news content provided to its search engine—as the looming threat of permanently turning off news access would have hurt the press even more. Without significant challengers to Google’s search engine, newsrooms are beholden to Google’s whims for news discoverability and distribution on search results.
A separate trial starting next week tackling Google’s monopoly over advertising technologies (ad-tech) is likely to complete the story of this corporation’s role in this crisis. The ad-tech industry, once thought to help news publishers make revenue from digital, has become extraordinarily complex, opaque, and concentrated. At the same time, it is the backbone that connects advertisers and publishers to buy and sell ads across the web—providing an alternative to search and social media ads, all of which drives a marketplace worth around $300 billion in the United States alone.
Besides controlling search ad revenues, Google also controls the ad-tech platforms upon which most ad sales by news publishers are made. Without getting too technical, in practice this means Google has eyes on the value of news publishers’ ad inventory, on advertisers’ preferences and perceptions about those publishers, and on the algorithms that connect the two to determine ad prices.
Also unchallenged, Google controls between 50% and 90% of transactions in each layer of this market, where it takes a cut of about 35% of each ad dollar spent. In the trial, the Department of Justice is expected to cut through the ad-tech complexity and show how Google has also manipulated ad prices to divert ad dollars away from news publishers into the tech giant’s own pockets. For the first time in many years, in this case the DOJ is seeking a breakup to redress Google’s harms.
As a counterargument, Google has been trying to push a story in which a “very competitive” market already exists, since multiple giants in various other sectors—Amazon, Walmart, CVS, etc.—are also competing for ad dollars. This view invites us to presume news publishers and journalists must be doing something wrong, so what else is there to do but to help them to “survive” in this brave, new world?
But nothing could be further from the truth. Newsrooms across the world have not stopped innovating, changing their revenue models, and adapting to audiences’ new habits. Journalists continue to defend their trade and the rights that ensure they can do their jobs safely. People still want to find reliable news. But when it comes to competition, how do we even call it that when a handful of players control not only where news is discovered and accessed, but also drive appetite to monetize audiences’ personal data, and ultimately assign value to a publisher’s ad inventory?
The fight for legislation in California that would redress these imbalances was the first step—not the ultimate fix—to coming out of the “survival” mentality that has been entrenched for far too long in journalism. Concentrated market power is hurting the chances for a free and financially independent press to thrive. As long as short-term fixes like the California-Google deal, obscure this reality, we will continue to allow the very same people we should be holding accountable to shape the future of democracy.
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Over 1,000 Disaster Survivors Demand DOJ Probe Into Big Oil Climate Crimes
"Survivors of climate crimes deserve justice no less than the victims of homicide, arson, assault and battery, armed robbery, and other felonies."
Aug 15, 2024
Over 1,000 survivors of extreme weather events on Thursday demanded a federal investigation into Big Oil's role in perpetuating the climate crisis, adding to pressure on the Biden administration to hold fossil fuel companies accountable for spreading disinformation and obstructing a clean energy transition.
With the support of nonprofits Chesapeake Climate Action Network and Public Citizen, the survivors signed a letter addressed to U.S. Attorney General Merrick Garland and delivered to the Department of Justice (DOJ).
"Some of us have lost our homes and property, our businesses, and our entire communities to climate-driven disasters," they wrote.
"While our stories and experiences are diverse, the fossil fuel industry's misconduct is a consistent throughline," they added.
"Instead of acting responsibly on their own scientists' warnings, [fossil fuel companies] waged a decadeslong disinformation campaign to muddy the science and confuse and mislead the public," they said.
Today 1,000 survivors of climate disasters are calling on the DOJ to investigate the fossil fuel industry.
They know Big Oil fans the flames of climate change every day with their greed, lies, and refusal to change.
Climate disasters aren’t natural disasters. They're crimes. pic.twitter.com/XXeucUPZgd
— Public Citizen (@Public_Citizen) August 15, 2024
Jenny Sebold, a single mother of three in Montpelier, Vermont who signed the letter, said in a statement that she has had to rebuild her life following the Great Vermont Flood of 2023. She's faced dire financial difficulty as a result, and had to go hungry last month so that she could afford to send her son to hockey camp, she said.
"Meanwhile the rich oil execs get to keep making piles of money," Sebold said. "It's wrong. They've got to be held accountable and help rebuild the communities that have been impacted."
Clara Vondrich, senior policy counsel at Public Citizen, said that "survivors of climate crimes deserve justice no less than the victims of homicide, arson, assault and battery, armed robbery, and other felonies."
She said:
Climate catastrophes are not natural disasters—they are crimes perpetrated by the fossil fuel industry. The human toll has been unimaginable, destroying entire communities, wrecking businesses that families built from the ground up, and stealing lives. Climate survivors and their allies have had enough, and our message to the Justice Department is clear: Investigate the fossil fuel industry and make polluters pay.
The letter, which was also signed by more than 9,000 others who've had loved ones face climate disasters, is part of a growing push for accountability for Big Oil. Fossil fuel companies knew about the climate impact of their products since at least the 1950s or 1960s but publicly denied the science for decades, and then evolved their strategy to propagate disinformation and use doublespeak to avoid the phaseout of fossil fuel use, which drives climate change.
In May, Sen. Sheldon Whitehouse (D-R.I.) and Rep. Jamie Raskin (D-Md.) formally called on the DOJ to investigate Big Oil, following a three-year joint congressional investigation that had culminated in a damning 65-page report released in late April.
Dozens of municipalities and states have already filed lawsuits against Big Oil for its role in the climate crisis. The most prominent case is City and County of Honolulu v. Sunoco et al, which could be the first to go to trial and has been the subject of unprecedented legal and political wrangling as the fossil fuel industry seeks to have the case thrown out.
An investigation or lawsuit by the DOJ would, however, be a major turning point, according to Richard Wiles, president of the Center for Climate Integrity, which supports the lawsuits.
"The DOJ is a completely different animal," Wiles toldThe Guardian earlier this month. "Its power is far greater than any attorney general's office in a state. They have the FBI, they have a lot more investigative resources, and they've got a lot more authority than a state attorney general is ever going to have."
Wiles expressed optimism that Vice President Kamala Harris, the Democratic presidential nominee, will push for the DOJ to use that authority if she wins the election. He told the newspaper that he sensed that Garland, who was appointed by President Joe Biden, had "no interest" in pursuing a case against Big Oil.
The existing lawsuits are civil cases, but experts have also advocated for criminal charges against Big Oil for climate-related deaths. A poll released in May showed that roughly half of Americans support such criminal prosecution. The world's first such criminal case was initiated in France in May but it's not clear whether the prosecutor there will in fact pursue it.
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The Battle to Stop the Monopolization of Live TV Has Begun
Fubo’s case against the launch of a new Disney, Warner Bros. Discovery, and Fox sports streaming service may determine whether the live television market of the future includes a robust number of distributors, or is controlled entirely by programming giants.
Aug 07, 2024
Since the launch of cable television, bundling has defined the consumer’s experience. Expensive program packages have always offered a mix of broadly desired and niche programming. The opportunity to buy a slender package of channels tailored to our individual interests has always been out of reach. It was impossible to get what you wanted, without getting what you did not. These bundling requirements have long been dictated by the programming giants like Disney, Warner Bros., and Fox, who control several of the key channels that distributors like cable companies need to offer in order to remain viable.
From the late 2000s to the early 2010s, several on-demand internet streaming services like Netflix, Disney+, and HBO Max, many of which are owned by those same programming giants, came about to offer cheaper access to narrower sets of content, though they rarely offered meaningful options for viewing the live programmatic content available on cable. Then, as more and more consumers sought to have their media delivered over the internet, the advent of live programmatic internet streaming services like Fubo and Sling TV helped recreate the experience of traditional cable. While those services initially innovated, offering slender and specialized live viewing experiences, in recent years they have suffered the same bundling issues that defined the cable industry.
The key to understanding the evolution of television markets is sports. Sports is by far the most popular form of live broadcast entertainment. And because well over 90% of televised sporting events are consumed live in real time, and because consumers have demonstrated a much higher willingness to pay premium rates for live sports content over live television programming, sports are broadly understood as the linchpin of linear television markets. And while no love has been lost between traditional cable providers and live programmatic streaming services, their shared ability to leverage sports contents’ unique appeal has allowed both industries to remain viable for now. (Though cable providers continue to lose market share to live programmatic streaming services with each passing year.) This is despite the longstanding costly licensing deals and onerous channel bundling requirements imposed on them by the large programming giants, namely Disney, Warner Bros. Discovery, and Fox.
Local television stations, which largely rely on carriage fees from redistribution through cable providers, stand to face massive hits to their bottom lines—a loss that could have profound consequences for the broadcast journalism that often serves as the only source of news in information deserts around the country.
This status quo, however, is unstable, largely due to the ongoing pressure on programmers to unbundle popular sports. In that light, the announcement of a new partnership between Disney, Warner Bros. Discovery, and Fox on a sports-centric live programmatic streaming service, Venu Sports, may sound like a revelation to the average consumer. But as demonstrated by a case seeking to block the new partnership brought by Fubo—another live programmatic streaming service—the launch of this service may determine whether the live television market of the future includes a robust number of distributors, or is controlled entirely by programming giants Disney, Warner Bros. Discovery, and Fox.
While sports fans may be eager to finally be able to access the narrow product they have long desired, a monopoly over live sports offerings threatens to harm consumers broadly by driving out any potential distribution competitors to the programming giants. These giants, which also control large swaths of other pieces of the media industry (including Disney’s direct ownership of live programmatic service Hulu + Live TV), control the distribution rights of over 80% of national live sports broadcasts, and over 50% of the cumulative national and regional sporting events rights. With that market power, these giants could destroy what remains of the cable television market and stifle competition in the market for live programmatic streaming services before it fully gets off the ground.
Fubo argues as much in their complaint. Fubo, which launched in 2015 as FuboTV, has a particularly strong case to make against why the coercive practices imposed by the programming giants should be cause for grave alarm among antitrust authorities. In their case, they recount their decade-long effort to negotiate such a sports-centric streaming service with the programming giants. While initially successful, the company claims that it quickly faced resistance once its model gained steam.
In a section of the complaint titled “The Empire Strikes Back” (a jab at lead defendant Disney’s vast media empire, which includes the Star Wars franchise) the company claims its rapid early growth was quickly squashed by the programming monopolists, which Fubo claims used more burdensome bundling requirements as well as a series of kickbacks and most-favored-nation clauses with non sports-centric live programming streamers (including Disney’s Hulu + Live TV) to make Fubo’s preferred packages economically inviable. With these onerous requirements still in place and the launch of Venu Sports imminent, the company claims it may soon be forced out of business altogether. That existential concern led Fubo to seek a preliminary injunction stopping the launch of the partnership, which is being heard from August 6 through August 9, with a decision expected within a few weeks’ time.
While Fubo’s story is uniquely galling, it is far from alone in its worries about the ripple effect the launch of the joint venture could have on sports leagues and the entire live television ecosystem. Local television stations, which largely rely on carriage fees from redistribution through cable providers, stand to face massive hits to their bottom lines—a loss that could have profound consequences for the broadcast journalism that often serves as the only source of news in information deserts around the country.
The very sports leagues whose content stands to be distributed by the new joint venture have also expressed alarm at the prospect the three giants may begin bidding for licenses as a unit, which would drastically reduce the number of license buyers in the market and potentially kneecap licensing revenue growth. And satellite television providers Dish Network and DirecTV, which have long sought greater flexibility over their channel offerings, have filed affidavits in the case supporting Fubo’s claims. ACA Connects—a trade group representing hundreds of small and mid-sized broadband, video, and phone providers who often but heads with the satellite giants—also released a scathing statement about the deal.
The Department of Justice and federal lawmakers have heeded those cries, and have promised to scrutinize the terms of any final deals once they are released—though they have expressed frustration over the programming giants’ ongoing refusal to answer basic conflict of interest questions mere months before Venu Sports is expected to launch.
Despite this broad coalition of opponents and skeptics, Fubo’s case for a preliminary injunction remains marred by uncertainty. Even though they present many of the same practical anti-competitive challenges, federal courts have historically been reluctant to police joint ventures with the same force as full-blown mergers. Should the programming giants successfully squash a preliminary injunction, it is uncertain whether federal enforcers and the potential jurors Fubo has asked to decide the case can muster the will to put the cat in the bag, especially if Venu Sports’ competitors suffer the swift devastation they claim is likely. What is certain, though, is that as the hearing over the new service’s launch unfolds this week, the entire live entertainment industry is tuning in.
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