June, 10 2022, 03:45pm EDT
Statements on Deals Between Facebook and Dominant News Publishers
Open Markets Institute Calls on the New York Times, Washington Post, and Wall Street Journal to Fully Disclose Its Deals with Facebook and Google—and Work with Congress to Ensure the Journalism Competition and Preservation Act Establishes a Foundation for a Truly Fair Marketplace
The Center for Journalism & Liberty Criticizes Facebooks’ Payments to Dominant Publishers While Smaller News Organizations “Battle for Their Existence”
WASHINGTON
In response to reporting in the Wall Street Journal that Facebook is rethinking whether it will continue to pay upfront for U.S. news content via shady deals it cut with America's dominant newspapers three years ago, Open Markets Executive Director Barry Lynn and Jody Brannon, director of the Center for Journalism & Liberty, released the following statements:
Open Markets Executive Director Barry Lynn:
"For years, Facebook has sucked advertising dollars away from newspapers and news magazines. At the very moment the U.S. government began to seek solutions to this problem, Facebook cut murky, multi-million dollars deals with America's most influential newspapers, apparently as part of an effort to halt regulation and continue to siphon off advertising dollars unhindered," Lynn said. "It's not entirely surprising then to learn Facebook wants to nix these payments, which clearly haven't delivered the protection from regulation that Facebook expected."
"It is surprising that the public is only now learning the details of Facebook's payoffs to America's biggest newspapers, three years after the fact. Facebook should absolutely pay for the news it shares on its platform. But the American people also need complete transparency about any and all agreements between the publishers who report the news and the tech giants we expect them to cover honestly and critically. Open Markets Institute calls on news publishers to immediately disclose the amounts and terms of all their deals with big tech, including any renewed deals with Facebook and existing deals with Google. We can't allow our free press to be captured by tech monopolies. They already hold far too much power and pose dire threats to our democracy."
"Open Markets also calls on the New York Times, Washington Post, and Wall Street Journal to work constructively with Congress to ensure that the Journalism Competition and Preservation Act establishes a foundation for a truly fair marketplace designed to ensure robust advertising support for every newspaper in the United States, not only the few dominant players."
The Journal's article, quoting "people familiar with the matter," said Facebook annually paid the New York Times more than $20 million, the Washington Post at least $15 million and the Wall Street Journal in excess of $10 million. Those three publications top the global list for most digital subscribers.
Jody Brannon, director of the Center for Journalism & Liberty:
Jody Brannon, director of the Center for Journalism & Liberty, a program of the Open Markets Institute, pointed to the economic injustice of such significant payments to three of the nation's dominant newspapers, where the nation's smaller news organizations battle for their existence. "This is a classic example of the rich get richer," Brannon said. "Facebook collects most digital ad dollars from the reporting done by local journalists, so why can't smaller newsrooms reap even fractions of those millions to better cover their communities?"
Facebook and Google, together in 2022, are expected to account for more than half of all U.S. digital ad revenue. According to recent rankings, the New York Times, charging $300 for an annual digital subscription, is first globally in digital subscriptions with 8.4 million; in comparison, Gannett, the nation's largest chain with more than 100 newspapers in 34 states, has 1.8 million total digital subscribers each paying $29 a year.
Open Markets Institute led early warnings about tech platform monopolies threatening the news business. And in April 2021, on behalf of the Center for Journalism & Liberty, journalist Dan Froomkin detailed Facebook's "nebulous multimillion-dollar deals with major news providers to further its efforts to become the world's editor-in-chief." The article, "Is Facebook Buying Off The New York Times?" was published by The Washington Monthly. Froomkin wrote about the problematic lack of transparency around Facebook's deals with the news at the time:
"Facebook selected these [news] companies according to its own private criteria. The payments have continued even though Facebook now has been charged by attorneys general from 15 U.S. states and territories for illegally conspiring with Google to monopolize control over advertising in ways that directly threaten to asphyxiate America's free press."
The Open Markets Institute works to address threats to our democracy, individual liberties, and our national security from today's unprecedented levels of corporate concentration and monopoly power. By combining policy, legal, and market structure expertise with sophisticated communications and outreach efforts, Open Markets seeks not only to hold today's monopolies accountable for abuse of power, but to rebuild an economic system where progress is easier to achieve, because power is far more widely and equitably distributed
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