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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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Ratepayers Launch a National Escalation for Utility Justice
From the Sun Belt to New England, over two dozen coordinated actions were held in 17 states to fight back against monopoly utility companies’ rate hikes and greenwashing.
Aug 20, 2024
Across the country, families rely on utility companies to provide the power we need to heat and cool our homes, cook, bathe, and charge the devices we rely on. But instead of focusing on delivering clean, affordable, reliable power to ratepayers, for-profit utility companies are hiking rates on working families while doubling down on fossil fuels. As temperatures rise and utility bills soar, working families have had enough.
This month, ratepayers launched a nationwide escalation for utility justice. From the Sun Belt to New England, over two dozen coordinated actions were held in 17 states to fight back against utility rate hikes and greenwashing. This is a powerful beginning to a locally led, national movement to demand clean, renewable energy from for-profit utility companies, and stop rate hikes for dirty power.
In New Hampshire, climate activists are opposing a 16% rate hike that has been proposed by Eversource, which serves over 70% of the state. The increase is currently under review by the public utilities commission (PUC). The governor-appointed public utilities commission approved the rate hike, as they have with every cost increase that the utility companies have proposed in the last three years. After grassroots organizers stopped Liberty Utilities, another New Hampshire utility company, from building the Granite Bridge fracked gas pipeline in 2020, Liberty attempted to recoup more than $7 million they spent toward the proposal by raising electricity rates. The public utilities commission denied Liberty’s outrageous request, but this is not the first time a utility company has tried to put their expensive failed fossil fuel projects in ratepayers’ utility bills.
There is a long precedent of publicly-owned, democratically-controlled utility companies in the United States and around the world, and no reason why we should assume dirty, corporate-controlled utility companies relying on energy sources of the 1900s have to be our future.
The fights happening in New Hampshire with utility companies are familiar across the country. From Buffalo, New York to the Bay Area of California, ratepayers are protesting and organizing to hold for-profit utility corporations accountable for squeezing ratepayers to pad their pockets while burning the planet.
In Nevada, working families, ratepayers, and climate activists are fighting to stop NV Energy from nearly tripling its monthly fixed service charge on electric bills from $16.50 to $44.40 while lowering the volumetric charge. This regressive policy means ratepayers who use less energy will be charged more, while heavy energy users, like wealthy corporations, will be charged less—it’s wrong. Nevada is one of the fastest-heating states in the nation, and relies on electricity to keep communities comfortable. With NV Energy’s monopoly power and rising temperatures, Nevadans feel like the odds are stacked against them.
Like many for-profit utility companies, NV Energy is raising rates and burning the planet, instead of capitalizing on the plentiful solar capacity of the Sun Belt state it serves. Nevadans are pushing the Public Utilities Commission to stand up for clean, affordable, reliable energy. With an unprecedented $369 billion in federal investments unlocked in the two-year-old Inflation Reduction Act (IRA) to support the transition to clean energy, utility corporations have no excuse, besides greed, to keep charging ratepayers for dirty, expensive, unreliable power.
While companies have raised electricity prices nearly 31% since 2021, and over of a quarter of Americans struggle to pay their utility bills, activists are fighting to stop rate hikes, stop expansions of dirty power, and pressure lawmakers to stop taking political contributions from the utility corporations they are responsible for regulating.
Local communities are right to hold utility corporations accountable for raising costs on families and stalling action on clean energy. But the underlying structure of monopoly utility companies is not sustainable. When given a once-in-a-generation opportunity to transition to a sustainable energy future through the IRA, they opt to expand gas lines and invest in dirty power. Utility Corporations are failing to reimagine how growing electricity needs could be met with wind, solar, geothermal, energy efficiency, and energy conservation efforts.They have no incentive to lower costs for families, and every incentive to use their massive lobbying power to influence policy and raise rates.
Despite the money we pay each month, for-profit utility companies are not accountable to us, and their monopoly power leaves us with no alternatives. The system is rigged, but it does not have to be this way.
Together, we can change the rules. There is a long precedent of publicly-owned, democratically-controlled utility companies in the United States and around the world, and no reason why we should assume dirty, corporate-controlled utility companies relying on energy sources of the 1900s have to be our future. Now is the time to demand utility justice, to ensure clean, affordable, and reliable energy for all in a way that puts people and the planet first.
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US Court Rules Google a Monopoly in 'Biggest Antitrust Case of the 21st Century'
"Google is a monopolist, and it has acted as one to maintain its monopoly," said a federal judge in the decision.
Aug 05, 2024
A federal judge left no room for ambiguity Monday in a landmark ruling in a case brought by the Justice Department and states against tech giant Google, in which the government argued the company had illegally monopolized the search engine and advertising market.
"Google is a monopolist, and it has acted as one to maintain its monopoly," said Judge Amit Mehta, who sits of the U.S. District Court for the District of Columbia.
In U.S. et al. v. Google, Mehta found that Google has "violated Section 2 of the Sherman Act by maintaining its monopoly in two product markets in the United States—general services and general text advertising—through its exclusive distribution agreements."
The American Economic Liberties Project (AELP) called the ruling a "tremendous win for consumers, innovation, and the entire tech industry."
During a 10-week trial last year, the DOJ argued Google had used exclusionary contracts to block its competitors from reaching potential users. The company's deals with web firms such as Mozilla and cell phone companies like Apple and Samsung have made Google the default search engine on millions of people's phones and computers, as has its contracts with other major tech firms and service providers.
The trial revealed that Google shares 36% of its search ad revenues from Safari with Apple and paid the company $20 billion in 2022 to ensure Google's search engine would have default status for Apple customers.
While paying billions of dollars per year to maintain its default status, Google has been using its dominance over ad space to collect more data about users and improve its search engine, while its rivals have been cut off from that ad space.
"If that's what it takes for somebody to dislodge Google as the default search engine, wouldn't the folks that wrote the Sherman Act be concerned about it?" asked Mehta.
The Justice Department proved to the court that Google had ensured its search engine would conduct nearly 90% of all web searches.
Vanderbilt University law professor Rebecca Haw Allensworth toldThe New York Times the ruling represents "a very prominent test of the Biden administration's new antitrust enforcement agenda."
The DOJ and the Federal Trade Commission (FTC) have also sued Apple, Meta, and Amazon for monopolizing the smartphone, social media, and online selling markets.
William Kovacic, former chairman of the FTC, told the Times in June that a victory against Google would create "momentum that supports [the government's] other cases."
U.S. Rep. Pramila Jayapal (D-Wash.) was among those who applauded the ruling, saying the unfair practices Mehta outlined "are the exact behaviors that hurt consumers, competition, and small businesses."
Lee Hepner, senior legal counsel at AELP, said the ruling "strikes at the core of how hundreds of millions of Americans experience the internet."
"It illustrates how Google has become one of the most powerful companies in the world while undermining innovation and degrading the quality of its core product," said Hepner. "The remedy must match the court's striking verdict in this case. At a minimum that means an end to Google's exclusive default agreements and breaking up business lines that have allowed Google to extend its monopoly into every corner of the internet."
Google is expected to appeal Mehta's decision, but as it faces another antitrust case brought by the DOJ over its advertising technology business—set to go to trial September 9—AELP interim executive director Nidhi Hegde expressed hope that Monday's ruling "sends a resounding signal that the antimonopoly movement is here to stay."
"The promise of antitrust enforcement is that it will fully restore competition where it has been lost," said Hepner, "and we'll be advocating that the court use all of its power to do so."
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