Disintermediated News Companies Get Government Help

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Disintermediated News Companies Get Government Help

Disintermediation often is described as "taking out" the middle-man between buyer and seller but when if comes to news, the Big Tech companies such as Google and Facebook and perhaps even Twitter have taken the essence of news content - perhaps a title, snippet and photo and provided it for free to their users.

Of course quite often, newspapers and magazines provide their information for free as well but use advertising as a monetizing vehicle. Big tech companies have disintermediated the advertisers and the eyeballs.

The Democrats in the House of Representatives have gotten involved and introduced a bill today that would allow media outlets to band together to negotiate for better terms with giant tech platforms.

Rep. David Cicilline's (D-R.I.) Journalism Competition and Preservation Act would grant a temporary antitrust waiver for news publishers to collectively negotiate with companies like Facebook and Google.

"Our democracy is strongest when we have a free, open press that informs citizens, holds public officials accountable, and roots out corruption," Cicilline, the top Democrat on the House Judiciary antitrust subcommittee, said in a statement.

“This bill empowers local newspapers to negotiate collectively with the biggest technology platforms to ensure consumers have access to the best journalism possible."

The News Media Alliance (NMA), a trade group representing hundreds of large and small outlets, has been pushing for such legislation. Last year, the group urged Congress to grant a waiver to the industry, arguing that tech giants have been squeezing them out of coveted ad dollars.

House Dem wants to let news industry organize against tech platforms
© Greg Nash

"We are grateful to Congressman Cicilline for his commitment to ensuring fair competition with the platforms and for his work to preserve quality journalism,” David Chavern, NMA’s CEO, said in a statement Wednesday. “Our industry depends on our ability to continue to invest in stories that report the truth and hold our public officials accountable."

Earlier this year, News Corp chairman Rupert Murdoch urged the tech giants to start paying outlets carriage fees for delivering their content.

This is a nonpartisan issue. Both parties have realized the tech giants have amassed too much power and are the censors of what their constituents can see. 

The idea is to bring collective bargaining to the news producers in order to protect them from having their information "legally stolen" and used by Big Tech competitors to make money. Many argue there is no doubt that Facebook represents a monopoly in social media and Google in search. Between the two, their power to continue decimating the news business is unstoppable without some action to change the tide.

Whether such efforts - even if they pass, are enough, remains to be seen.

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