Google and Facebook control 60 percent of online ad dollars and can decide the fate of newsrooms by tweaking their algorithms. | Justin Sullivan/Getty Images technology Inside the media industry’s struggle to take on Silicon Valley U.S. news companies are using a playbook from Europe to challenge the online platforms they see as an existential threat.

Executives from some of the biggest U.S. news organizations met with a British economist last fall at Washington’s exclusive Metropolitan Club to strategize on a mutual obsession: getting their industry out from under the thumb of Google and Facebook.

Over a breakfast of bacon and eggs in a private banquet room, executives from CNN, USA Today and Wall Street Journal publisher Dow Jones listened intently as Dame Frances Cairncross described how British publishers are navigating the internet giants' domination of the news business, an attendee from the media delegation told POLITICO. During the session, the details of which have not been previously disclosed, Cairncross in turn sought the perspective of the American media for a report, commissioned by then-Prime Minister Theresa May, on the fate of journalism in the digital age.


The meeting was part of an ongoing campaign by news publishers in the U.S. and Europe to counter the growing power of Silicon Valley — a significant, if often overlooked, aspect of the anti-tech backlash brewing on both sides of the Atlantic. And it comes amid an existential struggle for most U.S. news companies, at a time when Google and Facebook control 60 percent of online ad dollars and can decide the fate of newsrooms by tweaking their algorithms.

The news companies’ efforts have taken many forms, including complaints with regulators and lawmakers in multiple countries about tech’s alleged antitrust or copyright violations. But the American publishers’ major focus at the moment is persuading Congress to grant them an exemption from antitrust law, which would let them combine forces to negotiate the terms of the online platforms’ use of their news content.

That effort, which recently got a plug from Democratic presidential candidate Bernie Sanders, echoes the tactic behind a new European Union copyright directive that gives publishers greater economic leverage against tech. That EU law is the result of years of hit-or-miss efforts to combat what the media companies call a Google-Facebook "digital duopoly."

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U.S. media advocates say they have drawn major lessons from discussions with their European counterparts, including the need to band together and put aside their traditional rivalries.

“The European publishers have been ahead of us,” said David Chavern, president and CEO of the News Media Alliance, which represents about 2,000 media organizations in the U.S. and elsewhere. “The biggest lesson learned is that you need collective action by the publishers. No one publisher, even a really big publisher, in itself can impact the relationship with the platforms. You need everybody to coordinate.”

The combatants include some of the media industry’s biggest players — among them the major German publisher Axel Springer SE as well as News Corp., the U.S. company founded by Rupert Murdoch that owns Dow Jones and The Wall Street Journal. (Axel Springer is the co-owner, along with POLITICO, of POLITICO Europe.) The involvement of such media powerhouses has inspired some eye-rolling among some Silicon Valley defenders in Washington, even if the vast majority of U.S. newsrooms have spent the past decade in an economic free fall.

“If only somebody would help Rupert Murdoch,” quipped Carl Szabo, vice president and general counsel of the tech trade group NetChoice, whose members include Facebook and Google.

Chavern, a former U.S. Chamber of Commerce executive, has repeatedly traveled to Europe to learn from his EU counterparts about their combat with tech. During a January trip to Berlin, he met with VG Media, a so-called collecting society that serves as a clearinghouse for fees owed to news publishers, and sat down with Axel Springer’s chief lobbyist, Dietrich von Klaeden.

Chavern said he plans to head back to the continent in the fall.

Meanwhile, von Klaeden has been to the United States more than a half-dozen times over the past year to explain the European media strategy and make the case for changes in Washington, he told POLITICO Europe in an interview.

Von Klaeden has spread the message in the U.S. that when it comes to news publishers' dealings with Google and Facebook, it's possible to "get the dollar to change direction."

“It’s important for the U.S. to maintain the momentum,” said von Klaeden, who sits on the News Media Alliance’s board.

In February, shortly after Chavern returned from Europe, Cairncross issued the results of her investigation into the state of the British news industry. Among the conclusions of the 160-page report were that “the government must take steps to ensure the position of Google and Facebook does not do undue harm to publishers."

Magazines and newspapers of German publisher Axel Springer. | Sean Gallup/Getty Images

The publishers' efforts in the EU have already borne fruit. This spring, amid an intense lobbying campaign by the media and other industries, the European Parliament and European Council in Brussels adopted sweeping copyright legislation that includes a so-called publisher’s right provision, giving news organizations the right to demand payment for the small snippets of news that appear on Google News and elsewhere. Critics call it a “link tax.“

European media had years of misfires before getting some traction against the major internet companies. In 2014, Spain passed a law requiring payments to Spanish publications whose content populated Google News. Google reacted by shuttering the service there, and it remains closed.

But unlike in the Spanish case, publishers say that under the new EU-wide regulation, they’ll be in a position to trade payments for other concessions from the tech platforms, such as access to data collected on their digital audiences. (EU member states have two years from the date of passage to enshrine the directive into their national laws.)

In the U.S., the News Media Alliance is throwing its lobbying efforts behind a bill that would give publishers a time-limited exemption from antitrust law, allowing them to negotiate together to make content deals with online providers without being charged with illegal collusion.

The legislation represents a major change in the media companies’ strategy: Until recently, individual American publishers attempted to negotiate one-off, ad hoc deals with Google and Facebook in attempts to extract more money or more online readership data on better terms. It was, they say, an unsatisfying experience.

One thing going for American news organizations is that in the wake of the 2016 U.S. presidential election, both Democrats and Republicans began turning on Google and Facebook over everything from Russian election interference to the proliferation of online hate speech to, in the GOP's case, unproven allegations of anti-conservative bias.

That anger is beginning to manifest itself in concrete action in Washington. In late July, the Justice Department announced a broad antitrust review of the major tech platforms; a person familiar with the situation said the media companies’ grievances are on the DOJ’s radar. A day later, after being hit by a $5 billion privacy fine from the Federal Trade Commission, Facebook disclosed that it was the subject of a new FTC antitrust investigation.

At least one media mogul isn't waiting for regulators to take notice of the news industry's unhappiness. News Corp. has in recent years complained to the European Commission about Google’s scraping of its news and has argued to Australian authorities that Silicon Valley firms need to be more heavily regulated. Last summer, the company urged the FTC to look into whether any of the online platforms are behaving like a “bottleneck monopolist” by dictating what kind of relationship news outlets have with their digital audiences.

News Corp. is also a member of the News Media Alliance and sits on its board. But Chavern said his group isn’t pinning its hopes on federal antitrust regulators in the U.S., whose investigations can take years to wrap up. (An FTC antitrust case against the chip maker Qualcomm begun in January of 2017 is still ongoing.)

“I’m not asking the government to do anything other than leave us alone,” said Chavern. “I’m trying to drive an immediate solution for news publishers to build a sustainable future.”

Still, the group has taken advantage of Congress' growing interest in cracking down on tech companies to press its agenda.

Rep. David Cicilline (D-R.I.), chairman of the House Judiciary Antitrust, Commercial and Administrative Law Subcommittee, chose to devote the first hearing of his wide-ranging tech industry investigation to the fate of the “free and diverse press.” Cicilline used the June hearing to call attention to the News Media Alliance’s proposed antitrust exemption, which he is sponsoring in the House.

In the Senate, the backers of the bipartisan legislation are Louisiana Republican John Neely Kennedy and Democratic presidential candidate Amy Klobuchar of Minnesota.

While getting any legislation through Congress at the moment is an uphill task, the House bill has gotten traction on the presidential campaign trail with Sanders, who linked to the measure in a recent op-ed, saying, "We must also explore new ways to empower media organizations to collectively bargain with these tech monopolies."

And the tech industry is seeing the push for the antitrust exemption as enough of a threat to quietly lobby against it. That’s in part because the country’s publishers are a unique kind of Silicon Valley critic, with built-in high public profiles and longstanding political connections.

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“We’ve worked for many years to be a collaborative and supportive technology and advertising partner to the news industry as it works to adapt to the new economics of the internet,” a Google spokesperson said in a statement, saying the company drives tens of billions of clicks to news sites that spur ad revenue and subscriptions.

Facebook declined to comment on the record, but a person familiar with the company’s thinking said it believes that the proposed media antitrust exemption could lead to the sort of news blackouts that sometimes result from the breakdown in negotiations over cable programming.

The internet giants have lately touted a series of initiatives to work more closely with the media. In March 2018, for example, Google said it was putting $300 million into a “Google News Initiative,” which provides funding, training and digital tools to local news outlets. Facebook, meanwhile, is planning to launch a “news tab” under which the company will reportedly pay publishers for content.

To support the U.S. legislation, the News Media Alliance is connecting lawmakers with representatives of their local newspapers to make their case.

Kevin Riley, the editor of the Atlanta Journal-Constitution, said he overcame the awkwardness of getting engaged in politics to talk to Georgia Rep. Doug Collins, the top Republican on House Judiciary, about the challenges facing his paper in the digital era. (Collins is a co-sponsor of the media antitrust bill.)

“You don’t want to be in a position that you’re lobbying people you cover, but I wanted him to know how important it was,” said Riley, who also testified at Cicilline’s hearing in June.

Riley said he stopped short of asking Collins to support the exemption: “The [News Media] Alliance can take it from there.”

Critics of the bills say Congress has been rightly reluctant to create loopholes in the country’s antitrust rules. And, they say, an exemption for publishers has been tried in the past, without much success. In 1970, President Richard Nixon signed an exemption allowing local news publishers to enter into joint operating agreements, which allowed competing newspapers in the same city to combine their business operations while maintaining separate newsrooms.

Some opponents charge that the move only shored up entrenched media giants to the detriment of up-and-coming outlets.

“Generally, society as a whole abhors cartels. So why pass a statute to create one?” said Jonathan Jacobson, a former member of the congressionally mandated Antitrust Modernization Commission, which warned in 2007 against such exemptions. (Jacobson, a lawyer in private practice, has Google as a client, though he said he isn’t speaking for it.)

But advocates for the measure say that times and circumstances have changed — and that newspapers and other media outlets, though crucial to American democracy, are in the untenable position of competing for revenue with the online platforms that distribute their content.

“I think the bargaining power between any individual publisher and a tech platform is just too vast,” said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, an advocacy group critical of the tech industry.

The News Media Alliance had a high-profile misstep in its U.S. campaign. A study it released in June, which was featured in The New York Times, asserted that Google made about $4.7 billion off news publishers’ content in 2018. That number met with immediate skepticism, and the director of Harvard’s Nieman Journalism Lab called the figure “imaginary.”

But the group says it's seeing the political winds in the U.S. blowing in its favor. Chavern said board members recently told him they were encouraged to see the traction the group's campaign is getting, urging him to "punch the gas.”

Matthew Karnitschnig contributed to this report.