Friday, March 19, 2021

Journalism Won’t Be Saved a Link at a Time

Last spring, just as the first surge in the COVID-19 pandemic was peaking, Amy Brothers was busy at The Denver Post covering the fallout across Colorado.

“I really loved my job,” Brothers tweeted. “Going out into our community and telling your stories, on your best days and your hardest always inspired me.” 

But that came to an abrupt end one Friday in April. Without warning, Brothers’ bosses at The Post laid off the video journalist along with 12 other newsroom colleagues, all casualties of the plummeting ad spending that struck local-news operations across the country.

“The interesting thing about covering a pandemic is that it’s a national story, but also completely local,” Brothers later told me. “But with fewer resources, you have to choose between the number of articles you can report and the depth of those articles.”...

(Read the entire story at TruthOut

Thursday, March 04, 2021

Local Laws Are 'Laboratories' for Taxing Big Tech

Earlier this year, Nobel Prize-winning economist Paul Romer spoke about the benefits of taxing platforms like Facebook and Google to help suppress Big Tech’s dominance and spur competition.

Romer said that you can get there by levying a “pigovian tax” on digital ads. In general terms, a pigovian tax is one that’s levied against any market activity that generates “negative externalities” — or bad consequences across society. 

In Romer’s interpretation, such a tax could be progressive when applied to online platforms; the marginal tax rate would increase relative to a given firm’s market dominance. Companies that are becoming more dominant would be taxed at a rate that discourages further control (and the “negative externalities” that result from it). Meanwhile, smaller competitors would pay a far lower rate, fostering their ability to provide an alternative to consumers.

Romer holds up taxation legislation in Maryland as a worthy approach that might inspire other legislatures in the United States and abroad. The state is on the cusp of implementing legislation that would impose a 2.5–10-percent tax on in-state digital advertising.

“It makes perfect sense for them to try and claw back for the citizens of Maryland revenue which has been sucked out of their state and is going to San Francisco, New York, Seattle, and a few other places,” Romer said during a Stigler Center webinar.

In a 2019 Op-Ed for The New York Times, Romer writes that taxing Big Tech is a superior strategy to pursuing antitrust law or regulation. Though U.S. antitrust law may address harms caused by price gouging, he writes, it’s not an effective remedy for other platform harms — such as “undermining the institutions of democracy.”

Laboratories for democracy
There’s a facet of the Maryland tax that Romer doesn’t mention: the funneling of resulting revenues to support a specific remedy. For example, money from Maryland’s proposed tax — estimated to reach $250 million in the first year — will go to the state’s public schools.

While Romer’s version of a pigovian tax might help curb Big Tech’s runaway growth, it’s unclear how that would address many of the anti-democratic harms caused by the targeted-advertising model that forms the economic backbone of online companies big and small.

Maryland lawmakers rightly see better-funded education as a possible fix to the “negative externalities” of Big Tech’s algorithmic amplification — which fuels the spread of disinformation and hate, and incites anti-democratic violence.

Others, including Free Press, believe a tax on algorithmic ad revenues should be levied to support the robust production of news content — with an emphasis on local journalism, noncommercial outlets and other news for underserved communities.

As much as anywhere, the platforms’ negative impacts are felt in journalism: As Facebook and Google have come to dominate the new-media economy, the independent, local journalism that people need to debunk online conspiracies and participate in democracy continues to disappear from communities.

Romer says state legislatures and city councils — and not the executive or judicial branches of the federal government — are the “least bad” ways to do this; they are akin to “laboratories of democracy.”

“If we can allow local taxation we can see some innovation,” Romer adds, “and we can learn from their experience as we approach a kind of national consensus.”

What Maryland is doing should prove a good model for other states to follow and adapt. Congress should pay attention, too.

Free Press Action encourages any lawmakers who take up legislation to tax Big Tech to also consider how the resulting monies should be spent locally. If the impetus for taxes is to make dominant platforms more accountable to the public, the resulting tax money should address the crisis in journalism these companies have worsened.

Monday, February 22, 2021

Cutting Deals with Big Tech Won't Save Journalism


This week, Australia will put the finishing touches on a plan to force Google and Facebook to pay millions of dollars to local news publishers in exchange for featuring their content on their powerful platforms.

Many in the news industry are hailing Australia’s bargaining code as a way to bring Big Tech to the table and save journalism at a time when news outlets are struggling.

And to the table Big Tech has come, but its response hasn’t been helpful.

Last Wednesday, Rupert Murdoch’s News Corp. announced that it had struck a three-year deal with Google that would provide access to the company’s empire of news content in exchange for “significant payments” from the search giant. That’s a windfall for a conglomerate that’s notorious worldwide for serving its news with heaping portions of disinformation and bigotry.

Facebook responded with the nuclear option: Instead of settling on a fee it prevented any of its users from sharing links to Australian news sources. For several days it was impossible to post news from Australian sources; Facebook’s heavy-handed info blackout extended to government health sites providing critical COVID-19 vaccination information to Australians.

Australia’s bargaining code is an early foray by lawmakers seeking to reset the balance of power between tech platforms and a news industry that’s failing to keep pace with the digital economy. This accounting is important — and governments should be doing more to make these massive online networks compensate for the damage they have done to democratic society — but there are better ways forward for Australia and other countries weighing similar measures to support journalism. Murdoch and others in the newspaper industry are pushing to reintroduce legislation in the United States (what some call “Murdoch’s Law”) which would also force a payment negotiation between powerful U.S.-based news businesses and Silicon Valley.

There are several reasons the Australian experiment won’t work in the United States. If the initial reaction from Google and Facebook is any indication, it doesn’t appear to be working too well for Australia either.

Looming in the background of this debate are major shifts in the economics of news production. The U.S. ad industry has moved away from buying placements in traditional media entities that produced news (like newspapers) toward cheaper, more finely targeted options offered by digital platforms that don’t (like Facebook and Google).

Allowing the most powerful media conglomerates to negotiate payments from the most powerful tech conglomerates is an attempt to rebalance the equation. But giving handouts to News Corp. won’t help the sorts of local, civic-minded news outlets and reporters who have suffered most under this new digital economy. And funding traditional news operations doesn’t meet the needs of communities of color and working-class families, who’ve been long overlooked or misrepresented by U.S. media.

We can’t solve the platform-dominance problem and the journalism-funding problem with a solution that makes both problems worse. Turning every instance of link sharing into a government-mandated monetary transaction would forever alter the fundamental openness of the internet. We need to invest in new journalism — not entrenched corporate power and gatekeeping.

Taxing the attention economy
The best way to do that is by supporting innovations in news production that put journalists back to work, and better connect them with the people and communities they report on. At Free Press Action we’ve put forth better remedies for the United States, including a proposal for a tax on online advertising. The resulting revenue would be placed in a Public Interest Media Endowment and used to fund the kinds of diverse, local, independent and noncommercial news and information that have gone missing.

For example, a 2-percent ad tax on 2020 advertising revenues of the top-10 online platforms would yield more than $2 billion for the endowment. As Facebook’s, Google’s and Amazon’s share of the digital advertising space increases, so would its tax commitment to help save journalism.

Others have put forth ideas for the future of journalism that also deserve attention from lawmakers. We can’t let these be shunted to the side in favor of a legislative proposal that’s being pushed in Australia and the United States by the Murdochs and other media oligarchs.

Instead, we need strong public-media laws that prioritize a free press, civic-minded news production and the interests of the communities news outlets are supposed to serve.

It’s increasingly clear that market-based solutions for news production aren’t helping foster a more equitable and inclusive democracy. In the United States, commercial media share a sizable portion of the blame for the rise of Donald Trump — and, with him, Trump-style white nationalism.

What happened in the 20th century, when local print, radio and TV outlets were the best way for advertisers to target local audiences, was a historical fluke. Attempts to rebuild or insulate that old-media model in the 21st century are a fool’s errand. Future solutions must involve new hybrid private- and public-sector models, or direct public funding for journalism, so long as it includes guardrails to protect the editorial independence of news organizations on the receiving end.

Incentivizing these sorts of funding models is the right path away from a commercial-media system dominated by too few players. While Australia’s proposal is a sincere attempt to make Facebook and Google pay for the harm they’ve caused journalism, it’s not the final word. Nor should it be.