[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




                  ONLINE PLATFORMS AND MARKET POWER, 
                   PART 1: THE FREE AND DIVERSE PRESS

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                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ANTITRUST,
                   COMMERCIAL AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 11, 2019

                               __________

                           Serial No. 116-25

                               __________

         Printed for the use of the Committee on the Judiciary





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        Available http://judiciary.house.gov or www.govinfo.gov 
        
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39-839                   WASHINGTON : 2020
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
                       COMMITTEE ON THE JUDICIARY

                   JERROLD NADLER, New York, Chairman
ZOE LOFGREN, California              DOUG COLLINS, Georgia,
SHEILA JACKSON LEE, Texas              Ranking Member
STEVE COHEN, Tennessee               F. JAMES SENSENBRENNER, Jr., 
HENRY C. ``HANK'' JOHNSON, Jr.,          Wisconsin
    Georgia                          STEVE CHABOT, Ohio
THEODORE E. DEUTCH, Florida          LOUIE GOHMERT, Texas
KAREN BASS, California               JIM JORDAN, Ohio
CEDRIC L. RICHMOND, Louisiana        KEN BUCK, Colorado
HAKEEM S. JEFFRIES, New York         JOHN RATCLIFFE, Texas
DAVID N. CICILLINE, Rhode Island     MARTHA ROBY, Alabama
ERIC SWALWELL, California            MATT GAETZ, Florida
TED LIEU, California                 MIKE JOHNSON, Louisiana
JAMIE RASKIN, Maryland               ANDY BIGGS, Arizona
PRAMILA JAYAPAL, Washington          TOM McCLINTOCK, California
VAL BUTLER DEMINGS, Florida          DEBBIE LESKO, Arizona
J. LUIS CORREA, California           GUY RESCHENTHALER, Pennsylvania
MARY GAY SCANLON, Pennsylvania,      BEN CLINE, Virginia
  Vice-Chair                         KELLY ARMSTRONG, North Dakota
SYLVIA R. GARCIA, Texas              W. GREGORY STEUBE, Florida
JOE NEGUSE, Colorado
LUCY McBATH, Georgia
GREG STANTON, Arizona
MADELEINE DEAN, Pennsylvania
DEBBIE MUCARSEL-POWELL, Florida
VERONICA ESCOBAR, Texas

        Perry Apelbaum, Majority Staff Director & Chief Counsel
                Brendan Belair, Minority Staff Director
                                 ------                                

               SUBCOMMITTEE ON ANTITRUST, COMMERCIAL AND 
                           ADMINISTRATIVE LAW

                DAVID N. CICILLINE, Rhode Island, Chair
                    JOE NEGUSE, Colorado, Vice-Chair
HENRY C. ``HANK'' JOHNSON, Jr.,      F. JAMES SENSENBRENNER, Jr., 
    Georgia                              Wisconsin, Ranking Member
JAMIE RASKIN, Maryland               KEN BUCK, Colorado
PRAMILA JAYAPAL, Washington          MATT GAETZ, Florida
VAL BUTLER DEMINGS, Florida          KELLY ARMSTRONG, North Dakota
MARY GAY SCANLON, Pennsylvania       W. GREGORY STEUBE, Florida
LUCY McBATH, Georgia

                       Slade Bond, Chief Counsel
                    Daniel Flores, Minority Counsel 
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                            C O N T E N T S

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                             JUNE 11, 2019
                           OPENING STATEMENTS

                                                                   Page
The Honorable David Cicilline, Chairman, Subcommittee on 
  Antitrust, Commercial and Administrative Law...................     1
The Honorable Kelly Armstrong, Member, Subcommittee on Antitrust, 
  Commercial and Administrative Law..............................     4
The Honorable Jerrold Nadler, Chairman, Committee on the 
  Judiciary......................................................    10
The Honorable Doug Collins, Ranking Member, Committee on the 
  Judiciary......................................................    11

                               WITNESSES

David Chavern, President, News Media Alliance
    Oral Testimony...............................................    15
    Prepared Testimony...........................................    18
Gene Kimmelman, President, Public Knowledge
    Oral Testimony...............................................    24
    Prepared Testimony...........................................    26
Sally Hubbard, Director of Enforcement Strategy, Open Markets 
  Institute
    Oral Testimony...............................................    35
    Prepared Testimony...........................................    37
Matthew Schruers, Vice President of Law and Policy, Computer and 
  Communications Industry Association
    Oral Testimony...............................................    56
    Prepared Testimony...........................................    58
David Pitofsky, General Counsel, News Corp
    Oral Testimony...............................................    69
    Prepared Testimony...........................................    71
Kevin Riley, Editor, Atlanta Journal Constitution
    Oral Testimony...............................................    79
    Prepared Testimony...........................................    81

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

A statement for the record by Ranking Member Sensenbrenner 
  submitted by the Honorable Kelly Armstrong, Member, 
  Subcommittee on Antitrust, Commercial and Administrative Law...     6
A statement for the record by Laura Basset and John Stanton 
  submitted by The Honorable David Cicilline, Chairman, 
  Subcommittee on Antitrust, Commercial and Administrative Law...   107
A letter for the record by the Electronic Privacy Information 
  Center from The Honorable David Cicilline, Chairman, 
  Subcommittee on Antitrust, Commercial and Administrative Law...   111

                                APPENDIX

A letter for the record by Consumer Reports from The Honorable 
  David Cicilline, Chairman, Subcommittee on Antitrust, 
  Commercial, and Administrative Law.............................   118
Supplementary Testimony by Gene Kimmelman, University of 
  Chicago's George J. Stigler Center Report on Digital Platforms 
  from The Honorable David Cicilline, Chairman, Subcommittee on 
  Antitrust, Commercial, and Administrative Law..................   120

 
 ONLINE PLATFORMS AND MARKET POWER, PART 1: THE FREE AND DIVERSE PRESS

                              ----------                              


                         TUESDAY, JUNE 11, 2019

                        House of Representatives

               Subcommittee on Antitrust, Commercial and 
                           Administrative Law

                       Committee on the Judiciary

                            Washington, DC.

    The subcommittee met, pursuant to call, at 2:37 p.m., in 
Room 2141, Rayburn House Office Building, Hon. David Cicilline 
[chairman of the subcommittee] presiding.
    Present: Representatives Cicilline, Nadler, Johnson, 
Raskin, Jayapal, Demings, Scanlon, Neguse, McBath, Collins, 
Gaetz, Armstrong, and Steube.
    Also Present: Representative Jackson Lee.
    Staff Present: David Greengrass, Senior Counsel; John Doty, 
Senior Advisor; Madeline Strasser, Chief Clerk; Moh Sharma, 
Member Services and Outreach Advisor; Amanda Lewis, Counsel; 
Joseph Van Wye, Professional Staff Member; Lina Khan, Counsel; 
Slade Bond, Chief Counsel; Daniel Flores, Minority Chief 
Counsel; and Andrea Woodard, Minority Clerk.
    Mr. Cicilline. The committee will come to order.
    The chair is authorized to declare recesses of the 
committee at any time.
    We welcome everyone to our first hearing on Online 
Platforms and Market Power Focusing on the Free and Diverse 
Press.
    I now recognize myself for an opening statement.
    In recent years, there has been a cascade of competition 
problems on the Internet. Concentration in the digital 
advertising market has pushed local journalism to the verge of 
extinction. The combination of predatory acquisitions, a 
growing innovation kill zone, and high network effects and 
switching costs appear to have undermined entrepreneurship and 
startup rates.
    And the sheer dominance of some platforms has resulted in 
worse products and significantly less choice leaving people 
without a competitive alternative to services that harvest 
their data, manipulate their behavior, and monetize their 
attention.
    In response to these trends, the committee announced last 
week that we will conduct a bipartisan investigation into 
competition in the online marketplace. The purpose of this 
investigation is to document anticompetitive conduct online, 
examine whether dominant firms are engaging in anticompetitive 
conduct, and assess whether our competition system and current 
enforcement levels are adequate to address these problems.
    Over the coming months, we will conduct a top-to-bottom 
review of online markets through a series of hearings on these 
topics, request information that is relevant to the 
investigation, and engage in a series of discussions with key 
stakeholders and policy experts.
    This is the first significant antitrust investigation 
undertaken by Congress in decades. In the past, these 
investigations, which included studies of monopoly power in the 
airline industry, banking, oil and Ma Bell led Congress to 
consider whether it needed to make changes to our laws and 
agencies. I strongly believe that this investigation is long 
overdue.
    This subcommittee has a constitutional responsibility to 
conduct oversight of our antitrust laws and competition system 
to ensure that they are properly working. Congress, not the 
courts, agencies, or private companies, enacted the antitrust 
laws. And Congress must be responsible for determining whether 
they are equipped for the competition problems of our modern 
economy.
    Today's hearing is the first step in this process for 
examining these trends. The free and diverse press is the 
backbone of our vibrant democracy. As Justice Louis Brandeis 
wrote in 1927, those who want our independence believe that 
public discussion is a political duty, that the greatest threat 
to freedom is an uninformed citizenry and that the freedom of 
thought and speech are indispensable to the discovery and 
spread of political truth.
    But over the past decade, the news industry has been in a 
state of the economic free fall. From 2006 to 2017, advertising 
revenue has fallen from $49 billion to $15.6 billion resulting 
in mass layoffs of newspapers--mass layoffs or newspapers 
folding altogether. This year alone, roughly 2900 reporters and 
other news staff have already lost their jobs.
    These massive cuts are happening to traditional news 
companies and online news sources alike. For example, earlier 
this year, The Cleveland Plain Dealer announced another round 
of layoffs due to advertising losses reducing its staff by 80 
percent from employment levels just 7 years ago. BuzzFeed and 
the Huffington Post have also announced significant layoffs. 
These are online publishers that have never relied on revenue 
from classified sections or subscriptions and are designed to 
appeal to readers on social media sites and mobile devices.
    This raises a critical question. If online news publishers 
can't survive, then who can? During this same period, online 
platforms that are gateways to news online have operated with 
virtual immunity from the antitrust laws. Since 2007, Google 
has acquired several of its competitors in the online 
advertising market resulting in significant concentration and a 
complete lack of transparency in this market.
    And since 2011, another dominant online platform, Facebook, 
has acquired two of its rivals, Instagram and WhatsApp, in an 
effort to corner the market for social media services and 
advertising on these services. Facebook now controls a user 
base of 2.7 billion people worldwide, the largest 
communications platform in human history. It soon plans to 
combine its products into a single platform, a move critics 
have suggested Facebook is making to thwart antitrust 
enforcement.
    As Australia's competition authority noted in its 
preliminary report on digital platforms, both Google and 
Facebook have substantial market power in a number of markets 
that is unlikely to erode over time through new competitive 
threats. There have also been numerous reports of these 
platforms engaging in anticompetitive conduct such as favoring 
their own products or discriminating against rivals that has 
gone unchecked by Congress and unchallenged by antitrust 
enforcers in the United States.
    These trends strongly suggest that the decline of the new 
industry is not the inevitable result of the arrival of the 
Internet, but is instead a direct consequence of enforcement 
choices that have created a market structure where a small 
number of platforms are capturing the value created by 
journalists and publishers.
    This has affected news publishers in two key ways. First, 
news publishers rely on Google and Facebook for the vast 
majority of traffic online. Even minor changes to the 
platform's algorithms can have significant effects on the news 
industry overall.
    Furthermore, as a result of this immense concentration of 
economic power, news publishers, and local news in particular 
have little bargaining power with the online platforms 
exacerbating the economic crisis for trustworthy news.
    Second, these platforms have a dominant position in the 
advertising market. Last year, Facebook and Google amassed more 
than $60 billion from online advertising, the majority of all 
online ad revenue, while controlling 90 percent of the growth 
in this market. As David Chavern, the president of the News 
Media Alliance, will testify today, this dynamic has resulted 
in economic catastrophe for news publishers forcing them to cut 
back on their investments and quality journalism.
    In response, I have introduced the Journalism Competition 
and Preservation Act with Ranking Member Collins to give news 
publishers an even playing field to collectively negotiate with 
dominant platforms to improve the quality, accuracy, 
attribution, and interoperability of news online.
    While I do not view this legislation as a substitute for 
more meaningful competition online or antitrust scrutiny, it is 
clear that we must do something in the short-term to save 
trustworthy journalism before it is lost forever. This bill is 
a life support measure, not the remedy for long-term health.
    Whether it is an online publisher or a local newspaper, we 
cannot have a democracy without a free and diverse press. Our 
country will not survive if we do not have shared facts, if 
corruption is not exposed and rooted out at all levels of 
government, and if power is not held to account. This is the 
very reason the press is called the fourth estate.
    I view today's hearing as an opportunity to continue the 
conversation on how to address this crisis. Both I and the 
ranking member are open to exploring ways to strengthen the 
Journalism Competition and Preservation Act. My hope is that 
today's hearing will serve as the starting point in this 
discussion.
    I thank our panel of extraordinary experts for 
participating in today's hearing, and I look forward to hearing 
your testimony.
    At this time, I yield to Mr. Armstrong for his opening 
statement.
    Mr. Armstrong. I don't know where the button is over here.
    So, no, I appreciate that. And I--at this time, I would ask 
unanimous consent to enter Congressman Sensenbrenner's 
statement into the record.
    Mr. Cicilline. Without objection, so ordered.
    [The statement of Mr. Sensenbrenner follows:]
      

                      MR. ARMSTRONG FOR THE RECORD

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    Mr. Armstrong. And the best thing I can do for all of you 
is give you as much time as possible. So with that, I will 
yield.
    Mr. Cicilline. I thank the gentleman.
    The chair now recognizes the chairman of the full 
committee, the gentleman from New York, Mr. Nadler, for his 
opening statement.
    Mr. Nadler. Thank you, Mr. Chairman, for holding today's 
hearing.
    And before I deliver my statement, let me apologize. I am 
going to have to leave afterwards. We have a slight resolution 
on the floor I have to deal with.
    Over the course of the last 200 years, Congress has 
routinely passed laws to protect and advance a free and diverse 
press. Whenever new technologies have transformed how Americans 
produce and share news, be it the telegraph, the radio, the 
telephone, or broadcast television, Congress has sought to 
ensure that these new markets were structured to facilitate the 
free flow of information and to protect the independence and 
financial viability of the press.
    Today as the Internet becomes the dominant platform for 
accessing news and as this platform grows more and more 
concentrated in the hands of just two major companies, the news 
media once again faces serious threats. And congressional 
action, once again, may be required.
    As avenues for accessing news have narrowed in recent 
years, advertising revenue, which is the primary means of 
support for most news publishers, has steadily declined as 
well. And as revenue has fallen, so too has the number of 
journalists whose work can be supported by news publications.
    Local news outlets have been the most severely affected by 
this trend, with nearly 2,000 local news publishers ceasing 
operations since 2007. In fact, the majority of counties in the 
United States no longer have a publisher of local news at all. 
Hundreds of other publishers have been forced to consolidate or 
shrink their operations.
    This journalism crisis is also a democracy crisis. As 
sources of trustworthy news disappear, American civic life 
suffers. The majority of local newspapers and television 
stations no longer even assign a reporter to cover State and 
local government matters.
    With a less informed citizenry, communities without quality 
local news generally see lower rates of voter turnout. And 
cities where newspapers shut down have even seen their 
borrowing costs rise suggesting, according to one study, that 
diminished transparency may enable governments to engage in 
riskier and more inefficient or perhaps more corrupt financing 
arrangements.
    While there are a number of causes of this multi decade 
decline in the news industry, including reduced print 
circulation and reduced revenue from classified advertisements, 
one of the major concerns that has emerged in recent years is 
the power of a small number of gatekeepers over the news and 
information that citizens see.
    Today, the vast majority of Americans consume their news 
online. And two online platforms have immense control over how 
Americans access their news sources. A single algorithm change 
by one of these private corporations can entirely distort what 
information the public shares and consumes and what revenue the 
publisher receives.
    Moreover, these same platforms dominate the online 
advertising market, and they account for nearly all of the 
growth in this market in recent years. No single factor has led 
to this immense concentration of control, but it is incumbent 
on Congress to understand the sources of this problem and to 
address it urgently.
    The American tradition has long recognized that preserving 
an open marketplace of ideas is vital to safeguarding the 1st 
Amendment and vital to a Democratic form of government. The 
antitrust and antimonopoly laws have been a primary way that 
lawmakers and regulators have policed the problem of overly 
concentrated markets. When Congress enacted the antitrust laws, 
it was with the purpose of protecting economic opportunity and 
political equality.
    Senator John Sherman, the author of the Sherman Antitrust 
Act, referred to the first antitrust law as a bill of rights 
and a charter of liberty. Overly concentrated--and he didn't 
regard it as simply a question of economic efficiency or 
reducing prices. Overly concentrated markets concentrate 
economic and political power and stifle competition.
    It is important to keep these broad goals of reducing 
concentration and promoting competition in mind as we examine 
how online platforms impact the free and diverse media. As the 
judge reviewing the consent decree breaking up AT&T wrote, 
quote, ``in promoting diversity and sources of information, the 
values underlying the 1st Amendment coincide with the policy of 
the antitrust laws,'' closed quote.
    Congress also has a constitutional duty to ensure that 
markets are structured in a way that is compatible with our 
democratic values. While new technologies may upend how news 
and information are shared, it is vital that we maintain open 
and competitive markets which will best foster a robust 
independent press.
    With this in mind, I welcome today's hearing as the 
beginning of the committee's investigation of competition in 
digital markets, and I look forward to hearing from our panel 
of experts.
    And I thank the chairman, and I yield back.
    Mr. Cicilline. I thank the chairman for yielding back.
    The chair now recognizes the ranking member of the full 
committee, the gentleman from Georgia, Mr. Collins, for his 
opening statement.
    Mr. Collins. Thank you, Chairman Cicilline. And thanks for 
holding this hearing today. I am glad that you and I have found 
some commonality in this and look forward to working together.
    This is the first of many hearings and oversight activity 
the subcommittee expects to hold over the coming months on the 
important antitrust and competition issues in the tech sector.
    I firmly support this initiative. The conversations we will 
have in our committee are critical as Congress evaluates the 
depth, breadth, and importance of these tech issues and whether 
any amendments to the antitrust laws are needed. The public 
understanding of these issues and the evolving role of tech in 
the daily lives of the American people are equally important as 
we have these discussions.
    If we do identify needs for new legislation, it is 
important we keep two principles in mind. First, like the 
existing antitrust laws, new legislation be consistent in 
keeping the free market free. Proposals to construct broad new 
regulatory regimes should be viewed with caution. Experience 
shows that regulatory solutions often miss the mark, solve 
problems less efficiently than free markets, and can create new 
opportunities for anticompetitive companies to suppress 
competition through rent seeking. That is especially true when 
regulation attempts to take on evolving problems in fast moving 
markets like tech. I speak from experience here. I have worked 
through these before.
    And we have to make sure that we are not looking for an 
immediate solution to the soreness in our foot and recognize 
that we have a problem with our leg. We need to make sure we 
are working this through.
    Secondly, big is not necessarily bad. Companies that offer 
new innovations, better solutions, and more consumer benefit at 
lower prices often become big to the benefit of society, 
shockingly. Proposals to break up big companies just because 
they are big risk throwing out the baby with the bath water. 
And any discussion that simply moves to that discussion first 
is not the right way to move.
    It is because I embrace these principles that I am excited 
to have joined Subcommittee Chairman Cicilline in the 
introduction of the Journalism Competition and Preservation 
Act. This bill takes head on the problem of local and other 
news organizations disappearing from the public square as news 
consumption moves increasingly online.
    A vibrant press has been critical to the success of our 
democracy since the founding of the republic. In the old days, 
press organizations were able to thrive based on their 
subscription and advertising revenues. But as news consumption 
has moved to the Internet, traditional subscriptions are 
speedily drying up, and online advertising revenues are 
increasingly becoming dominated by online platforms. As a 
result, news organizations across the country are rapidly 
losing their economic lifeblood and disappearing from the 
public square.
    If individual news outlets could count on being able to 
negotiate fair attribution and advertising revenue agreements 
with the online platforms, the bleeding could be stopped. The 
problem, however, is that smaller news organizations don't 
stand a fair negotiating chance when they try to negotiate 
deals with a platform giant. These giants stand as a 
bottleneck, a classic antitrust problem but consumers--between 
consumers and the producers of news content.
    Journalism Competition Preservation Act seeks to solve this 
problem simply: By allowing news publications to take the 
platforms bottleneck together. Specifically, the bill allows 
the publications 4 years in which they can collectively 
negotiate with the platforms without fearing antitrust 
enforcement against that activity. In other words, the bill 
allows news publications to take on an antitrust problem 
without worrying that the antitrust laws themselves will stand 
in the way.
    It does not propose any new regulatory structures. It does 
not threaten to break up any company. It does promise to simply 
and effectively solve the problem.
    Today's hearing provides an excellent opportunity to 
examine this bill and other issues related to journalism in an 
online environment. These issues include matters as diverse as 
a boon in tech mergers and acquisitions to the mushrooming 
problem of online outlets that freeze viewpoints out of the 
online public square.
    As we begin this, for all that are here, and many of you 
are here representing a large diverse group, I met with many of 
you over the years. Understand from my position as I have 
stated clearly the principles that I have laid out. And as we 
go forward this, anything that happens should be done when 
everyone comes to the table.
    Everyone has a chance to share their opinion. Everyone has 
a chance to offer what may or may not be good legislative 
solutions. It is up to this body to hear honestly from the 
people and the companies involved. If we take everybody at face 
value, it is the American people at the end of the day that 
will benefit.
    I promise from my perspective, and our side will not rush 
to judgment. We encourage you to decide to not rush to 
judgement and companies to participate in a positive solution. 
When this body does that, we have seen great things happen. 
When we do not, we end up with more problems than we began 
with.
    With that, I yield back.
    Mr. Cicilline. I thank the gentleman for yielding back.
    It is now my pleasure to introduce today's witnesses. Our 
first witness is David Chavern, the president and CEO of the 
News Media Alliance, where he has been since 2015. Mr. Chavern 
spent 10 years at the United States Chamber of Commerce in a 
number of executive roles, including executive vice president, 
chief operating officer, and chief of staff. He is a member of 
the board of directors of Transamerica Insurance and serves on 
the board of trustees at the University of Pittsburgh, his alma 
mater. Mr. Chavern received his bachelor of arts at the 
University of Pittsburgh, his MBA from Georgetown University, 
and his JD from Villanova University School of Law.
    Our second witness is the president and CEO of Public 
Knowledge, Gene Kimmelman. Before his time at Public Knowledge, 
Mr. Kimmelman served as the director of the Internet Freedom 
and Human Rights Project at the New America Foundation and as 
the chief counsel for the U.S. Department of Justice Antitrust 
Division. He has also served as chief counsel and staff 
director for the Antitrust Subcommittee of the Senate Judiciary 
Committee as well as the legislative director for the Consumer 
Federation of America. Mr. Kimmelman currently serves as an 
adjunct professor at Georgetown Washington University School of 
Law, a senior fellow at the Silicone Flatirons Center for Law, 
Technology, and Entrepreneurship at the University of Colorado 
and on the boards of both International Media Support and 
Global Partners Digital. He received his BA from a spectacular 
university, Brown University in Providence, Rhode Island, and 
his JD from the University of Virginia.
    Our third witness is Sally Hubbard, the director of 
enforcement strategy at the Open Markets Institute. Prior to 
her time with Open Markets, Ms. Hubbard was the senior editor 
of antitrust enforcement and regulation of tech platforms at 
the Capitol Forum. She has also spent 7 years as the assistant 
attorney general at the New York State office of the attorney 
general's antitrust bureau. Ms. Hubbard earned her bachelor of 
arts at the college of William and Mary and her JD at New York 
University School of Law.
    Our fourth witness on the panel is Matthew Schruers, the 
vice president of law and policy at the Computer and 
Communications Industry Association. As vice president, he 
advises Internet and technology companies on matters including 
Internet law, intellectual property competition, and trade. 
Additionally, he is an adjunct professor at Georgetown 
University Law Center, the Georgetown Graduate School, and the 
American University, Washington College of Law. Mr. Schruers 
received his BA from Duke University and his JD from the 
University of Virginia Law School.
    Our fifth witness is David Pitofsky, executive president 
and general counsel at News Corp, the son of the dean of 
Georgetown Law School when I attended it. Prior to joining News 
Corp, Mr. Pitofsky was a partner at Goodwin Procter LLP where 
he focused on white collar defense and securities litigation 
and enforcement. He has also served as an assistant U.S. 
attorney in the Eastern District of New York where he was the 
deputy chief of the criminal division. Mr. Pitofsky is a member 
of the executive committee of the Federal Bar Counsel and an 
officer of the Federal Bar Foundation. He received his BA from 
the University of Michigan and his JD from Georgetown 
University Law Center.
    It is now my pleasure to yield to the gentleman from 
Georgia for our final introduction, Mr. Collins.
    Mr. Collins. Thank you, Mr. Chairman.
    I appreciate this. This is an interesting thing from my--
from being a member of Congress now to be introducing a member 
of the press from my own State, which I am please to do.
    It is an honor and a privilege to welcome Kevin Riley to 
Capitol Hill today. Kevin serves as the editor of the Atlanta 
Journal Constitution in my home State of Georgia. As those of 
you from Georgia know, the AJC is one of the best in the 
business. Even though it is located in Atlanta, I would argue 
it is where the entire State of Georgia goes to get their news.
    Kevin has served as editor for nearly 10 years now and has 
worked in the news industry for nearly 40. In 2001, the 
Newspaper Association of America named Riley one of the 
industry's 20 under 40 up-and-comers, and he is well-known as 
an effective collaborative and innovative leader.
    But you know sometimes you need to say a little more. So we 
asked one of his reporters, Greg Bluestein of the AJC that 
works for Kevin describe how he would describe his boss. I 
think it is very telling.
    Kevin is the type of editor who encourages the reporters to 
experiment and try new things by doing it himself. Shortly 
after the AJC unveiled a personal journey feature, he wrote a 
masterful story about a World War II veteran returning to the 
French battlefield for the fist time since the fight helping to 
unlock a 69-year-old mystery in the process. And when we 
started getting involved in the podcast, Kevin headlined a 
season of the Breakdown show focusing on the murders of two 
young Atlantans. As we in the newspaper industry face more 
demands to tell stories in different ways, Kevin has been on 
the forefront of going on TV and radio to share our work.
    He goes on to say, I am not just sucking up by saying this. 
Kevin is a perfect example of the case to lead.
    And I think another one of your reporters Tamar Hallerman 
is here as well and probably would say the same thing. The 
perfect cases lead by example, and I can't think of a better 
compliment.
    Earlier this year before we even introduced the Journalism 
Competition and Preservation Act, Kevin called to explain how 
critical this bill is for the AJC, for communities across 
Georgia, and for the entire newspaper industry. Local 
journalism is a core part of every community in Georgia and 
nationwide, and it is an honor to have a member of our local 
media here today.
    And I yield back.
    Mr. Cicilline. I thank the gentleman.
    We welcome all of our very distinguished witnesses and 
thank you for participating in today's hearing.
    Now, if you would please rise, I will begin by swearing you 
in.
    Please raise your right hands.
    Do you swear or affirm, under penalty of perjury, that the 
testimony you are about to give is true and correct to the best 
of your knowledge, information, and belief, so help you God?
    Thank you.
    Let the record reflect that the witnesses answered in the 
affirmative.
    You may be seated.
    Please note that each of your witness statements will be 
entered into the record in its entirety. Accordingly, I ask 
that you summarize your testimony in 5 minutes. And to help you 
stay within that time, there is a timing light on the table. 
When the light switches from green to yellow, you have 1 minute 
to conclude your testimony. When the light turns red, it 
signals your 5 minutes have expired.
    Mr. Chavern, you may begin. You are recognized for 5 
minutes.

  TESTIMONY OF DAVID CHAVERN, PRESIDENT, NEWS MEDIA ALLIANCE; 
  GENE KIMMELMAN, PRESIDENT, PUBLIC KNOWLEDGE; SALLY HUBBARD, 
   DIRECTOR OF ENFORCEMENT STRATEGY, OPEN MARKETS INSTITUTE; 
MATTHEW SCHRUERS, VICE PRESIDENT, LAW AND POLICY, COMPUTER AND 
 COMMUNICATIONS INDUSTRY ASSOCIATION; DAVID PITOFSKY, GENERAL 
 COUNSEL, NEWS CORP; AND KEVIN RILEY, EDITOR, ATLANTA-JOURNAL 
                          CONSTITUTION

                   TESTIMONY OF DAVID CHAVERN

    Mr. Chavern. Thank you. Chairman Cicilline, Chairman 
Nadler, Ranking Member Collins, Representative Armstrong, and 
members of the subcommittee, thank you for inviting me to 
participate in today's hearing.
    My name is David Chavern, and I am the president and CEO of 
the News Media Alliance, a nonprofit trade association 
representing over 2,000 publishers across the United States. 
Our members include some of the largest news organizations 
covering events around the globe as well as local publishers 
focussing on the issues that impact communities and the daily 
lives of citizens in every state and congressional district.
    The news media has played a key role in our democracy since 
its founding. The mission has been to enrich society's 
understanding and foster public discourse that is vital to a 
healthy democracy. And over the years, the news media has 
filled that mission extremely well.
    We are also an industry that has fully embraced a digital 
future. Publishers offer a wide array of innovative and 
compelling online experiences sustained by truly great 
journalism. And my membership includes a number of digital only 
news publishers.
    But the rise of digital news distribution has also 
introduced new and potentially existential threats to the news 
industry. Specifically the emergence of dominant tech platforms 
as intermediaries between publishers and their audiences. 
Online platforms serve an important purpose. Today, 93 percent 
of Americans get at least some of their news online. These 
platforms help users find great journalism. And in doing so, 
they have contributed to the enormous growth in news audiences 
over the past 2 decades.
    In the same way the digital platforms are critical for 
online news, online news is critical for the digital platforms. 
The public demand for quality journalism is massive and 
growing, and that has driven deep engagement with Facebook and 
Google. A study we released yesterday estimates that news 
content generated some $4.7 billion for Google in 2018.
    The platforms and news organizations mutual reliance would 
not be a problem if not for the fact that the concentration 
among the platforms means that a small number of companies now 
exercise an extreme level of control over the news. And, in 
fact, a couple of dominant firms act as regulators of the news 
industry. Only these regulators are not constrained by 
legislative or Democratic oversight.
    The result has been to siphon revenue away from news 
publishers. This trend is clear if you compare the growth in 
Google's total advertising revenue to the decline in the news 
industries' ad revenue.
    In 2004, Google's U.S. revenue was 2.1 billion while the 
newspaper industry accounted for 48 billion in advertising 
revenue. In 2017, in contrast, Google's U.S. revenue had 
increased over 25 times to 52.4 billion while the newspaper 
industry's ad revenue had fallen 65 percent to 16.4 billion.
    The effect of this revenue decline in publishers has been 
terrible, and they have been forced to cut back on their 
investments in journalism. That is a reason why newsroom 
employment has fallen nearly a quarter over the last decade. 
One question that might be asked is if the platforms are on 
balance having such a negative impact on the news media, then 
why don't publishers do something about it?
    The answer is they cannot, at least under the existing 
antitrust laws. News publishers face a collective action 
problem. No publisher on its own can stand up to the tech 
giants. The risk of demotion or exclusion from the platforms is 
simply too great. And the antitrust laws prevent news 
organizations from acting collectively. So the result is that 
publishers are forced to accept whatever terms and restrictions 
are imposed on them.
    The Journalism Competition and Preservation Act introduced 
by Chairman Cicilline and Ranking Member Collins is an 
innovative market-oriented solution to this collective action 
problem. Markets work best when both parties have some leverage 
to ask for better terms and to credibly withdraw from 
negotiations if the other side's demands are unreasonable.
    Our goal is actually to find a way to work sustainably with 
the online platforms to give Americans the best journalism 
possible. Present trends in the news business simply cannot 
continue. Without some action to give news publishers a voice 
in their future, we will all experience the effects of deep 
financial stress in this industry and the loss of great 
important journalism in communities across the country.
    It is not too much to say that the very fabric of our civic 
society is at risk. And this is not a problem that will be 
solved by private charity, from individuals, or even the big 
platforms themselves. What we need are sustainable business 
relationships that return value to the great important 
journalists who create the news content on which we all depend.
    Again, thank you very much for having me here today.
    [The statement of Mr. Chavern follows:]

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    Mr. Cicilline. Thank you, Mr. Chavern.
    Mr. Kimmelman, you are now recognized for 5 minutes.

                  TESTIMONY OF GENE KIMMELMAN

    Mr. Kimmelman. Thank you, Mr. Chairman, members of the 
subcommittee. On behalf of Public Knowledge, I appreciate the 
invitation to testify today.
    Your opening statements across the--across the board 
highlight what I think are the natural economic tendencies of 
what has happened in the digital marketplace. We have enormous 
sunk cost in platforms that then return scale economies and 
scope economies with declining costs. These are network effect 
industries. It is not new to our economy. This is a new form of 
it. And what we see is a tendency towards a few companies 
dominating in that space. It is the natural economics of the 
space.
    And you have also highlighted the concern about gatekeeper 
roles and bottlenecks. And we have a history of this, of 
concern about this. And the history includes all of the media 
including the newspapers, for abusive power when we have had 
too much concentration, too few players in the marketplace, too 
few independent voices that stifle a marketplace of ideas.
    So we have had these problems in the past with previous 
technologies. We are having them again now. In some instances, 
antitrust has been the right tool to address them. In some 
instances, Congress has stepped in with other policy solutions. 
I urge you to consider all of that.
    We have massive power here in the marketplace of ideas, and 
it stems both on the technology side and on the content and 
distribution side. I think all of it needs to be looked at.
    It is important to fight against concentrated power and 
dominance at all levels of the distribution chain and to 
maximize competitive market forces, particularly when they 
involve the marketplace of ideas. Clearly we need strong 
enforcement of the antitrust laws, and we need to consider new 
laws. I appreciate the committee stepping in to begin this 
detailed study.
    But it is important that, as we attempt to stop these 
abuses where we find them, that we don't create new monopoly 
power just to take on dominance. It is critical to tackle 
dominance head on and not create more monopoly.
    The digital marketplace, as we all know, has totally 
transformed our lives. It has destroyed all kinds of brick-and-
mortar players, industries, companies, and that includes 
classified and display ads in the print business. It is much 
broader than just news, news as being important.
    What I am afraid we need to confront is the money from that 
old model, from that business model, will never come back. It 
is gone. I think journalism needs to consider a new business 
model, and we should do everything we can with public policy 
tools to help. The digital age will require new forms of 
creative financing in order to get local news and fight 
misinformation in the marketplace. Public support will be 
necessary.
    I urge you to consider creating some kind of public service 
duty of care to deliver trustworthy information, not 
subsidizing companies or industries but instead promoting fact-
checking information accuracy services that deliver value and 
that can be supported to protect local media and news in 
particular.
    In a digital platform space, I think what is most important 
is to look at those natural economic tendencies towards--
tipping towards dominance, creating barriers to entry that make 
it very difficult to foster competition and innovation in the 
markets and examine whether anyone is putting their thumb on 
the scale either in violation of the antitrust laws or 
otherwise principles of fairness in our society.
    That is why your inquiry is so important, and I commend 
your effort to look carefully both at what the problems are and 
what the possible solutions should be.
    Consumers themselves are actually reinforcing the problem. 
We are on the negative side lazy but mostly just complacent to 
do what is simple. That reinforces the power of those who have 
our attention in the first place and can find ways to make it 
very attractive for us not to consider competitive options, new 
options, better news as opposed to just salacious information.
    It is important that we look at all policy tools that are 
available to address these concerns. Antitrust can do something 
to try to improve enforcement. But where you have dominance in 
markets, few players, little entry, often you need broader 
policy tools. I urge you to consider nondiscrimination, 
interoperability where there is bottleneck problems. We have 
done this in telecommunications before. We have done it in the 
cable industry. This would not be a first for Congress. Now is 
the time to consider it for digital platforms.
    Thank you.
    [The statement of Mr. Kimmelman follows:]
 
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    Mr. Cicilline. Thank you, Mr. Kimmelman.
    The chair now recognizes Ms. Hubbard for her opening 
statement for 5 minutes.

                   TESTIMONY OF SALLY HUBBARD

    Ms. Hubbard. Chairman Cicilline and members of the 
subcommittee, thank you for inviting me to speak with you 
today.
    In my view as a former antitrust enforcer, the starving of 
journalism and the disinformation crisis are both, in good 
part, monopoly problems. I have been writing about antitrust 
and tech platforms since the summer of 2016 when I noticed that 
the tech giants, Google, Apple, Facebook, and Amazon, were all 
doing the same types of things that Microsoft had been sued for 
nearly 20 years earlier. They were leveraging their market 
power to make fair competition impossible.
    These tech giants are gatekeepers that also compete against 
companies that must get through their gates to reach users. 
News publishers must get through Facebook and Google's gates 
due to the two platforms' concentrated control over the flow of 
information.
    But Facebook and Google compete against news publishers for 
user attention, data, and ad dollars. They are controlling the 
game and playing it too.
    Publishers never had a fair shot, nor do they have 
bargaining power against the platforms. The platforms can cut 
them off with a simple tweak of their algorithms. Facebook and 
Google exploit their middleman positions to divert ad revenue 
away from publishers and into their own pockets. And the 
platforms can hyper target users based on their 360-degree 
views of what their users read, think, and do, thanks to their 
ability to track users across millions of websites and even 
offline.
    Last year, Facebook and Google accounted for approximately 
85 percent of the growth of more than--of the more than $150 
billion digital ad market in the U.S. and the EU according to 
Digital Content Next, which is a main trade association for 
publishers.
    As for disinformation, Facebook and YouTube program their 
algorithms to prioritize engagement which amplifies propaganda. 
Through surveillance, Facebook and Google learn what messages 
people are susceptible to whether ads or propaganda. Then they 
rent out these manipulation machines to others for huge profit.
    The scale of the manipulation is massive because of 
Facebook and Google's dominance. And the platform's lack of 
competitive pressure to fix the disinformation problem because 
the closest subsidy for Facebook users is Instagram which 
Facebook owns. Users need to be able to vote with their feet 
and switch to alternatives.
    To their credit, Facebook and Google started on their paths 
to dominance with innovation. But their monopoly power is not 
purely the result of competing on the merits. Facebook has 
repeatedly acquired rivals including Instagram and WhatsApp. 
And Google's acquisition cemented its market power throughout 
the ad ecosystem as it bought up the digital ad market spoke by 
spoke including Applied Semantics, AdMob, and DoubleClick.
    Together Facebook and Google have bought 150 companies in 
just the last 6 years. Google alone has bought nearly 250 
companies. Thus far, antitrust enforcers have not stood in 
their way nor have they stopped Facebook and Google from 
leveraging their monopoly power to exclude competition.
    Weak antitrust enforcement set the stage for these 
platforms to extract the fruits of publishers' laborer as much 
as monopolies are extracting wealth across most sectors of our 
economy. Monopolies are putting the American Dream at risk as 
people, including journalists, are not rewarded for their 
efforts.
    Beginning immediately, antitrust enforcers should prevent 
Facebook and Google from acquiring competitive threats and 
companies that fortify their monopoly power. They should unwind 
anticompetitive deals and divest subsidiaries to open up 
competition, and they should stop exclusionary practices.
    Antitrust enforcement alone won't solve everything 
discussed here today, but we won't be able to solve anything 
unless we weaken monopoly's power. It is a necessary but not 
sufficient condition. News is a social good that is essential 
to hold power account. It was a journalist named Ida Tarbell 
that took down the most notorious monopoly in U.S. history, 
Standard Oil.
    News deserves special protection like it has had throughout 
American history through nondiscrimination and interoperability 
rules. We also need rules to curb invasive data collection by 
default and to give citizens ownership of their data.
    The good news is we have been here before, as Gene pointed 
out. We have--these are not new challenges. We have stood up to 
powerful tech monopolists. Each time we are better for it. We 
only see new waves of innovation. We have restored our markets 
and removed gatekeepers.
    But if we don't act now to change the structure of our 
markets, titans will continue to control speech, journalism 
will continue to wither, and so will our democracy.
    Thank you.
    [The statement of Ms. Hubbard follows:]


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    Mr. Cicilline. Thank you, Ms. Hubbard.
    The chair now recognizes Mr. Schruers for 5 minutes.

                 TESTIMONY OF MATTHEW SCHRUERS

    Mr. Schruers. Thank you, Mr. Chairman, members of the 
committee. On behalf of the Computer and Communications 
Industry Association, an association of technology, Internet, 
and communications firms, I appreciate the opportunity to 
appear today.
    Let me begin by acknowledging that success brings scrutiny. 
Digital technology and the Internet has revolutionized the U.S. 
economy and the global economy. The industry leaders are names 
recognized around the world. Some of the most prominent brands 
we know. We welcome an evidence-driven conversation and 
examination of this transformation and the firms that are 
leading it.
    But declining newspaper prospects are an independent 
phenomenon. Firms that date, at the oldest, from the 1990s did 
not start this trend in the 1980s. Technology has challenged 
some news publishers business models in part by ushering in 
extensive new competition, globalizing the advertising market, 
and disrupting the dominant local advertising position that 
many publishers once had.
    Because journalism is important to any democracy, we share 
the goal of ensuring that it continues. Digital services play 
an important role in doing that. In fact, digital services 
provide benefits to three separate constituencies, users, news 
producers, and advertisers.
    We know users attribute thousands of dollars in value to 
free-of-charge online services and turn to them for answers, 
entertainment, education, connection, and communication, and 
commerce.
    These services also provide users with access to a range of 
news content across multiple devices and formats in a way that 
enables participation which surveys tell us increase civic 
engagement and interest in news producers content. News 
producers, in turn, receive 10 billion viewers a month from 
digital services, traffic which they can monetize with digital 
tools.
    Many publishers have embraced the Internet using technology 
to better engage their audiences. Numerous digital native news 
outlets have appeared, and the Bureau of Labor Statistics 
estimates that 13,000 employees worked in these digitally 
enabled newsrooms in 2017.
    Digital services also enable and benefit advertisers. As 
the saying goes, an advertiser knows half his ad budget is 
wasted. He just doesn't know which half. With technology, 
advertisers can now figure out where their budget is best 
optimized and where their money actually is, in fact, wasted 
and direct funds accordingly. This is increasingly important 
for small firms who now have a global reach regardless of the 
size of a business.
    So how does antitrust law fit into this? U.S. antitrust law 
focuses on maximizing consumer welfare, enforcement, seeks 
lower prices, higher quality, more innovation. Separate policy 
goals are usually pursued elsewhere through legislative means, 
and this ensures consistent and apolitical application of the 
law.
    The law doesn't punish success. Instead, it applies 
additional obligations when successful firms possess market 
power in a defined market. But these markets aren't defined ad 
hoc by arbitrary line drawing. We use economics. We see if 
consumers respond to changes in prices given factors like 
competition and substitutes. Enforcers then assess whether a 
firm can unilaterally raise prices or decrease quality.
    I note that some digital firms are sometimes subjectively 
identified as, say, being in the search or social media market. 
But this is not necessarily a relevant market. Economic 
analysis would show us that news publishers and digital 
services fight fiercely for ad dollars. And, indeed, that is 
one reason why we are here today.
    This intense intermedium competition is generally healthy. 
And undermining it with antitrust exemptions is unlikely to 
achieve the goal we all share. If competitors collude, prices 
will be higher, quality will decrease, and innovation will 
slow.
    And the U.S. experience with antitrust exemptions for 
newspapers specifically is not encouraging. Before the 
Internet, when broadcast threatened newspapers, which led to 
the Newspaper Preservation Act of 1970, we tried this. And it 
is widely regarded as having been unsuccessful. Some argue the 
MPA actually fostered press monopolies.
    So in conclusion, let me remind us all that the Antitrust 
Modernization Commission of 2007 looked at many of these issues 
and considered them at length. They, as well as antitrust 
enforcers from both parties, have criticized antitrust 
exemptions.
    Now, that being said, we do share the objective of 
promoting diverse robust economically sustainable news 
production. Proposed alternatives, which are discussed in our 
testimony, include tax incentives and deductions, grants, new 
nonprofit categories. All of these options deserve 
consideration, and CCI welcomes the opportunity to participate 
in that conversation.
    Thank you.
    [The statement of Mr. Schruers follows:]

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    Mr. Cicilline. Thank you, Mr. Schruers.
    Mr. Pitofsky is recognized for 5 minutes.

                  TESTIMONY OF DAVID PITOFSKY

    Mr. Pitofsky. Chairman Cicilline, members of the 
subcommittee, thank you for inviting me to speak with you 
today.
    My name is David Pitofsky and I am the general counsel of 
News Corp, the proud home of news publishers like the Wall 
Street Journal and HarperCollins book publishers.
    I am here today because the marketplace for news is broken. 
Healthy markets incentivize risk, investment, and effort by 
rewarding companies that develop superior products. 
Unfortunately, in the news business, free writing by dominant 
online platforms, which aggregate and then re-serve our 
content, has led to the lion's share of online advertising 
dollars generated off the back of news going to the platforms.
    Many in Silicon Valley dismiss the press as old media 
failing to evolve in the face of online competition. But this 
is wrong. We are not losing business to an innovator who has 
found a better or more efficient way to report and investigate 
the news. We are losing business because the dominant platforms 
deploy our news content to target our audiences to then turn 
around and sell that audience to the same advertisers we are 
trying to serve.
    The erosion of advertising revenue undercuts our ability to 
invest in high quality journalism. Meanwhile, the platforms 
have little, if any, commitment to accuracy or reliability. For 
them, a news article is valuable if viral not if verified.
    To address these challenges, we need meaningful dialogue. 
It is, therefore, dispiriting when the platforms claim that 
their products only help consumers and publishers ignoring the 
mounting facts clearly showing the harms they have inflicted on 
the news industry. The fact is news publishers have been busy 
innovating online expanding our reach to digital audiences 
while the dominant platforms have benefited from our innovation 
and premium content.
    In part, this is made easier by the platform's control over 
the Internet ad tech space. They control the tech 
infrastructure, the data, and the tools used to sell and serve 
ads online. And at the same time, they also compete against 
news publishers for those same ad dollars.
    News publishers have no good options to respond to these 
challenges. Any publisher that tried to withhold its content 
from a platform as part of a negotiating strategy would starve 
itself of reader traffic. In contrast, losing one publisher 
would not harm the platforms at all since they would have ample 
alternative sources for news content.
    To escape this prisoner's dilemma, news organizations need 
to act collectively, but this is prohibited by antitrust law.
    So what is the solution? First, we need more dynamic and 
modernized antitrust enforcement. We are hopeful that 
reinvigorated antitrust is on the horizon. After a generation 
of obsession with price effects without adequate consideration 
of the other aspects of consumer and social welfare, including 
quality, innovation, and choice, some very recent encouraging 
signs of reexamination have occurred.
    Second, and in the meantime, news publishers need a 
fighting chance. The Journalism Competition and Preservation 
Act is well designed to help restore the proper balance between 
content generators and distributors on the Internet. This 
bipartisan legislation is narrowly tailored both in scope and 
duration.
    I would like to close by sharing a quote from my late 
father, Robert Pitofsky, who you mentioned earlier, Mr. 
Chairman. He was a giant in the antitrust law. In academia, in 
private practice, and in government where his service 
culminated in his term as chairman of the FTC from 1995 to 
2001. He recognized the need for antitrust regulators to give a 
higher degree of scrutiny to competition matters implicating 
1st Amendment concerns. Because of the implications for 
Democratic values.
    In a November 2000 newspaper article on the topic, he was 
quoted as saying, Antitrust is more than economics. And I do 
believe that if you have issues in the newspaper business, in 
book publishing, news generally, entertainment, I think you 
want to be more careful and thorough in your investigation than 
if the same problems arose in cosmetics or lumber or coal 
mining.
    In a Seminole Law Review article from 1979 that has been 
happily rediscovered, he wrote, quote, ``It is bad history, bad 
policy, and bad law to excluded certain political values in 
interpreting the antitrust laws,'' closed quote.
    Informed by history, policy, and the political values, the 
antitrust laws should protect the pillars both of our economy 
and our democracy. And there is no industry more central to our 
democracy than the news media.
    Thank you.
    [The statement of Mr. Pitofsky follows:]

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    Mr. Cicilline. Thank you, Mr. Pitofsky.
    Mr. Riley is recognized for 5 minutes for his opening 
statement.

                    TESTIMONY OF KEVIN RILEY

    Mr. Riley. Chairman Cicilline and members of the 
subcommittee, thank you for inviting me here today. I am Kevin 
Riley, the editor of the Atlanta Journal Constitution.
    A few years ago, journalists at the Atlanta journal 
Constitution established that 80 doctors in Georgia had 
sexually abused patients, including patients under anesthesia, 
and those doctors were still licensed. The newspaper 
investigated and found a nationwide problem. Hundreds of 
doctors were abusing patients and getting away with it.
    The investigation prompted reforms. It was a finalist for 
the Pulitzer Prize. And of equal importance, readers of that 
investigation told us that is what they want from their 
newspaper, that kind of coverage. The victims of those doctors 
called our reporters and thanked them for telling their 
stories.
    About a year before that story, dozens of educators in the 
Atlanta public schools had been found guilty of altering 
students standardized test scores in the largest cheating 
scandal in the Nation's history. The convictions culminated a 
year's long journalistic effort by the Atlanta Journal 
Constitution.
    AJC reporters had noticed that student scores on Georgia's 
standardized tests showed extraordinary improvement. They 
analyzed the scores. The improvements in some schools defied 
statistical possibility. The reporting triggered a State 
investigation that found systemwide cheating in 44 Atlanta 
public schools; 178 teachers and administrators participated. 
The test cheating inflated the scores of thousands of students 
giving the false impression of progress. It cheated those 
students.
    The story would never have been uncovered without the AJC. 
Educators would never have faced justice. The system would not 
have been fixed. And most important of all, students wouldn't 
have been offered the chance to gain the knowledge that they 
had been denied.
    No other news organization in Atlanta has the capacity for 
such deep reporting. No other organization could have withstood 
the relentless pressure to back off unleashed by the school 
district and the business community. No other news organization 
would have stuck with the story for 5 years.
    This kind of investigative reporting is hard. It is 
upsetting. It is important. It has real impact. And we are 
proud of it.
    But newspapers do other important stories too. I was 
reminded of one last week as I prepared for this testimony.
    Let me tell you about the woman Congressman Collins 
mentioned. Her name is Shirley Sessions. She is the widow of a 
World War II veteran they lived in Carrollton, Georgia. She had 
spent decades trying to unearth the story behind her reticent 
husband's service. I had been able myself to discover many 
details about our husband's time in combat, and I had written 
about it.
    After her husband died, Ms. Sessions still hungered to know 
about his service. She was so enthralled that she journeyed to 
France for a reunion of her husband's military unit. I joined 
her. Bearing witness while a widow paid an inspiring tribute to 
her husband.
    And the story I wrote about brought AJC readers along on 
her emotional journey. She literally retraced the steps of that 
young private, the man who would later be her husband, through 
combat in tiny French towns during World War II.
    It was the unknown story of a local hero and one that only 
the Atlanta Journal Constitution could tell. It would be lost 
to history without us.
    Ms. Sessions sent me a text as I prepared for this 
testimony. She said, in part, Your stories have become a 
touchstone in my life. I watched the coverage of D-Day, cried a 
lot. But I am more grateful than ever.
    We invested a lot of time, money, and effort in these 
stories I mentioned. That is what newspapers do. We use our 
resources to tell our community stories, the good ones and the 
hard ones. Telling them makes our community better.
    I share these examples because they illustrate the everyday 
challenge faced by local journalists. We must be vigilant to 
tell important, well-reported, and thoughtful stories. We must 
care that they get wide distribution. That is our job and 
crucial to our communities. We are accountable to people like 
Ms. Shirley and her neighbors in Carrollton, Georgia.
    Almost always, the debate about media and tech is framed 
within the discussion of international news brands. But the 
greatest peril for our Nation lurks at the local level where a 
regional or community newspaper must cope with fast-changing, 
technological, and financial matters.
    We are the ones who are concerned with our communities, 
their government, and their well-being. Our staffs live in our 
community. They have a big stake in informing the public. 
Social media and technology companies have enormous influence 
on the distribution and availability of news. But we should be 
worried about losing newspapers. The fountainheads within the 
local news ecosystem. It is worth considering stories that 
would go untold.
    Thank you.
    [The statement of Mr. Riley follows:]

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    Mr. Cicilline. Thank you, Mr. Riley.
    We will now proceed under the 5-minute rule with questions. 
And we will begin with the gentleman from Georgia, Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman. And thank you, 
witnesses, for being here today. And I would like to extend a 
particularly warm welcome to the editor of my hometown paper, 
Mr. Riley, from the AJC.
    The purpose of this hearing is to face an important problem 
head on, the media, from local newspapers to major publishers 
to online innovators is dying. This is, in some part, because 
of a shift in how we consume our news, but it is also because 
of the mass availability of information on digital platforms.
    While the news media's market presence is increasing, their 
revenue is decreasing. This is untenable. No business can 
prosper this way and no reasonable investor would want to get 
involved. We cannot continue to rely on the good grace of 
concentrated wealth to do the right thing.
    A free market approach as applied to the duopolistic online 
platform gateway and its relationship to a free and diverse 
press is not working. Moreover, it poses a direct and pressing 
threat to our republic and, therefore, to our freedom. 
Something must be done to level the playing field, and I am 
looking forward to talking with all of you about potential 
solutions to this problem. And I thank the chair for hosting 
this very important hearing.
    Lastly, I will note that a free press--or that free press 
content has a cost, and that price is profoundly expensive and 
could price freedom out of the fragile marketplace for freedom.
    Mr. Riley, according to a recent Pew study, Americans have 
shifted from traditional media sources for local news to the 
television and Internet. Interest in local print news in 
particular has declined resulting in massive downsizing at 
newspapers. In fact, newsroom staff declined by 45 percent from 
2008 to 2017.
    How has the AJC worked to overcome this challenge?
    Mr. Riley. Well, thank you for that question, Congressman 
Johnson. And I think that one important point to make about the 
statistics that you cite in terms of preference of news sources 
is this: We are typical, I think, of most newspapers of our 
size and in a market similar to ours in this way, our audience 
has never been larger than it is now. When you can combine the 
people we have who read the printed newspaper and that audience 
that we can garner online in our markets, we have more people 
reading the Atlanta Journal Constitution than at any other 
point in our history.
    The challenge here is sort of simple, which is in what kind 
of world do you grow your audience, reach a bigger market, and 
somehow face even greater financial challenges than you did 
before? Something is out of whack in that equation, and it is 
just counterintuitive to how American business works where, 
when you invest and you succeed, you reap the benefits of that 
investment. That is the missing piece for newspapers.
    Mr. Johnson. Thank you.
    What are your projections for the AJC? And how has your 
digital platform presence--well, you have explained that. Let 
me move to my next question.
    Mr. Chavern, how many local papers does your organization 
represent?
    Mr. Chavern. Approximately 2,000, sir.
    Mr. Johnson. Is there any requirement that local newspapers 
be prioritized on general--on digital platforms?
    Mr. Chavern. Prioritized in terms of the search, sir?
    Mr. Johnson. Yes. In any respect.
    Mr. Chavern. Yeah. They are--there is no requirement that 
they be prioritized. But the digital audience, as was noted, is 
exploding across the board.
    Mr. Johnson. Mr. Pitofsky, one of the major issues in 
market dominance today is the ability to use individual's data 
in targeted advertising.
    How do you--how do the online giants control user data? And 
why is this such a powerful phenomenon?
    Mr. Pitofsky. Thank you, Congressman.
    Advertising has changed profoundly so that rather than 
reaching an audience, advertisers now reach individuals. And to 
the degree that they are able to get more and more detailed 
data about those individuals, they can send them targeted data.
    So the more data a company has, the more it can segment the 
market, the more it can deliver targeted ads. And the dominant 
platforms are light years ahead of other competitors in terms 
of the amount of their data, thus their dominance in the 
digital ad space.
    Mr. Johnson. Thank you.
    I yield back.
    Mr. Cicilline. I thank the gentleman.
    The chair now recognizes the ranking member of the full 
committee, Mr. Collins, for 5 minutes.
    Mr. Collins. Thank you, Mr. Chairman.
    Mr. Chavern, one of the interesting things--that I have 
been asked this question a good deal since we actually 
introduced it. And I think it is--but I think it is vitally 
important, because sometimes we can put things out there. But 
at the end of the day, if it is not actually a workable 
solution, then, simply, we are just talking about things and, 
you know, generating a lot of, you know, basically hype that 
doesn't actually end up in solving something. I am not a member 
of Congress who believes that we ought to just, you know, 
simply throw ideas out there but actually find ideas that can 
actually work.
    So the question that has come up a great deal about that is 
how can we be sure that any agreement that the news 
publications negotiate with the online platforms under what we 
are proposing in this legislation will be adequate and flexible 
enough to endure for a long time in this quickly evolving 
market. I believe it is more than just right this minute. How 
does it play out 10, 15 years down the road?
    Mr. Chavern. Well, thank you, Representative.
    Obviously there is never going to be guarantees about 
infinite solutions. But I think what there is a real chance for 
us to develop an enduring partnership with the platforms.
    Again, at the end of the day, the platforms, I view them as 
a solution, a potential solution for news and journalism rather 
than a problem. And I think the issues are well understood and 
pretty well defined. We have issues about revenue. We have 
issues about data. We have issues about algorithms and our 
brand.
    But these are all things that I think are solvable, 
achievable. And that I am confident that we could develop a 
solution that would greatly support journalism for some 
significant period of time. I don't think this is one of those 
issues that is not solvable. I think it is imminently solvable.
    Mr. Collins. Would you also agree that this is an issue 
that both parties, really, in a lot of ways need each other? 
That this is not really one upset at the other and the other 
upset at--you know, that there is not mutually exclusive 
positions here. That the online platforms need the local 
content spoken of by others and at the same point in time they 
all wind in the local and also need, you know, to have this, 
you know, divergent technology, disruptive technology that has 
been good in many, many ways.
    Do you see that as a symbiotic kind of relationship that 
should be instead of an adversarial relationship?
    Mr. Chavern. Yeah. Absolutely. I mean, these are amazing 
wonderful distribution platforms that, by the way, have allowed 
us to grow our digital audience larger than it has ever been in 
terms of any audience. And they need good content to engage 
their users, and we need access to those users. It is just in 
this world where we can't act collectively. That means that we 
have this problem of any one publisher really doesn't get a say 
in how its content is distributed to those users.
    Mr. Collins. One of the things that we came up with last 
year in this committee worked, and my friend Hakeem Jeffries 
and I worked this for a long time, and that was the Music 
Modernization Act, which actually had a very similar kind of 
issue where you had the content owner and the disruptive 
technology, which has been great for many segments, but there 
was a disconnect of many of our rules and many other things 
going forward where the content--and I think this is something 
that I have emphasized in this committee for years is that 
spark, that original idea, that content which both tech 
platforms have and also the local platforms do as well, is 
something worth protecting.
    You can't sort of kill the goose with the golden egg. You 
can't go and say the one producing the content is bad and we're 
just going to keep taking, keep taking, keep taking, because 
one of these days they are not going to exist anymore.
    My hometown paper that I have grown up with for years, it 
was a 7-day-a-week paper. It had--you know, just 20 years ago, 
had, you know, 25-, 30,000 on it. It is down to now only a 5-
day-a-week paper. It could possibly, unfortunately, may go 
further.
    Most of the district--my district is a one paper per 
county. But yet, at the same time, we do have Internet. We do 
have broadband issues. That is because of a very terrible 
carrier. But there are some other issues that we have there.
    But as we look at that, you know, we need to make sure that 
both are involved in this. And I think that is the concern that 
I have.
    I think as we go further in this process, knowing that 
there is the online capability, knowing what we have heard so 
far in this, this--I want this to be understood. And, 
unfortunately, I have had to do a lot of interviews where it 
came at me as if this was an adversarial--these whole hearings 
are adversarial. Not really. They are just simply saying from 
my perspective what do we need to do in a perspective now.
    I appreciate all the witnesses here giving this directive, 
because when we engage, people win. When we start talking about 
this, we win. And I think that is the biggest win that we have 
going forward here.
    With that, Mr. Chairman, again, thanks for this and thanks 
for the partnership on this bill. And let's look forward to 
continuing to work together.
    I yield back.
    Mr. Cicilline. I thank the gentleman for yielding back.
    I now recognize the gentlelady from Washington, Ms. 
Jayapal, for 5 minutes.
    Ms. Jayapal. Thank you, Mr. Chairman. And thank you all for 
being here.
    I represent a district that includes Seattle. And, you 
know, we used to have a number of papers in Seattle. We are 
down to one now. And so--and I am also somebody who read the 
morning paper, like the actual paper for a very long time.
    But digital technology is amazing. And I am continually 
astounded by the proliferation of information that feels like 
it is at our fingertips. I have watched my child grow up 
immersed in the digital world. They know no other world. And 
they have access to a breadth of information that I think could 
never have been imagined several decades ago.
    My district is a hub of innovation. We have a lot of the 
tech companies right there in the district. And there are these 
exciting new ways that I think we are finding to use technology 
and share information.
    However, I will tell you that many of my constituents who 
work for those very tech companies want us to make sure that we 
are utilizing that technology with appropriate regulations.
    A very small number of companies exert a great deal of 
control over what news and information each of us sees when we 
go online or we use our phones. And those companies do have 
sophisticated systems that track what we do, where we are 
located, what we are interested in. It never ceases to amaze me 
if I go to a shopping site and I plug in something, and then 
the very next day I have five of that same thing constantly 
coming back at me to see if I will buy it.
    So we know that our information is being monetized, that 
these companies are selling access to our attention to 
advertisers and using their own proprietary algorithms to 
determine what information and articles we see and what we 
don't see. And it is easy to forget that when we do a very 
quick Google search for news about a particular topic or we 
click on an article and our Facebook feeds. It is easy to 
forget that when we go online or into our phones looking for 
good information, we are actually being controlled by those 
corporations and the algorithms that are being used.
    So, Ms. Hubbard, let me start with you. You were an 
assistant attorney general for New York State's antitrust 
division. You have also worked as a journalist.
    Which online platforms would you say are most impacting the 
public's access to trustworthy sources of journalism and why?
    Ms. Hubbard. Thank you for the question, Congresswoman.
    I think in terms of disinformation, the platforms are 
having the most impact are Facebook and YouTube. And that is 
because of their business models which are to prioritize 
engagement, engaging content because of the human nature that, 
you know, survival instinct. We tend to tune in to things that 
much us fearful or angry.
    And so by prioritizing engagement, these platforms are 
actually prioritizing disinformation as well. It serves their 
profit motives to keep people on the platforms as long as 
possible to show them ads and collect their data. And because 
they don't have any competition, they are free to pursue these 
destructive business models without having any competitive 
constraint. They have also lacked regulation. Normally, 
corporations are not permitted to just pursue profits without 
regard to the consequences.
    Ms. Jayapal. So let's go to that question of regulation. 
The Federal Trade Commission has repeatedly declined to 
interfere as Facebook and Google have acquired would-be 
competitors.
    Since 2007, Google has acquired Acquired Semantics, Double 
Click, and AdMob. And since 2011, Facebook has acquired 
Instagram and WhatsApp.
    What do these acquisitions mean for consumers of news and 
information? I think sometimes antitrust is seen, and In 
regulation is seen as something that is out there. But this has 
very direct impact for consumers.
    Can you explain what that means as these companies have 
acquired more and more?
    Ms. Hubbard. Sure.
    So in my view, those--all of the acquisitions that you just 
mentioned were illegal under the Clayton Act which prohibits 
mergers that may lessen competition.
    Looking back, it is clear that all of those mergers did 
lessen competition. And when you lessen competition, the harms 
to consumers are not just high prices, which are harder to see 
in the digital age. But it is loss of innovation. It is loss of 
choice and loss of control.
    So when we approve antitrust mergers, consumers are harmed.
    Ms. Jayapal. And do you think that the FTC--what do you 
think about the FTC's current work around these? Do you think 
the FTC should be doing more and how?
    Ms. Hubbard. I definitely think the FTC should be doing 
more. I think there is a possibility of unwinding some of the 
mergers that are now obviously illegal now that we have the 
evidence, particularly Facebook's acquisition of WhatsApp. 
There have been public documents showing that Facebook had 
identified WhatsApp as a competitive threat using its VPN 
technology. And that it also deceived the European commission 
and likely--I don't know if it told anything different to U.S. 
regulators, but it has been fined for deceiving the European 
Commission saying it couldn't share data from what--between 
WhatsApp and Facebook.
    So I do think that the FTC needs to do much more in this 
regard.
    Ms. Jayapal. Thank you.
    I see my time has expired.
    I yield back.
    Mr. Cicilline. I thank the gentlelady.
    I now recognize the gentleman from North Dakota, Mr. 
Armstrong, for 5 minutes.
    Mr. Armstrong. Thank you, Mr. Chair. And I especially 
appreciate Mr. Riley talking about small town papers, because 
if large publishers are having this problem, you can about 
imagine how adversely affected smaller publishers that do 
business in North Dakota are by this issue.
    And my first grown-up job was coaching our summer American 
Legion baseball team. And I learned two things very early in 
life when dealing with the press and dealing with the kids of 
parents. One, you never get in trouble for what you don't say. 
And, two, you should always criticize in private and praise in 
public. So I have carried those with me for a long time, and so 
I appreciate that.
    But just earlier we had heard--so Mr. Chavern and Mr. 
Pitofsky and Mr. Kimmelman talked about antitrust. And so we 
assume that we know there is--that there exists a competition 
problem in the market. But we already have longstanding remedy, 
and that is antitrust enforcement, if necessary. And I think 
there might be a little disagreement about whether that is 
actually sufficient. So supporters of this bill will argue that 
we need an exemption from antitrust laws which allows them to 
come together to negotiate terms.
    Why should we enact the Journalist Completion Act as 
opposed to just enforcing antitrust law? And I will just start 
with Mr. Chavern.
    Mr. Chavern. Thank you very much.
    You know, the current antitrust laws protect Google and 
Facebook from us, interestingly, which is both wrong and ironic 
from our perspective.
    What we are suggesting is, really, what we view as the 
lightest touch option on the table in terms of giving us the 
power just to stand up for ourselves.
    And also, I have to note, there is a real urgency in the 
industry currently. This is an industry that really can't wait 
years and years for antitrust solutions. We are at a crisis 
point now. And what we are asking for is relatively simple, 
relatively straightforward. We are not asking the government to 
regulate anyone or tax anyone. We are just really asking to be 
left alone to defend ourselves.
    Mr. Armstrong. Thank you.
    Mr. Kimmelman.
    Mr. Kimmelman. So I do think antitrust can help. I think we 
have had a lapse in antitrust. Ms. Hubbard referred to it. I 
don't know about the specific cases. It is always easier in 
hindsight to say something was anticompetitive. Hard to tell at 
the time. But there is no doubt that we have had 
underenforcement and we need stronger enforcement.
    I do not believe it solves this problem. It certainly 
doesn't solve an immediate crisis. But I do worry that you 
should look very carefully at whether the kind of negotiation 
that Mr. Collins was talking about and the way it would happen 
is what would actually happen in the marketplace. I am not at 
all sure that is how it would work. I am not at all sure who is 
a news content creator. You have wonderful news creators here 
in front of you today. There are tabloids. There are a lot of 
purveyors of mis--there are a lot of bad people out there too.
    So I just think this is very complicated. You ought to take 
a very careful look at what would actually create a better 
marketplace dynamic. I actually believe there are better ways 
to do this, but it requires a different approach.
    Mr. Armstrong. And Mr. Pitofsky.
    Mr. Pitofsky. Yes. I would say that antitrust has been 
interpreted relatively narrowly for the last 40 years. And 
these markets are presenting new challenges, that it is going 
to take time. And this committee's investigation is helping 
move in that direction of understanding how these new markets 
work.
    So, for example, when some of these mergers were approved, 
some of the people objecting raised privacy concerns. But the 
regulators felt that privacy was not an area that antitrust 
could cover.
    I think as we have had experience with these platforms, we 
understand that privacy is an aspect of product quality. All of 
the users of these tools have expectations that those tools 
carry privacy that is in their interest. And antitrust just 
hasn't really stretched its muscles in a long time to 
understand those kinds of quality issues. And it is going to 
take a while. The facts are complicated. The law is 
complicated. Judicial precedence need reexamination. And so the 
bill is a good short-term remedy while the larger issues are 
tackled.
    Mr. Armstrong. Ms. Hubbard, do you want to talk?
    Ms. Hubbard. I agree with Mr. Pitofsky. I caution what--I 
worry about what Mr. Kimmelman is saying, that sometimes when 
we say things are too complicated, it is a way of not doing 
anything. And that is what we have been saying in this space 
for a long time where we have seen regulators around the world 
and enforcers around the world address this problem.
    And we have just been sitting back worrying it is too 
complicated. And I think it is important to take action quickly 
and not keep kind of viewing complication as a reason to do 
nothing.
    Mr. Armstrong. And I agree with that. I don't think too 
complicated is ever an answer. But I would also say, and this 
is not an apples-to-apples comparison. But we are going to get 
to watch this play out a little bit, because the EEU just 
adopted really strict Internet rules. And one of the goals was 
to increase and remove barriers entry.
    But by holding the platforms themselves liable for 
copyright violations, they may have--the cure may actually be 
worse for them than the disease. And time will tell. But 
automatic filter programs and scrubber programs that--such as 
YouTube uses, because you mentioned YouTube earlier, are 
incredibly expensive to run. And so--and plus--I mean, least in 
the EEU, it is not quite the same.
    And I am sorry for going over.
    Mr. Cicilline. That is okay.
    Mr. Armstrong. I didn't do an opening statement.
    Mr. Cicilline. I am not trying to gavel you down yet.
    Mr. Armstrong. But, I mean, while they pass the rules, each 
member country is going to have promulgate their own laws in 
association with those rules which can cause all kinds of 
problems in that companies are going to have to operate in that 
patchwork of different laws or just follow the most strict laws 
of any of those countries. Or probably the worst-case scenario 
is not do business in some of those countries.
    So when you come from a small State and knowing that States 
like California and New York will dictate a marketplace, you 
always get concerned about that.
    So I agree with you. But we are going to get to watch it.
    Ms. Hubbard. Can I respond really quickly that we do have a 
tool that we have had for a very long time, which is the 
antitrust laws. So before you were looking at kind of different 
solutions that Europe is pursuing, we used the antitrust laws 
against Microsoft, it led to innovation. Many people say if it 
weren't for our antitrust enforcement against Microsoft, Google 
would never actually have been able to come onto the scene.
    So it is not actually a novel problem or novel tool, so we 
have these tools.
    Mr. Armstrong. No. And I agree, which is why I asked the 
antitrust question to start the questioning process.
    Sorry about that.
    Mr. Cicilline. No. No.
    I now recognize the gentlelady from Florida, Mrs. Demings, 
for 5 minutes.
    Mrs. Demings. Thank you so much, Mr. Chairman, and thank 
you to all of us--all of you for being here with us today.
    Mr. Chavern, we talked about many newspaper publishers have 
seen significant growth in digital subscriptions, but yet they 
continue to struggle, and many have shut down which is truly 
unfortunate. Would you please talk a little bit about why the 
news industry continues to struggle despite the increase in 
online readership and digital subscriptions?
    Mr. Chavern. Certainly. Thank you. Again, the audience--our 
audiences both growing and moving very quickly to online 
spaces, and those spaces are dominated by just a few companies 
that take the vast bulk of the advertising revenue, determine 
everything about the experience you get with your news 
publisher.
    Again, I call them our regulators because they get to 
decide what news is delivered to who and when. How the news is 
delivered to me is different than the news delivered to you, 
and whether we can monetize it and on what terms.
    Mrs. Demings. I think it is so important for everyone to 
hear your words on that topic. Please go ahead.
    Mr. Chavern. They are incredible and powerful advertising 
engines that do great targeted advertising often around our 
content, and they take the bulk of the digital advertising 
revenue. So, really, the rules of the game for online 
engagement of news are set up against content creators, 
publishers, and--but again, one of the things we do know is 
that people love news. The audience is bigger than ever. It 
drives a lot of engagement, and certainly the platforms know 
this.
    Mrs. Demings. Interesting what we define as news these 
days, but please go ahead.
    Mr. Chavern. The platforms know this. They know that people 
go online to consume that product, and then they get to make 
money monetizing them to our detriment.
    Mrs. Demings. Thank you.
    Ms. Hubbard, some researchers have estimated that for every 
dollar an advertiser spends on digital ads, only $0.30 go to 
the publisher meaning that ad tech mediaries could be capturing 
around 70 percent of all digital ad spending. What, if 
anything, does the 70 percent figure tell us about the market? 
I would love to hear from you about that.
    Ms. Hubbard. Yeah. As an enforcer, I would say--as a former 
enforcer, I would say that 70 percent cut shows that there is 
extraction that is happening, and it is not--there is not fair 
bargaining power between the press and the tech platforms 
because that is not, you know, a fair price. It is a monopoly 
rent, really.
    Mrs. Demings. And why is the fair bargaining power so 
important to this industry and to the consumers?
    Ms. Hubbard. Right. So as I said, you know, throughout the 
economy, when you don't have--when you have such concentrated 
markets, there is a lack of bargaining power. That means that 
everyone else has to play by the terms of the dominant 
companies, and we are talking about the press here which is so 
critical to our democracy. We do not want them playing by the 
terms of dominant companies. It is, you know, critical that 
they have bargaining power and can have a fair deal with 
getting this important content to the world.
    Mrs. Demings. And finally, Mr. Riley. You know, the 20-
second sound bites are fine, and being able to click on a lot 
of different things which many times, they really don't have 
the same effect as a headline does, but there is just something 
about reading the newspaper. I believe you get not half of the 
story, you get more of the whole story. And I heard an editor 
say once and the other big benefit is that you may bump into 
another story that you had no intentions on reading. I think an 
informed America is a better equipped and a smarter America.
    Could you tell me what is lost when a local or regional 
newspaper goes out of business, and what effect does that have 
on the local community? You have shared two very powerful 
stories with us today, but when a newspaper goes out of 
business, what is that effect on a local community?
    Mr. Riley. Well, let me try to explain it this way. You 
know, there were several references to the engagement of 
citizens and voting and that sort of thing, but let me give a 
real world Georgia example, you know. We cover the State. We 
have a big group of reporters who cover the State legislature 
in Georgia when it is in session. And I try to go down there 
each year and spend a day with our reporters and editors who do 
that so that, you know, I can meet the legislators and really 
get a good idea of the work.
    Well, I have been down there, and sometimes it feels like 
we--our reporters are the only ones there, and what is happened 
is it has gotten too expensive to send reporters from Macon or 
Valdosta or Columbus, Georgia. And what kind--that is not good. 
That is not good for our democracy. That is not good for 
Georgia. That is not good for any of those communities because 
of what is happening in the industry. And I'll be honest you 
with you. It is not good for us because the competition, we 
like to see them around, and it would make us better, and we 
would all be better. The state would be better, and all those 
local communities would be better. And that is a kind of real 
world example. And all of this discussion about these 
complicated issues, that's how it really plays out.
    Mrs. Demings. Thank you so much. I am out of time.
    Mr. Chair, I yield back.
    Mr. Cicilline. I thank the gentlelady.
    I would just advise the witnesses on the panel they have 
called votes. We only have two. So we are going to have Mr. 
Gaetz, the gentleman from Florida, do his questioning and then 
we'll briefly adjourn, go vote quickly and come right back, and 
I apologize for the inconvenience. Mr. Gaetz is recognized for 
5 minutes.
    Mr. Gaetz. Thank you, Mr. Chairman. And I believe that we 
are presented with an historic opportunity here where right 
wing populists and left wing populists have joined together 
under Chairman Cicilline's leadership to attempt to change the 
way consumers interface with major technology platforms. In a 
committee that so often sees division, it is nice to be working 
towards such an important goal, and it truly is historic that 
we are working together.
    Mr. Chairman, it seems as though there are three ways that 
the consumer experience can be altered. Initially, technology 
companies can voluntarily choose to be more transparent with 
consumers about their data and information, and they could 
choose to act in better faith with partners in the news 
industry.
    The second way is that through investigations and hearings 
like this, we would be able to animate the Department of 
Justice to engage in a more rigorous enforcement of existing 
antitrust laws.
    And then the third option would be a legislative option. So 
obviously someone's voluntary action is self-evident, but Mr. 
Pitofsky, if our goal here were the second of sort of the three 
legs of the stool I outlined, to animate the Department of 
Justice in their antitrust enforcement, what specific guidance 
would you give in that light?
    Mr. Pitofsky. I think that the committee's goal of 
investigating is a very good first step. There is a lot of 
opacity in these markets. There is a lot that is not understood 
about fees that are taken out through the ad tech stack, about 
how the algorithms work, about how they are structured, if they 
are, in fact, structured to benefit consumers as the platforms 
say, or if they are structured with the intent of blocking 
competition. So I think the most important first step is for 
the committee to really dig into the facts and bring some 
transparency.
    Mr. Gaetz. That transparency objective is a virtuous one, 
one that I believe in. What specific types of allegations would 
you want the Department of Justice to lay out to achieve that 
outcome?
    Mr. Pitofsky. Well, to coin a phrase, I think I would 
follow the money at this point. The engine of these platforms 
is the advertising that they sell, and the amount, the paucity 
of competition, the fact that they are able to extract so much 
from that ad tech stack suggests something fundamentally broken 
in the lack of competition in those markets which are the key 
profit generators of the business, so I think I would go with 
the ad tech first.
    Mr. Gaetz. That is very helpful.
    Mr. Chavern, I am going to ask you about the third leg of 
the stool, the legislative options that we have available to 
us. And I know we can enforce our antitrust statutes, but 
another element of the Communication Decency Act applies to 
major technology platforms and doesn't apply to the people you 
represent, Section 230.
    Section 230, as I understand it, and I am happy to be 
corrected by others, would say that if a technology platform is 
a neutral public platform that they enjoy certain liability 
protections that newspapers don't enjoy, that Newscorp doesn't 
enjoy with its assets. And so does it make the anticompetitive 
posture of technology platforms more pronounced that they have 
access to this special liability protection that the people you 
represent don't have access to?
    Mr. Chavern. Absolutely. There is a huge disparity, 
frankly, when our content's delivered through these platforms. 
We get the liability, and they get the money, so that is a good 
deal from that end. You know, we are responsible for what we 
publish. Publishers can and do get sued. On the other hand, the 
platforms are allowed to deliver and monetize this content with 
complete lack of responsibility. I think that is a disparity 
that will have to be addressed. I think Section 230 had a 
reason, a raison d'etre at the beginning. I think--particularly 
with regard to the massive platforms, I think it is time to 
relook at that.
    Mr. Gaetz. Thank you.
    And Mr. Chairman, that is very instructive testimony, I 
think, because as we look at the ways to rebalance the scale, 
there is legislation that you have introduced with Mr. Collins 
to give the people before us the ability to band together in 
that negotiating practice.
    But I hope we wouldn't exclude from our gaze the other 
statutory advantages that are baked into these business models 
that, as Mr. Chavern says, shift liability to one particular 
segment of the industry while at the same time giving others 
liability protection in absence of the transparency that Mr. 
Pitofsky noted that would demonstrate that they are worthy of 
that liability protection.
    And so I am not--I agree with Mr. Chavern that I am sure 
there was a virtuous reason for Section 230. There is likely an 
incarnation of Section 230 that would fulfill that initial 
obligation. But in the absence of the transparency that 
requires these platforms to show that they are a neutral 
platform, that they are not putting their thumb on the scale 
either in the way they operate their business or in the way 
they can control content, I just think that is an important 
part of the legislative function.
    And I would finally add I am grateful that the President 
has tried to enhance the voluntary actions of some technology 
platforms by pointing out where he sees bias in that. And so 
again, among those three things, I look forward to our great 
work, and I yield back to the chairman.
    Mr. Cicilline. You are doing very well with that final 
comment, Mr. Gaetz. No. You are absolutely right, and I want to 
assure you that this investigation is intended to look at a 
broad range of practices on these platforms and a broad range 
of remedies, so I look forward to working with you on that as 
well.
    And we will just stand in recess very briefly.
    [Recess.]
    Mr. Cicilline. The meeting will come to order. I now 
recognize the gentlelady from Georgia, Mrs. McBath, for 5 
minutes.
    Mrs. McBath. Thank you so much, Mr. Chairman. I would like 
to say to everyone that is here testifying today, thank you so 
much. We really appreciate you being here. And because I do 
represent Georgia's 6th Congressional District, I would like to 
give a warm welcome, a special thank you to a fellow Georgian, 
Mr. Riley.
    Mr. Riley, your written testimony examines the decline in 
competition in the Georgia press. What has that meant for the 
information that Georgians are going to receive, Georgian 
citizens, about their government at all levels?
    Mr. Riley. Thank you for the question, Congresswoman. And 
in a way, I guess you could probably answer it after that 
spirited campaign in the 6th District. I think it was clear 
that, you know, the Atlanta Journal Constitution--we devoted an 
awful lot of our folks to covering that.
    And I mention that because, see, I think that is what can 
be lost, you know, crucial elections where other news 
organizations may not be in a position in different parts of 
Georgia to exhaustively cover a campaign, to vet the 
candidates, to deal with the controversies, to sort through 
potentially misleading television ads, that sort of thing.
    And I also think that it creates a situation where we are 
not competing with each other as news organizations as much. 
And as has been acknowledged, I mean, everyone is better off 
with true competition, and I mention that as well because that 
is what has made the American press such a powerful part of our 
democracy for our country's existence. We have always had a 
healthy, vibrant press, and I think that we can point to that 
and recognize it is part of the reason our country has enjoyed 
so much success.
    Mrs. McBath. Thank you. So, Mr. Riley, I heard from editors 
and journalists that they really value their brand reputation, 
and I understand a lot about brand, and that leaders can trust 
their content. And, of course, we all know that in our online 
world, misinformation is always a click away.
    What are some of the ways that online platforms could help 
the AJC maintain that relationship with its readers and help 
readers know that they are getting information from a reliable 
source?
    Mr. Riley. Well, I am going to offer you a brief answer to 
that and then suggest Mr. Chavern jump in because he has spent 
a lot of time on this issue. But one of the things that is 
important to us as a media organization is that it is clear 
when users of any service come to our content that it is clear 
to them that it is from the Atlanta Journal Constitution and 
all that that means to people in terms of its accuracy, its 
fairness, and how well presented that it is. And when it is 
confusing to anyone about the source of content, we do invite 
that idea of misinformation and people struggling to get to the 
truth.
    Mrs. McBath. Thank you.
    And would you like to add to that, please?
    Mr. Chavern. Sure. There has always been crazy conspiracy 
theories. They usually were delivered to us by a crazy uncle 
over the dining room table, and you knew that was different 
than what was in the newspaper and what was on TV. And the 
internet platforms, often these--all the indicators about brand 
are suppressed, and that is not only bad for my members and the 
publishing business because we are in the trust business. It is 
bad for the public because they lose signals about where 
information is coming from. So brand suppression is a serious 
issue that we--that does need to be addressed with the 
platforms.
    Mrs. McBath. Thank you.
    And Mr. Pitofsky, some have argued that reforms to preserve 
local journalism could have the effect of causing higher prices 
for advertisers, including small businesses. Do you buy that 
argument? Why or why not?
    Mr. Pitofsky. I don't buy that argument. I think the lack 
of competition in the ad tech space for digital advertising is 
raising prices for advertisers. And if there was more 
competition in the space, the various platforms competing with 
each other would need to give--offer better deals to one 
another.
    I don't know if you have seen--if you have it here that 
Uber and Lyft are constantly sending notifications to their 
riders of special deals, and that is healthy competition. That 
is them having to give better deals to their customers to get 
their business. I think that is what we would see if we 
introduced more competition into the ad tech space.
    Mrs. McBath. Thank you.
    And for any of you, are there reforms that could preserve 
and promote journalism, also ensuring that small businesses 
have access to affordable advertising, and any one of you I 
would love to hear from.
    Mr. Schruers. If I may, Congresswoman. So as my testimony 
notes, leaders in industry have already committed hundreds of 
millions of dollars to supporting advertising initiatives and 
provide tools that are currently allowing news publishers to 
monetize their content.
    The rate at which that revenue is usually split is 70/30. I 
know that was cited previously in the hearing, saying that news 
publishers are receiving 30 percent. The figure is right. Who 
is getting the amount is wrong. The split is traditionally 70 
percent going to the news publishers, and that is substantiated 
by a U.K. government report cited in my testimony as well as a 
number of other publicly available sources.
    All that being said, we recognize that more can be done to 
promote news journalism, and as our testimony suggests, there 
is a variety of sources, of solutions including tax treatment 
for incentives, deductions as well as non-profit status, and, 
of course, grants beyond what our industry has been providing 
to various programs for journalism promotion.
    Mrs. McBath. Thank you so much.
    I yield the balance of my time.
    Mr. Cicilline. I thank the gentlelady, and I recognize the 
gentleman from Colorado, Mr. Neguse.
    Mr. Neguse. Thank you, Mr. Chairman, and thank you for 
hosting this bipartisan hearing. I certainly appreciate the 
bipartisan nature of the questions and certainly appreciate the 
witnesses testifying today on such an important topic.
    A thriving and diverse press, as we all know, is the 
gateway for so many of our communities to learn about and 
participate in our political discourse. In a world in which 
three out of four Americans now access their news online 
through two platforms, multiple newspapers are being forced to 
merge or shut down. Local newspapers have seen the biggest 
negative impact as we have heard from many of our witnesses 
today. Since 2007, we have lost nearly 1800 newspapers, 500 
from rural communities. One of those was my State's very own 
Rocky Mountain News, Colorado's oldest newspaper, which closed 
down in 2009.
    And we also know from empirical studies that when 
communities are left with no local newspaper, there is a direct 
correlation to lack of communication and government 
accountability. So that is why again today's hearing is so 
important, and certainly the testimony and the questions that 
have been posed underscore that fact.
    Mr.--is it Sures?
    Mr. Schruers. Schruers thank you.
    Mr. Neguse. Mine is a tough one. It is Neguse.
    Mr. Schruers. I feel your pain.
    Mr. Neguse. Thank you for being here. I have a couple 
questions for you, sir.
    First, I want to talk about your comments regarding 
antitrust exemptions. I reviewed your testimony. My sense, 
based on your testimony, I will quote you, note a couple of 
things. You say attempts to exempt certain industries from 
complying with these antitrust protections have negatively 
affected consumers and the economy as a whole.
    You later talk about the fact that while you agree that 
there need to be potential solutions that antitrust exemptions 
have been proven to be, quote, an inadvisable solution to the 
business model challenges of these publishers.
    So I take it from your testimony, you are not a fan of 
antitrust exemptions. Am I safe in presuming that you would 
then agree also that the firms you represent, the companies you 
represent, that they are also are subject to the antitrust laws 
because obviously, a variety of them have made arguments in the 
past that they were not. Is that a fair----
    Mr. Schruers. The firms we represent are subject to 
antitrust enforcement just like any other that doesn't benefit 
from an exemption.
    Mr. Neguse. And I presume you would oppose any effort 
legislatively to try to draw up an exemption for those firms. 
Fair to say?
    Mr. Schruers. CCIA has never supported antitrust exemptions 
of any kind. In fact, we argued against them during the 
antitrust monetization commission that I cite in my testimony.
    Mr. Neguse. Thank you. The second point I would like to 
follow up on was regarding the ad revenue piece because I just 
want to clarify for my own understanding and the record, and I 
missed the exchange regarding the 70/30 split. My understanding 
from your testimony is the example they are citing relates to 
Google. Does that same ratio apply to the other companies, or 
is that----
    Mr. Schruers. Thank you for the question, Congressman. So 
Google has publicly stated that on a few occasions. The 
Cairncross report that I identify cites revenue splits between 
other major internet services that are at 70 and above, 
depending on the particular product that is being used by 
different platforms. And in some case, it is 85 or even 100 
percent of the revenue is retained by the news publisher, so it 
varies greatly by the platform.
    I know of no revenue split whereby the news publisher only 
receives 30 percent. I am not saying there aren't some, but 
these reports that are cited----
    Mr. Neguse. I have limited time, and I appreciate your 
answer. I would be interested, and perhaps we can follow up on 
this after the hearing, in getting a detailed breakdown of the 
revenue sharing across firms because I just--it is painting 
with a broad brush. Citing one single example I think is not 
advisable.
    The last piece. I would just--so on page 3 of your 
testimony, your written testimony, you talk about the benefits. 
The fact that social media platforms in particular have offered 
unique functionalities and features which have redefined user 
involvement. Quote, users may share and amplify the reach of 
news stories and help, quote, road test journalists' story 
ideas, and you talk about that in a favorable sense.
    The footnote--and I went up because I was struggling to 
understand who would promote this idea that road testing 
journalists' ideas or journalists' stories, I should say, is a 
good approach to journalism. You cite a study that was called 
The Future Newsroom, University of Melbourne, September 2017. 
It is on page 3, footnote 9.
    And in the parenthetical, you state this study essentially 
stands for the proposition noting publications use of Twitter 
to road test story ideas where high engagement was taken as a 
sign to publish a story.
    Mr. Schruers. Yes.
    Mr. Neguse. Do you know who commissioned the study?
    Mr. Schruers. I do not, no.
    Mr. Neguse. So I would encourage you to look it up--
Facebook commissioned the study. I Googled that and found on 
page 2 that it was commissioned, and I am not--I say that only 
because a lot of the discussion we have had in this committee 
over the course of the last several months, as you may well 
know, has been around election interference by a foreign 
adversary in 2016. And so much of that related to social media 
disinformation and precisely these types of actions where 
engagement on Twitter is used to proliferate or even propagate 
stories that happen to be false.
    And I guess what I would just--I would caution that I 
don't--I think there is reason to be concerned about this 
notion that road testing and using the engagement on Twitter as 
a sign as to whether or not the stories should be further 
published, that that is the true test of success or a barometer 
of success I just think is not a tenable position, in my view, 
and I am happy to give Mr. Riley and Mr. Pitofsky a chance to 
respond to that question.
    Mr. Cicilline. The time of the gentleman has expired, but 
the witnesses may answer the question.
    Mr. Riley. I am not familiar with the study, and I do know 
that a lot of times in some of the social media platforms, on 
the same story, people will experiment with different headlines 
or invite users to make suggestions. To me, that is sort of a 
tangent to the core thing that we really worry about with local 
journalism which is getting out there, finding out what is 
really going on, digging deep into it, and making sure we get 
it to an audience. But again, I am not familiar with the study.
    Mr. Pitofsky. I would just add that some of your earlier 
questions pointed out a factual dispute in the room which is 
the percentage of fees that goes to the publishers versus the 
platforms which is a critical fact. I would encourage the 
committee as part of its investigation to look there because it 
is a profound question, and there is a lot of disagreement. I 
think you are going to find the statistics are closer to the 
ones cited by the Congresswoman earlier in the proceedings.
    Mr. Cicilline. I thank the gentleman. I now recognize 
myself for 5 minutes.
    Mr. Schruers, I want to start with you. Google captures 88 
percent of the U.S. online search market, 94 percent of all 
searches on smartphones, 78 percent of the search ad tech 
market, and 59 percent of the third party display ad market. I 
take it you agree that these don't, at least on their face, 
appear to be competitive markets?
    Mr. Schruers. Which precise market are we talking about?
    Mr. Cicilline. Well, let's start with searches on 
smartphones, 94 percent of the market controlled by one 
platform. You would agree that is not competitive under any 
definition?
    Mr. Schruers. Well, I think I would say 94 percent of a 
relevant market would be something worthy of considering, but I 
think----
    Mr. Cicilline. The mobile search ad market is not a 
relevant market?
    Mr. Schruers. I think the relevant market in that case 
would be what economists would tell us compete with that. And I 
know that searching on my phone in the browser, I can also 
search on my phone by asking Siri. I can search talking to the 
digital assistant smart speaker in my room.
    There are a lot of places that users today can go to get 
answers that extend beyond the browser search experience, and 
these are increasingly pageless tools that don't require a 
search engine. And so, you know, I think economists might not 
agree that desktop search is a discrete market.
    Mr. Cicilline. I don't actually know any economist who 
doesn't agree that that is not a competitive market. I guess I 
am asking you. Do you agree that that is not a competitive 
market when it is operating at 94 percent of the market share?
    Mr. Schruers. I think 94 percent of the market share, of a 
market, of a relevant market is something worth consideration. 
I guess is question is whether that is a market.
    Mr. Cicilline. International competition authorities have 
found that Google has given preferential treatment to its own 
services in the online shopping and online search markets. Do 
you see or do you at least acknowledge a risk of self-
preferential treatment in the digital ad market?
    Mr. Schruers. So the--well, let me start by saying I think 
that is a reference to the European case, and obviously, 
European antitrust law is not the same as U.S. antitrust law, 
and as I understand it, is actually stricter on the question of 
self-preferencing.
    Mr. Cicilline. I am asking whether or not the kind of self-
preferential treatment, whether or not that, in fact, is--there 
is a risk of that in this market and whether there currently is 
any way for a publisher to identify this self-preferential 
treatment?
    Mr. Schruers. So I don't have sufficient information about 
the internal decision-making of any of our companies to speak 
to precisely that issue, but I would be concerned about a rule 
that says, for example, that the grocery store can't put its 
own grocery store brand products at eye level in the store 
because that is where they find more things----
    Mr. Cicilline. I don't think I was contemplating a rule 
that does that. It would be helpful, though, as this 
investigation is undertaken that we, at least, agree to a 
common set of facts. And we will discuss solutions later on in 
the process, but I think sort of the fact finding and evidence 
gathering is really important.
    You encouraged caution when enforcing antitrust against big 
tech platforms, but in many ways I think caution is what we 
have had for the last decade which I think has resulted in the 
emergence of advertising monopolies, and I think many of us 
think it is time to try something different, in any event.
    But Ms. Hubbard, I would ask you. The Press Gazette 
recently reported that a single algorithm change at Google 
resulted in Google directing traffic to the mail online that 
caused it to fall by 50 percent. Nick Thompson, the editor of 
Wire, shared that a single tweek by Facebook caused Facebook-
based traffic to Wire to drop by 90 percent.
    How does this power dynamic, the fact that a platform can 
effectively shut off a publisher's traffic, affect the 
independence of the press, and you know, the ability of people 
to access trustworthy and reliable news?
    Ms. Hubbard. Well, clearly it is a monopoly problem because 
no one company should have the ability to decide which 
publications can exist and which ones can't. And this ability 
to turn off basically the traffic to any publisher is hugely 
problematic from a democracy standpoint because it basically is 
a shield from criticism. There are a lot of people who are 
never--a lot of journalists are not even going to have the 
courage to speak out and criticize big tech in the first place 
knowing that this can be done.
    Mr. Cicilline. Thank you.
    Mr. Kimmelman, several media leading economists have 
commented that antitrust enforcers have been too permissive of 
mergers that involve a loss of competition among nascent rivals 
of potential competitors. For example, Dr. Carl Shapiro of the 
University of California Berkeley has noted that Google's 
acquisition of Double Click in 2007 and Facebook's acquisition 
of Instagram in 2012 are examples of mergers that involved the 
loss of competition.
    Do you agree? And if so how can merger enforcement be 
tightened to address these concerns? And also, you note in your 
written testimony that we can't rely on antitrust alone to 
adjust the problems of platform power, and I wonder if you 
would share what tools you think Congress has traditionally 
used to promote competition in communication markets and what 
we ought to be thinking about as we confront these challenges?
    Mr. Kimmelman. So Mr. Chairman, I do think that potential 
competition is an area of dramatic underenforcement. When I was 
at the Justice Department, we did raise concerns about 
Comcast's purchase of NBCU at the time and raised the question 
of impact on online video distribution. It was not the first 
time, but it was very seldom that that tool was used. I think 
antitrust enforcers need to use it much more aggressively.
    I think going back and looking at those transactions, there 
probably are some that ought to be reviewed now to determine 
whether they were rightly decided, whether there is a basis 
under antitrust law to revisit those, but potential competition 
is critical.
    And I would say most importantly in the marketplace of 
ideas where you have communication platforms that are the most 
critical way in which we get content for our news and 
information, we ought to be most careful to be promoting as 
many entrants, as much potential competition as possible.
    Mr. Cicilline. Thank you. I just want--excuse me.
    Mr. Chavern, I just have one final question. You know, I 
think you made reference to the increasing number of people 
that obtain their news from digital services. You know, 
participation by subscription, lots of interesting engagement 
in news, so a huge increase in consumer and in customer use of 
your product but declining revenues. But I think Mr. Schruers 
has said that is just the way it is. That is just the market. 
That is just sort of the moment we are in. What is your 
response to that?
    Mr. Chavern. Present trends can't continue. If we continue 
on this path, we are going to lose vast amounts of quality 
journalism, particularly in communities all around the country. 
That is not just a bad business outcome. That is utterly 
destructive through our civic society and can't be allowed to 
happen. And what we have asked for is a chance, a chance for a 
different kind of future, and we need that future collectively.
    Mr. Cicilline. Thank you, Mr. Chavern.
    I would like to ask unanimous consent to allow a member of 
the--not a member--a member of the full Judiciary Committee but 
not a member of the subcommittee who has joined us, the 
gentlelady from Texas, be allowed to ask a question.
    Without objection, so ordered.
    Ms. Jackson Lee. Mr. Chairman, let me thank you for the 
journey that you have started this subcommittee on, and out of 
your courtesies, I hope to be able to join you as you make this 
journey. Forgive me for my delay, but I was in the Rules 
Committee which is a long process dealing with ongoing 
amendments.
    I have served on the full committee for a pretty long time 
and have served on this committee in the past, and my 
recollection might serve me. I might have even been ranking 
member at some point in time, but it is an important committee, 
but there is important work as we speak. And so I will try to 
be focused in my questions but to read a statement that I think 
will guide my questioning.
    A small number of digital platforms appear to have outsized 
control over access to trustworthy news online. And I am a 
partaker of the National--the NNPA which is the Association of 
African American Newspapers, newspapers that have an enormous 
history back to reconstruction periods after slavery as the 
vehicle of information for many. I am familiar in a diverse 
community like Houston that speaks 98 languages that there are 
many papers that reflect different communities, newspapers, 
maybe online as well, but they seem to be adhering to 
newspapers.
    So--and then in the last election, of course, and 2018 and 
2016, we know the conspicuous invasion of the foreign 
adversaries who utilize online tools to mislead voters, to 
utilize Russian bots which we expect to occur in the coming 
2020 elections. So we are putting ourselves in a very difficult 
challenge if we don't look at the source of news.
    And then as I see the gentleman from the Atlanta Journal 
Constitution, I know that the paper newspapers are online. We 
understand that. But I think I would ask this question of 
everyone, and I think--was that Mr. Chavern who as I came in 
said that we can't last this way. And so I am going to ask the 
question as we begin this journey of how do we deal with online 
digital.
    I know that Mr.--Chairman Cicilline who I compliment will 
also have some overlapping digital privacy issues which we are 
dealing with in Homeland Security. But I want to have everyone 
answer if they would, the Achilles heel of dealing with online 
truth and a correction that they would want to see this 
committee engage in.
    And Mr. Chavern, are you the first because I can't see your 
placard there. And if everyone would take that question, maybe 
the Atlanta Journal might want to comment on what it is doing 
to newspapers even though I know you may be online as most are.
    Go ahead, sir. Thank you.
    Mr. Chavern. Just briefly, the answer is more quality and 
more responsibility. My members produce quality journalism for 
which they are responsible. If the platforms have a problem 
with quality information, and they do, the answer is more 
content from quality publishers. We need a sustainable 
partnership. We could have one. We can have one. It is 
achievable, but the platforms have been unwilling to do that to 
date, and that is why we are here.
    Ms. Jackson Lee. Thank you.
    Sir.
    Mr. Kimmelman. Congresswoman, I totally agree that we need 
quality content. I think that we have a problem both in online 
platforms that comes from every user of those platforms and 
every media company that is not doing careful, trustworthy 
curation of information. It comes all across the marketplace 
with the same incentives for the most salacious material.
    I would urge you to consider as you do your fact gathering 
and investigation to consider whether you need legislation to 
recreate some public service duty for everyone online, whether 
it be a news media company, a newspaper, or a platform to 
deliver trustworthy information and create the financial 
incentives to produce that. That would give the marketplace 
better information, better signaling of what is fact and what 
is fiction, and hopefully it would create the kind of money 
that we are hearing from local newspapers they need to sustain 
themselves.
    Ms. Jackson Lee. Thank you. Is it Ms. Hubbard?
    Ms. Hubbard. Yes. Thank you.
    Ms. Jackson Lee. Thank you.
    Ms. Hubbard. Thank you, Congresswoman.
    So as I said earlier, I think competition is--would help 
with this disinformation problem because consumers right now 
don't have an option of choosing a platform that doesn't boost 
disinformation with its engagement algorithms.
    Facebook and YouTube both use these engagement algorithms 
that actually boost the propaganda and disinformation. So 
consumers need to be able to vote with their feet, and the same 
with publishers so that Facebook--so that YouTube and Google 
actually have a risk of losing profits. And they are motivated 
to fix this problem by not losing profits.
    And the other thing I would like to add quickly is privacy 
regulation would also help because it is this 360-degree view 
of users collecting their data across the web that allows this 
information agent to then precisely target people based on the 
data collected about them.
    So if we collected less data about people, especially not 
in ways that they would never expect, there would be less 
ability to hypertarget them with this information.
    Ms. Jackson Lee. Thank you.
    Mr. Cicilline. Thank you. The time of the gentlelady has 
expired.
    I am now going to ask unanimous consent to add a number of 
letters and statements to the record regarding the 
subcommittee's recently announced investigation into major 
technology firms' potential anticompetitive behavior. A 
statement from Consumer Reports expressing their support of the 
investigation. Without objection. A joint statement from Laura 
Basset and John Stanton, two journalists who were laid off by 
the Huffington Post and Buzzfeed respectively, without 
objection, and a letter from EPIC, the Electronic Privacy 
Information Center, without objection.
    [The information follows:]
      

                      MR. CICILLINE FOR THE RECORD

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    Mr. Cicilline. This concludes today's hearing. I want to 
say thank you again to our very distinguished witnesses for 
their testimony.
    Without objection, all members will have 5 legislative days 
to submit additional written questions for the witnesses or 
additional materials for the record.
    This hearing is adjourned.
    [Whereupon, at 5:09 p.m., the subcommittee was adjourned.]
      

                                APPENDIX

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