[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
REVIVING COMPETITION, PART 2:
SAVING THE FREE AND DIVERSE PRESS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ANTITRUST, COMMERCIAL, AND ADMINISTRATIVE LAW
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
FRIDAY, MARCH 12, 2021
__________
Serial No. 117-11
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-320 WASHINGTON : 2022
COMMITTEE ON THE JUDICIARY
JERROLD NADLER, New York, Chair
MADELEINE DEAN, Pennsylvania, Vice-Chair
ZOE LOFGREN, California JIM JORDAN, Ohio, Ranking Member
SHEILA JACKSON LEE, Texas STEVE CHABOT, Ohio
STEVE COHEN, Tennessee LOUIE GOHMERT, Texas
HENRY C. ``HANK'' JOHNSON, Jr, DARREL ISSA, California
Georgia KEN BUCK, Colorado
THEODORE E. DEUTCH, Florida MATT GAETZ, Florida
KAREN BASS, California MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York ANDY BIGGS, Arizona
DAVID N. CICILLINE, Rhode Island TOM McCLINTOCK, California
ERIC SWALWELL, California W. GREGORY STEUBE, Florida
TED LIEU, California TOM TIFFANY, Wisconsin
JAMIE RASKIN, Maryland THOMAS MASSIE, Kentucky
PRAMILA JAYAPAL, Washington CHIP ROY, Texas
VAL BUTLER DEMINGS, Florida DAN BISHOP, North Carolina
J. LUIS CORREA, California MICHELLE FISCHBACH, Minnesota
MARY GAY SCANLON, Pennsylvania, VICTORIA SPARTZ, Indiana
SYLVIA R. GARCIA, Texas SCOTT FITZGERALD, Wisconsin
JOE NEGUSE, Colorado CLIFF BENTZ, Oregon
LUCY McBATH, Georgia BURGESS OWENS, Utah
GREG STANTON, Arizona
VERONICA ESCOBAR, Texas
MONDAIRE JONES, New York
DEBORAH ROSS, North Carolina
CORI BUSH, Missouri
PERRY APELBAUM, Majority Staff Director & Chief Counsel
CHRISTOPHER HIXON, Minority Staff Director
------
SUBCOMMITTEE ON ANTITRUST, COMMERCIAL,
AND ADMINISTRATIVE LAW
DAVID N. CICILLINE, Rhode Island, Chair
PRAMILIA JAYAPAL, Washington, Vice-Chair
JOE NEGUSE, Colorado KEN BUCK, Colorado, Ranking Member
ERIC SWALWELL, California DARREL ISSA, California
MONDAIRE JONES, New York MATT GAETZ, Florida
THEODORE E. DEUTCH, Florida MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York W. GREGORY STEUBE, Florida
JAMIE RASKIN, Maryland MICHELLE FISCHBACH, Minnesota
VAL BUTLER DEMINGS, Florida VICTORIA SPARTZ, Indiana
MARY GAY SCANLON, Pennsylvania SCOTT FITZGERALD, Wisconsin
LUCY McBATH, Georgia CLIFF BENTZ, Oregon
MADELINE DEAN, Pennsylvania BURGESS OWENS, Utah
HENRY C. ``HANK'' JOHNSON, Jr.,
Georgia
SLADE BOND, Chief Counsel
DOUG GEHO, Minority Counsel
C O N T E N T S
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Friday, March 12, 2021
Page
OPENING STATEMENTS
The Honorable David Cicilline, Chair of the Subcommittee on
Antitrust, Commercial, and Administrative Law from the State of
Rhode Island................................................... 1
The Honorable Ken Buck, Ranking Member of the Subcommittee on
Antitrust, Commercial, and Administrative Law from the State of
Colorado....................................................... 4
The Honorable Jim Jordan, Ranking Member of the Committee on the
Judiciary from the State of Ohio............................... 6
WITNESSES
David Chavern, President and CEO, News Media Alliance
Oral Testimony................................................. 10
Prepared Testimony............................................. 12
Brad Smith, President, Microsoft
Oral Testimony................................................. 16
Prepared Testimony............................................. 18
Jonathan Schleuss, President, NewsGuild Communications Workers of
America
Oral Testimony................................................. 29
Prepared Testimony............................................. 31
Emily Barr, President and CEO, Graham Media Group
Oral Testimony................................................. 47
Prepared Testimony............................................. 49
Glenn Greenwald, Journalist, Constitutional Lawyer
Oral Testimony................................................. 58
Prepared Testimony............................................. 60
Clay Travis, Founder of Outkick the Coverage, FOX Sports Radio
Oral Testimony................................................. 66
Prepared Testimony............................................. 68
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
An article entitled, ``Congress Wants to Give the Establishment
Media a Massive Handout,'' Breitbart, submitted by the
Honorable Jim Jordan, Ranking Member of the Committee on the
Judiciary from the State of Ohio for the record................ 92
Materials submitted by the Honorable David Cicilline, Chair of
the Subcommittee on Antitrust, Commercial, and Administrative
Law from the State of Rhode Island for the record
Statement from Jason Kint, CEO, Digital Content Next........... 116
Statement from Jeff Jarvis, the Leonard Tow Professor of
Journalism Innovation at the City University of New York's
Craig Network Graduate School of Journalism.................. 119
Statement from Maribel Perez Wadsworth, President of News,
Gannett Media................................................ 122
Statement from Rod Sims, Chair, Australian Competition and
Consumer Commission.......................................... 126
Statement from Media Matters for America....................... 133
Statement from the Honorable Susan Wild, a Member of Congress
from the State of Pennsylvania............................... 139
Statement from the National Association of Black Owned
Broadcasters, Native American Journalists Association, and
Radio Television Digital News Association.................... 140
Statement from Free Press Action............................... 141
Statement from Google.......................................... 160
An article entitled, ``Why the Future of News Won't Be Fixed
Through Antitrust Exemptions,'' Matthew Schruers, President
of Computer and Communications Industry Association.......... 165
QUESTIONS AND ANSWERS FOR THE RECORD
Response from Brad Smith, President, Microsoft, to the Honorable
Eric Swalwell, a Member of the Subcommittee on Antitrust,
Commercial, and Administrative Law from the State of California
for the record................................................. 170
REVIVING COMPETITION, PART 2:
SAVING THE FREE AND DIVERSE PRESS
Friday, March 12, 2021
House of Representatives
Subcommittee on Antitrust, Commercial,
and Administrative Law
Committee on the Judiciary
Washington, DC
The Subcommittee met, pursuant to call, at 10:00 a.m., in
Room 2141, Rayburn House Office Building, Hon. David Cicilline
[Chair of the Subcommittee] presiding.
Present: Representatives Cicilline, Neguse, Jones, Deutch,
Jeffries, Raskin, Jayapal, Demings, Scanlon, McBath, Dean,
Johnson of Georgia, Jordan, Buck, Issa, Gaetz, Steube, Bishop,
Fischbach, Spartz, Fitzgerald, Bentz and Owens.
Staff Present: Cierra Fontenot, Staff Assistant; John
Williams, Parliamentarian; Amanda Lewis, Counsel; Joseph Van
Wye, Professional Staff Member; Slade Bond, Chief Counsel;
Phillip Berenbroick, Counsel; Douglas Geho, Minority Chief
Counsel for Administrative Law; and Kiley Bidelman, Minority
Clerk.
Mr. Cicilline. The Subcommittee will come to order. Without
objection, the Chair is authorized to declare a recess of the
Committee at any time. Good morning, and welcome to today's
hearing, the second in a series to develop legislation to
promote competition online and modernize the antitrust laws.
Before we begin, I would like remind Members that we have
established an email address and distribution list dedicated to
circulating exhibits, motions, or other written materials that
Members might want to offer as part of our hearing today. If
you would like to submit materials, please send them to the
email address that has been previously provided to your offices
and we will circulate the materials to Members and staff as
quickly we can.
I would also like to remind all Members and our Witnesses
that guidance from the Office of Attending Physician states
that face coverings are required for all meetings in an
enclosed space. So, just like at Committee hearings, I expect
all Members on both sides of the aisle to wear a mask for the
duration of today's hearing. I now recognize myself for an
opening statement.
A free and diverse press is the backbone of a vibrant
democracy. Indeed, our democracy is strongest when we have a
free and diverse press that informs citizens, holds power to
account, and exposes corruption and wrongdoing. In recent years
the local news that is delivered through newspapers, online,
and the local broadcast has been in a state of economic free-
fall. Over the past 15 years, one in five newspapers closed,
and the number of journalists working for newspapers has been
cut in half. In 2019, America reportedly lost over 2,100
newspapers since 2004. Today, at least 200 counties have no
local newspapers at all.
The crisis in American journalism has become a real crisis
in our democracy and civic life. Newsrooms across the country
are laying off reporters and editorial staff or folding
altogether, while the majority of counties in America are down
to just a single publisher of local news, and many lack local
news option altogether.
In my home State of Rhode Island, circulation of our
statewide newspaper has declined by 54 percent since 2004. This
is happening to legacy news companies and digital publishers
alike. Earlier this week in the wake of an acquisition, the
Huffington Post, a digital publisher, laid off dozens of
journalists due to declining advertising revenue.
Unfortunately, they are not alone. Last year, digital
publishers furloughed or laid off dozens of reporters and other
newsroom staff. These layoffs occur at a time when more people
are online than ever before, and online readership is at an
all-time high.
This decline has also accelerated in the wake of the
pandemic at a time when local journalism is more important than
ever. As Jonathan Schleuss will testify today, and I quote,
``We are truly facing an extinction level event for local
news,'' end quote.
If this trend continues, we risk permanently compromising
the news organizations that are essential to our communities,
holding the government and powerful corporations accountable in
sustaining our democracy. In response to these concerns, the
Subcommittee examined the effect of the market power of the
largest technology platforms on the survival of a free and
diverse press as part of our bipartisan investigation last
Congress. During our inquiry, we received evidence about the
significant and growing asymmetry of power between several
dominant online platforms and news publishers.
In numerous interviews, submissions, and testimony before
the Subcommittee, publishers and broadcasters with distinct
business models and distribution strategies said they are
increasingly beholden to Google and Facebook, which
increasingly function as the gatekeepers for information
online.
For example, Digital Content Next, which represents digital
news publishers and content companies, notes in a statement for
the record for today's hearing that 64 percent of online
referrals to its premium publishers came from services owned by
Facebook or Google, underscoring the extraordinary role of
these companies and how the public discovers, searches, and
spreads information.
According to the Pugh Research Center, nearly three-
quarters of Americans get their news online through either
Facebook or Google. As news publishers have noted, this
gatekeeper power gives Facebook and Google the ability to
distort the flow of information online. This means that Google
and Facebook can divert their billions of users away from
trustworthy sources of news with a single change to algorithms
or through other subtle but meaningful ways, such as
manipulating ad auctions.
A second related problem that we identified during the
investigation is the market power of these firms over digital
advertising. Facebook and Google control the majority of online
advertising in the United States and have captured nearly all
the growth in this market.
Each year, advertisers pay billions of dollars to these two
companies to serve highly targeted ads on Facebook and through
Google's advertising network. Nearly a dozen Republican State
attorneys general who are currently suing Google for
monopolization describe Google's advertising network as the,
and I quote, ``Largest electronic trading market in
existence,'' end quote. These companies continue to enjoy
persistently high profit margins, a telltale sign of their
substantial and enduring market power. At the same time, news
publishers have seen a steep decline in revenue and a reduced
ability to monetize journalism, particularly when it comes to
these sources online.
Overall, the market power of Google and Facebook is
reenforced by the unprecedented amount of data collected by
these companies, along with other factors that have tipped
digital markets in favor of these firms and blocked rivals and
new entrants from challenging their dominance.
The findings of some other antitrust investigations
bolsters these conclusions. For example, the Australian
Competition and Consumer Commission, which conducted its own
extensive investigation into this matter, similarly noted in
their exhaustive 2019 report that Facebook and Google have
substantial market power over channels for accessing news
online and digital advertising.
In a statement for today's hearing, Rod Sims, the Chair of
Australia's Competition Authority, notes that the platform's
gatekeeper role was underscored by Facebook's decision to
quote, ``block large slots of Australian content, including
news during their negotiations with our government regarding
Australia's bargaining code,'' end quote.
Similarly, the United Kingdom's Competition in Markets
Authority concluded after its own inquiry that insufficient
competition in digital advertising undermines the ability of
newspapers and others to produce valuable content to the
detriment of broader society.
Which, quote, ``can lead to wider social, political, and
cultural harm through the decline of authoritative and reliable
news media, the result in the spread of fake news, and the
decline of the local press which is often a significant force
in sustaining communities.'' end quote.
With that in mind, today's hearing is an opportunity to
examine solutions to this urgent problem. Earlier this week, I
reintroduced the Journalism Competition and Preservation Act
with Ranking Member Buck. Our legislation would give news
publishers an even playing field to collectively negotiate with
the dominant platforms to improve the quality, accuracy,
attribution, and functioning of news online.
As part of today's hearing, I look forward to discussing
recommendations to strengthen and improve this legislation. In
particular, I am eager for a discussion on ensuring that this
framework will provide for good faith negotiations by all
parties, and mechanisms to ensure that each and every
hardworking journalist benefits from these negotiations.
While I do not view this legislation as a substitute for
more meaningful competition online, including structural
remedies to address the underlying problems in the market, 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 answer for ensuring long-term
health of the news industry. We need an all-of-the-above
approach to save journalism and to take on monopoly power.
Doing nothing is not an option.
In that vein, we are also here to hear other suggestions to
rein in the power of these monopolies. In our last hearing, we
heard bipartisan agreement from the Members of our Subcommittee
on a number of issues, including structural separation,
preventing self-preferencing and discrimination, and
interoperability and data portability requirements.
Congressional inaction and insufficient enforcement levels
have led to waves of consolidation and layoffs by reporters of
both digital and print publishers alike. In the absence of a
competitive marketplace or congressional action, we will
continue to see mass consolidation and widespread layoffs.
As the events leading up to the violent mob's attack on the
Capitol on January 6 have made clear, the stakes are high. Our
country will not survive if we do not operate with a shared set
of facts, if corruption is not exposed and rooted out at all
levels of government, and if power is not held to account.
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.''
This is the very reason the press is called the fourth
estate. Whether it's an online publisher, a national newspaper,
or a local broadcaster, we cannot have a democracy without a
free and diverse press.
In closing, I look forward to today's hearing and learning
more from our very distinguished panel of Witnesses.
I now recognize the distinguished gentleman from Colorado,
the Ranking Member of this Subcommittee, Mr. Buck, for his
opening statement.
Mr. Buck. Thank you, Mr. Chair. I am pleased to co-sponsor
this important legislation with you, and I thank you for your
collegiality and focus on bipartisanship.
In the 1990s, 4 percent of the world's population used the
internet. Today, that number is nearly 60 percent. The internet
is a tool with incredible opportunities for expanding freedom
and democracy in America and around the world. We need to
confront the reality that multinational corporations are
sabotaging Americans' access to information in advancing
authoritarian regime's effort to manipulate the internet for
oppression.
When the internet was first developed, it's potential as a
bastion of democracy was easily recognized. President Reagan,
famously said, ``Technology will make it increasingly difficult
for the State to control the information its people receive.
The Goliath of totalitarianism will be brought down by the
David of the microchip.''
We are now seeing Big Tech making content-related decisions
for people around the world, including here in the United
States. What content is available to a free citizenry is driven
and shaped by the political agendas of these tech corporations,
not consumer preferences. We're not seeing a systemic problem
with people shutting themselves out of the public discourse as
critics feared, instead, the tech titans are censoring material
they disagree with. They are able to do this because they have
achieved monopoly status in the market. The monopoly has given
them the power to police the marketplace of ideas and dictate
what consumers can see.
This problem is exacerbated by small and medium market news
sources disappearing because monopolies are squeezing them out
of the market. Companies like Google and Facebook have
decimated small and media market news sources by cutting their
ad revenues.
In 2010, Google publicly disclosed how much of the ad
revenue they shared with publishers. At the time, publishers
were earning almost 70 percent of the revenue from content ads,
which are the ads you see on a publisher's website. In 2020,
the Association of National Advertisers estimated that
publishers are now only taking home between 30-40 percent of
the ad revenue. That's a huge decrease, and we have seen the
adverse effects of that change.
Since 2004, the United States has lost approximately 2,100
newspapers, which accounts for a quarter of the Nation's total.
In 2004, there were almost 9,000 newspapers. By the end of
2019, that number dropped to 6,700. More than 200 of the
Nation's 3,143 counties and parishes no longer have a local
paper. The newsrooms that are closing are mostly in small,
rural communities.
Similarly, local radio and TV stations are also
disappearing at an alarming rate. Study after study shows that
Americans are more trusting of local news outlets and local
reporters, and with good reason. There is more diversity of
viewpoint in the small and medium market outlets. That
diversity allows space for more voices, and it benefits our
democracy.
My concerns about the decline in local news outlets are not
based on some nostalgia for a former era. The robust exchange
of ideas has always been important in this country, but it is
now essential as conservatives seek to battle cancel culture
and maintain a voice in the public square.
Many of my colleagues advocate doing nothing in this area
because we should just let the market work. From this
perspective, newspapers and local TV and radio stations dying
is just a result of competition in a healthy marketplace. They
lean on the idea of creative destruction and Darwinian
competition. I value the market, economic freedom, and
capitalism, but I also value freedom of speech and freedom of
the press. I want to see these bedrock American values
preserved for future generations.
We are seeing the failures of antitrust policy at work with
Big Tech. Big Tech not only controls the news market because it
controls the digital advertising market, but it also exercises
gatekeeper control over speech. All Americans should be
concerned. We are just starting to see the results of tech-
tightened control over the news and how it does not bode well
for future generations.
Congress sat idly by as these platforms became monopolies.
We cannot sit by and let them become the public square, too. We
cannot let them become the arbiters of truth and the wielders
of government-like power. These companies track and seek to run
our lives through their technologies and algorithms. Big Tech
companies have become digital kings, and they represent
precisely the kind of political power the antitrust laws are
designed to tackle.
This bill is a step in the right direction to dethroning
those digital kings. It will give publishers and broadcasters a
4-year exemption from the antitrust laws so they can more
effectively bargain with Google and Facebook. It is not a
subsidy for outlets, but rather a leveling of the playing field
in favor of democracy and free expression.
Mr. Chair, I also want to make sure that through this
legislation we are not creating unattended consequences that
will end up harming those we seek to help. For example, we want
to make sure that news outlets involved in negotiations are not
incentivized to harm the interests of competitor news groups
not at the table. Likewise, we want to ensure that Google is
not harming those it hasn't negotiated with by burying them
several pages back in search results.
I am pleased that this bill gives small-town outlets like
the Greeley Tribune and the Fort Morgan Times, and conservative
outlets, like Breitbart and The Federalist, a chance to
negotiate together and claw back some of their hard-earned
advertising dollars from Google and Facebook. Advertising
dollars are the lifeblood of these outlets earned through hard
work and dedicated reporting.
Mr. Chair, I appreciate the opportunity to work together,
and I yield back.
Mr. Cicilline. I thank the gentleman for yielding back.
I now recognize the Ranking Member of the Full Committee,
the gentleman from Ohio, Mr. Jordan, for his opening statement.
Mr. Jordan. Thank you, Mr. Chair. I want to thank our
Witnesses for being here today. I am going to do something I
don't think I have ever done before in an opening statement. I
am going to read from a couple of the individuals--Mr. Travis
and Mr. Greenwald, I have read their full statements last
night. Very compelling testimony. I am going to read from part
of those, because I think they capture what the situation truly
is.
Let me start with Mr. Travis' written testimony. He says
this, ``Algorithms are designed by humans, and the results are
monitored. Facebook can make any site sore in popularity or
crush their traffic, and they can do it in an instant. This is
the power of Big Tech writ large. We are living in a new gilded
age where tech billionaires, maybe soon to be trillionaires
have more power than any elected official in the land.
Facebook's Mark Zuckerberg, Twitter's Jack Dorsey, Apple's
Tim Cook, Alphabet's Sundar Pichai, and Amazon's Jeff Bezos
have more power today than Andrew Carnegie, J.P. Morgan, John
D. Rockefeller, and Henry Ford ever did in the earliest days of
the 20th century. These modern-day tech monopolists can pick
Presidential election winners, control our national debate,
decide whose voice is heard, whose voice is not heard. The
Supreme Court no longer decides what the law of the First
amendment is in this great country. These tech executives do in
practice. Big Tech controls the country, and they control the
country by deciding what we see.''
Well said, Mr. Travis. I mean, if this doesn't underscore
why we need to remove the liability of protection in section
230, I don't know what does.
Mr. Greenwald makes the same points in his written
testimony. Then he says this about the specific question at
hand at this Committee hearing today. He says, ``How Congress
sets out to address Silicon Valley's immense and un-Democratic
power is a complicated question.'' Well, it is, posing complex
challenges. ``The proposal to vest media companies with an
antitrust exemption in order to allow them to negotiate as a
consortium or cartel seeks to rectify a real and serious
problem.'' Very true. ``But,'' and this is important, ``but
empowering large media companies could easily end up creating
more problems than it solves.''
It goes on to say this, ``Further empowering this already
powerful media industry, which is demonstrated we use its force
to silence competitors under the guise of quote `quality
control' runs the real risk of transferring abusive monopoly
power from Silicon Valley to corporate media companies.'' This
last clause it important, ``or even worse encouraging some sort
of de facto merger in which these two industries pool their
power to the mutual benefit of each.''
We already saw that happen. We saw it in last fall's
election. Both Mr. Travis and Mr. Greenwald cite this in their
written testimony. Last fall when Big Media teamed up with Big
Tech to make sure the American people didn't hear about the
Hunter Biden story in the weeks leading up to a Presidential
election.
So, we have already seen them team up against We the
People, and now we have legislation that's going to give Big
Media this consortium and cartel power. At the same time, we
are looking to use antitrust law to deal with Big Tech, we are
going to give an antitrust exemption to Big Media. Maybe that's
the right course, but I got real questions about that whether
we should move in that direction.
So, I look forward to hearing from our Witnesses. I want to
thank them again for coming, particularly Mr. Travis who
traveled here in person. I appreciate his good work. We look
forward to a chance to hear from each of our Witnesses.
Mr. Chair, and with that. I yield back.
Mr. Cicilline. The gentleman yields back.
It's now my pleasure to introduce today's Witnesses.
Our first is David Chavern, the President and CEO of the
News Media Alliance where he has served 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. Mr. Chavern received his bachelor of arts degree
from the University of Pittsburgh, his MBA from Georgetown
University, and his J.D. from Villanova University School of
Law.
I would now like to recognize my distinguished colleague
and the Vice-Chair of this Subcommittee, Ms. Jayapal, to
introduce our second Witness. I know she does so with
incredible pride.
Ms. Jayapal, you are recognized.
Ms. Jayapal. Thank you. Thank you so much, Mr. Chair. Thank
you for this opportunity to welcome Mr. Brad Smith, the
President of Microsoft and a Fellow Washingtonian who has done
a tremendous amount for our region, our state, and indeed our
country. Mr. Smith is one of the leading global figures in the
technology industry today, and he has testified several times
before the United States Congress and other governments on
policy issues.
He joined Microsoft in 1993, spending 3 years leading the
legal and corporate affairs team in Europe. In 2002, he was
named Microsoft's general counsel and led the company's work to
resolve antitrust controversies with governments around the
world and companies across the tech sector. I believe that's
given him a very unique and valuable perspective on the issues
of tech and antitrust and the responsibility of the tech
industry to work with government on smart regulation that
protects competition, innovation, and democracy.
Mr. Chair, I actually believe that that experience is very
much part of the reason that Microsoft played such a productive
role in Australia, most recently. I know we're going to hear
about that more today.
Before joining Microsoft, Mr. Smith worked as an Associate
and then partner at the law firm of Covington & Burling. He
earned his BA from Princeton University, his J.D. from Colombia
University Law School and studied international law and
economics at the graduate institute in Geneva, Switzerland.
Mr. Smith, I thank you for testifying before us, but also
for the tremendous work you do in our state and in our country.
I look forward to your testimony today.
Mr. Cicilline. I thank the gentlelady, and I also want to
thank Mr. Smith for his assistance during the course of our
investigation. He provided a very valuable briefing to Members
of the Subcommittee during the course of our 16-month
investigation, and I again thank you for that.
Our third Witness is Jonathan Schleuss who is the President
of the NewsGuild-Communications Workers of America, a union
that represents more than 20,000 journalists and media workers
across the United States and Canada.
Before being elected as President of CWA, Mr. Schleuss was
a graphics and data journalist at the Los Angeles Times where
he led their unionization efforts in 2018. This marked the
first time in the paper's 135-year history that the newsroom
had been organized.
Mr. Schleuss has also served as the online editor at the
Northwest Arkansas Democrat Gazette, and as a weekend host for
KUAF, a national public radio affiliate based in Fayetteville,
Arkansas. He is also an adjunct professor at the USC Annenberg
School of Communications and Journalism. Mr. Schleuss received
his bachelor's degree from the University of Arkansas.
Our fourth Witness, Emily Barr, is President and CEO of
Graham Media Group. As CEO Ms. Barr has overseen seven local
media hubs, all top-70 markets since 2012. Under her
leadership, Graham Media Group was named the 2016 station group
of the year by Broadcasting and Cable Magazine. Ms. Barr has
spent more than four decades leading and working in broadcast
newsrooms.
Before joining GMG, Ms. Barr served as President and
General Manager at ABC 7 Chicago from 1997-2012, and WTVD TV,
an ABC-owned station in Raleigh from 1994-1997.
Currently, she serves on the boards of both the Associated
Press and the Television Bureau of Advertising and is the Chair
for television for the National Association of Broadcasters.
Ms. Barr was most recently named 2020's Broadcaster of the
Year by Broadcast and Cable. Ms. Barr received her BA from
Carleton College and her master's degree from George Washington
University.
Our fifth Witness, Glenn Greenwald, is a journalist and
constitutional lawyer. In 2014, Mr. Greenwald co-founded First
Look Media's The Intercept, an online publication where he
served as an editor. He left the publication in 2020 and
currently operates a popular substack newsletter.
Prior to joining the Intercept, Mr. Greenwald's work was
featured by both The Guardian and Salon. He has received a
number of awards for his reporting, including the Park Center
I.F. Stone Award for Independent Journalism in 2018, and the
2010 Online Journalism Award for his coverage of the abusive
detention conditions of Chelsea Manning. The NSA reporting he
led for The Guardian was awarded the 2014 Pulitzer Prize for
public service. He has written four New York Times Best
Sellers, including, ``No Place to Hide, Edward Snowden, the
NSA, and the U.S. Surveillance State.''
Prior to his writing career, Mr. Greenwald was an active
litigator specializing in civil rights and First Amendment
cases. Mr. Greenwald received his bachelor's degree from George
Washington University and his J.D. from New York University
School of Law.
Today's last Witness, Clay Travis, is the founder of
Outkick the Coverage, a popular sports and entertainment
website. He is also the host of Outkick the Coverage on FOX
Sports Radio, the Outkick the Show Livestream, and Wins and
Losses podcast on iHeart Radio. Mr. Travis has also written a
number of books including, ``On Rocky Top: A Front-Row Seat to
the End of an Era,'' and ``Republicans Buy Sneakers Too: How
the Left is Ruining Sports with Politics.''
Before his media career, Mr. Travis was a lawyer working in
the U.S. Virgin Islands and Tennessee with a popular personal
blog. He ended his legal career in 2006 to focus full-time on
writing and entertainment. He has also served as a writer and
editor at Deadspin, as well as a national columnist at
Vanhouse.
Mr. Travis received his bachelor's degree from George
Washington University and his J.D. from Vanderbilt Law School.
We welcome all our distinguished Witnesses, and we thank
you for your participation in today's hearing. I will begin by
swearing in our Witnesses.
I ask our Witnesses testifying in person to rise, and I ask
our Witnesses testifying remotely to turn on their audio and
make sure that we can see your face and your raised right hand
while I administer the oath.
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.
Let the record show the Witnesses have answered in the
affirmative. Thank you. You may be seated.
Please note again to all the Witnesses that your written
statements will be entered into the record in their entirety.
Accordingly, I ask that you summarize your testimony in 5
minutes.
To help you stay within that timeframe, there is a timing
light in WebEx. When the light switches from green to yellow,
you have 1 minute to conclude. When the light turns red, it
signals that your 5 minutes have expired.
I begin now by recognizing Mr. Chavern for 5 minutes.
TESTIMONY OF DAVID CHAVERN
Mr. Chavern. Thank you, Chair Cicilline, Ranking Member
Buck, and the 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 news organizations across the United
States. Our Members change from small, local newspapers to some
of the largest news organizations in the world.
The news media is and always has been an essential part of
our democracy. We are, after all, the only business mentioned
in the First Amendment. The core function of news media is to
provide robust coverage of global, national, and local issues
from COVID-19 pandemic to corruption by State officials. Their
ability to fulfill that role, however, is under threat, and
Congress' help is needed to combat that threat.
Though journalist commitment to public interest has
remained the same, the way that readers consume news content
and advertisers communicate with those consumers has changed
dramatically over the years. As the world has moved online, so
has our industry. Our innovations have allowed news media to
provide real-time updates on rapidly unfolding stories, such as
catastrophic weather events and public health crisis.
Local journalism has also acted as a clear antidote to the
scourge of misinformation impacting communities across the
country. Fundamentally, our leadership is at its highest levels
ever.
While news organizations continue to invest heavily in
generating critically valuable reporting, a few dominant
companies in the digital ecosystem ensure that little value is
returned to publishers. The government cannot regulate the news
business under the First Amendment, but there are now two
companies, in particular, Google and Facebook, that clearly do
regulate us. Their algorithms determine when and if news is
seen in search results and search feeds; they determine how
news is presented to readers; they collect and control data
about our news audiences; and they control the systems and
markets around digital advertising. These challenges are born
of dominance, and they impact news publishers of every type no
matter the form of ownership or ideological balance of their
editorial pages.
In thinking about the future of news, too often we get
pulled back into debates about past business models. I am here
to ask a question about the future. Do we want professional
local journalism to continue to be available to the public, or
don't we? Because if we maintain our current path, we will see
the ultimate destruction of quality, local news for most of the
public without any rational expectation of alternatives or a
new entrance. Hope is not a strategy, nor is it the basis for
sustainable market for news. We need solutions now.
So, what do we need from Congress? First and foremost,
local news publishers need the ability to collectively
negotiate with the major platforms as contemplated by the
Journalism Competition and Preservation Act. In the face of
dominant intermediaries, it is unconscionable to prevent
publishers from working together to fight for their own future.
The publishers most in need of collective action are local and
community publishers who have no individual capacity to assert
their value against the major platforms.
Experience from around the world has now taught us that
this might not be enough. As we have seen in Europe and
Australia when pressed, Google and Facebook will refuse to
negotiate, threaten, in some cases actually cut off access to
news content, and offer limited compensation to selected
publishers in an attempt to forestall legislation. We should
all understand that these actions are, in and of themselves,
fundamental expressions of market dominance.
We would suggest that the Congress consider expansions of
the JCPA that would include an oversight mechanism to ensure
good faith negotiations by the platforms, that would result in
equitable treatment for local and community publishers, and
that any compensation model will reward investments made by
publishers in journalists and journalism.
Such a system could be structured in a variety of different
ways, but fundamentally, it would be a limited and focused
response to the challenge of ensuring a future for local
journalism. All we're really asking for is a fair chance to
fight for ourselves and our futures. Thank you again very much,
and I look forward to your questions.
[The statement of Mr. Chavern follows:]
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Mr. Cicilline. I thank the gentleman for his testimony.
The Chair now recognizes Mr. Smith for 5 minutes for his
opening statement.
TESTIMONY OF BRAD SMITH
Mr. Smith. Thank you, Chair Cicilline, Ranking Member Buck,
other Members of the Committee, it's a pleasure for me to be
here. Let me say, as well, thank you Representative Jayapal for
that kind introduction from a neighboring Washingtonian.
Let me first say the obvious, Microsoft is a tech company,
and like every business, we have business interests. There are
some steps this Subcommittee could take that will make us more
challenged in our business. It may make it more costly to do
business. There are other steps this Subcommittee could take
that will help us in our business. Yet, I have to say what is
also obvious is that the issues before this Committee are not
about our business or any single business. They are about an
issue far bigger than that. They're about the future of
journalism in this country.
If one thing is clear, it's this: for almost 250 years,
journalism has been a lifeblood of democracy. This is
especially true at the local level. Local news plays critical
roles in telling people about what their school board is
considering or exposing corruption in public office. It does a
lot more than that too. It tells an entire community about
what's going to happen at the county fair or about the high
school band or about a church retreat.
I think it's really interesting that Alexis de Tocqueville
was one of the first tourists, if you will, to visit America--
this was in 1835. After visiting community after community, he
talked about the role that newspapers played in preserving
freedom. Then he said this, ``To suppose that they serve only
to protect freedom is to diminish their importance. They
maintain civilization.'' That is true. The news maintains
American civilization.
As you noted, Chair Cicilline, the news in America today is
not alive and well. Almost every American knows from an early
age that we are a country of 50 States. We're also a Nation of
3,142 counties. It is at the county level and in cities and
towns that communities and people live their lives.
Yet, after the decline, the collapse of more than 2,000
newspapers, we now live in a Nation where almost half of our
counties are down to one newspaper at best, 1,540 of those
counties, 200 of which have no newspaper at all. Of everything
I have read about the State of journalism in America and its
impact, nothing is more impactful to me than the statement of a
citizen in Florida who talked about what had happened after
they had lost their local newspaper. He said, ``After several
years without a strong local voice, our community does not know
itself.'' How do we maintain civilization? How do we protect
democracy if our communities no longer know themselves? That is
the issue to be addressed.
We all know how this has happened. It's because of
technology. Technology that in so many ways, including for my
own company we believe has done so many good things for the
country and the world. Yet, it's also perfectly clear that what
was previously advertising revenue for newspapers has instead
moved to advertising revenue for tech companies.
In fact, what we have seen is the decline in advertising
revenue for newspapers fall from $48 billion to 14. That is a
deep hole that no one has been able to make up. So, what do we
do? That is the question of the day, and I will offer three
thoughts.
First, I think that you all are on the right path. That's
why Microsoft is endorsing the Journalism Competition and
Protection Act, the JCPA, to give news organizations the
ability to negotiate collectively, including with Microsoft.
Because as presently drafted, we will be subject to its terms.
Second, I think it's good to consider additional ideas,
including ideas that we have worked with recently firsthand in
Australia. Ideas that would impose on tech companies an
obligation to bargain in good faith, to avoid retaliation, to
be transparent about their practices. These are worthy of
competition and consideration by the Antitrust Subcommittee.
Finally, I hope that the Subcommittee will continue its
work to think more broadly about the fundamental lack of
competition, especially in search and digital advertising that
are at the heart of not just the decline in journalism but the
decline and challenge in many sectors of the economy. That too
is worthy of consideration when it comes to potential new
legislation.
In short, the issues are big, the needs are urgent, the
time is now, and we welcome the opportunity to be part of this.
Thank you.
[The statement of Mr. Smith follows:]
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Mr. Cicilline. Thank you, Mr. Smith, and we are really
grateful for your testimony.
I now recognize Mr. Schleuss for 5 minutes.
TESTIMONY OF JONATHAN SCHLEUSS
Mr. Schleuss. Chair Cicilline, Ranking Member Buck, and the
Members of the Subcommittee, thank you so much for having me.
My name is John Schleuss, and I am President of the NewsGuild-
CWA, and I am here to tell you about the extinction level event
workers are facing in the news industry.
We are the largest union of journalists in the United
States with thousands of news workers among our Membership at
large publications like the Washington Post and The New York
Times, but also the small ones, like the Billings Gazette in
Montana, and the Jacksonville, Florida-Times Union. We are part
of the larger union, the communications workers of America.
I grew up in rural South Arkansas, and I remember as a kid,
my grandmother got two newspapers every day. In the morning,
she got the Arkansas Democrat-Gazette, and in the afternoon,
she got the Camden News. Fast forward to my first full-time job
in the industry which ended up being at the Arkansas Democrat-
Gazette as their online editor and a background both in
computer programming and in journalism, and I fused my fields
to help us transition from printed newspapers to better news
online.
Two months into my job, the head of the company pulled
everyone into a room and told us that we were merging with our
competing newspaper. Within a couple of months, hundreds of
people lost their jobs. I remember seeing reporters, mothers
and fathers crying in offices not knowing what their futures
were going to look like. That was a quick introduction into the
radical shift in the news industry.
That's been my life, and that's been the life of so many
journalists across our country. Cuts, consolidation, and local
news sources getting bought out and gutted. At that time, I was
told that for every dollar that that newspaper brought in, 90
cents of it came from advertising, print advertising.
Today's things are radically different. In the last 16
years, 2,100 newsrooms across the country have shut down, and
there are half as many newspaper journalists working today as
there were a decade ago. That's 36,000 journalists no longer
working in cities and towns across the United States--not
covering city council meetings, not covering school boards, not
providing communities a voice.
The pandemic and widespread economic pain across the
country has sped up the revenue losses in newsrooms. The 90
cents that newspapers used to earn, that's gone too, as
revenue--print revenue is dried up, and digital advertising is
raked in by almost, just two companies, Google and Facebook.
That revenue loss resulting from the platforms dominant market
position has left many newsrooms in a weakened financial
condition. That has left them vulnerable to take over by
predatory financial actors who don't care about local news,
they only care about cash extraction, and they accomplish that
by strip-mining local news outlets and cutting local staff.
What's left are ghost newspapers or no news coverage at
all. These hedge funds like Alden Global Capital are gutting
people off from knowing what's happening in their communities
and eroding our democracy. Alden's gobbled up local newspapers
and gutted them. Quick institutions like The Denver Post and
the St. Paul Pioneer Press, and the Orange County Register, at
12 publications where we have data, Alden cut staff by more
than 75 percent since 2012, faster than the already devastating
industry decline.
The Journalism Competition and Preservation Act accurately
identifies the problem of excessive market power of Facebook
and Google, and we appreciate the bill's focus on rectifying
the core power imbalance between those platforms and the news
companies. Google and Facebook benefit from the stories
produced by journalists, and they use that traffic to sell ads,
capturing a majority of the digital ad revenue.
The companies should pay their fair share when benefiting
from sharing of news stories. However, because many news
companies put shareholder profits above our communities, we
need specific enforceable requirements to make sure that
additional revenue is tied to local news jobs.
We recommend that at least 60 percent of any added revenue
generated through collective industry bargaining be dedicated
to new jobs. Further, we were experiencing a wave of
unionization these past 3 years with thousands of workers
organizing to protect their jobs and their publications.
Any organization receiving additional revenue must be
required to bargain in good faith and remain neutral when
workers want to organize a union. We also want to ensure that
medium and smaller publications benefit, because the industry
is so consolidated. Even just in the past 2 years, five
companies, several of them controlled by hedge funds, owned \1/
3\ of America's daily newspapers and \1/2\ of all newspaper
circulation.
In addition to taking on the tech platform's predatory
behavior, we must also address the attacks on local news by
vultures like Alden by passing the Stop Wall Street Looting
Act.
The crisis in local news is a crisis of democracy. Congress
needs to use its power to respond to the crisis for the good of
our country. Thank you.
[The statement of Mr. Schleuss follows:]
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Mr. Cicilline. Thank you, Mr. Schleuss, and I apologize for
the mispronunciation. I won't get that wrong again.
I now recognize Ms. Barr for 5 minutes.
TESTIMONY OF EMILY BARR
Ms. Barr. Good morning, Chair Cicilline, Ranking Member
Buck, and the Members of the Subcommittee. My name is Emily
Barr, and I am the President and CEO of Graham Media Group,
owner of seven local television stations. I appreciate the
opportunity to testify on behalf of the National Association of
Broadcasters and its nearly 7,200 free and local television and
radio station Members in your hometowns.
Broadcasters represent one of the last bastions of truly
local, unbiased journalism--information that is still respected
by all Americans. Your constituents turn to their local
reporters and anchors for voices they trust. Legislative
action, including swift passage of the Journalism Competition
and Preservation Act, is needed to preserve this essential
cornerstone of our democracy.
This past year challenged us in myriad ways, but among the
most painful for many Americans was the isolation they
experienced--detachment from their families, neighbors, and
communities. When it was needed most, local television and
radio stations provided the civic bond for the communities we
serve, doing incredible work in the face of our own enormous
challenges.
We continue to be the primary source of the community-
focused information on which your constituents have relied
during this pandemic. How do I keep my family safe? When and
where can I get vaccinated? When can I visit my grandparents?
When can my children safely go back to school? These are the
questions that we help our viewers and listeners navigate every
day.
This past year has also tested our democracy and the very
pillars upon which it stands, including a free and diverse
press. Due in large part to the misinformation circulating
unchecked in the digital ecosystem, more and more Americans
have lost faith in the information reaching their eyes and
ears. Fortunately, local broadcasters remain a touchstone for
the truth and are the most trusted source of information in the
country.
I am proud that Graham Media stations exemplify this
commitment to community and truth. For example, Floridians who
were recently shut out by the State's failed unemployment
system did what Americans do when there's no one else to turn
to: They called upon their local broadcaster. WKMG in Orlando
answered that call, shining a light on that crisis and creating
the publicity and pressure needed to put nearly a million
dollars in unpaid benefits back into the hands of Floridians
entitled to them.
I've spent over four decades in local broadcast television,
working in virtually every capacity, from the newsroom to the
boardroom, and I understand the significant cost of producing
quality journalism. Quality journalism, delivered through our
uniquely free service, has only been made possible over many
decades through advertising revenues. As you all are aware,
these revenues have experienced a freefall in recent years due
almost exclusively to the rapid, often anticompetitive
expansion of the dominant online platforms.
The market power of the tech platforms undermines the
online advertising model for local broadcast journalism in two
important ways. First, the tech platforms' role as content
gatekeepers stifles our ability to generate user traffic.
Second, anticompetitive terms of service and a take-it-or-
leave-it approaches leave local broadcasters with a below-
market sliver of those ad revenues.
For local broadcasters and our viewers and listeners, this
is a catch-22. To attract online user traffic, we must be
accessible through the major platforms, yet the terms of access
dictated by the platforms devalue our products.
Even more concerning is the degree to which certain
platforms commoditize news content with little regard for the
quality and veracity of the story. This puts fact-based
reporting like ours on par with unsubstantiated clickbait as we
fight for user eyeballs in both platform newsfeeds and
traditional search. The result is a dangerous focus on catchy
headlines and viral stories over quality journalism.
This market transformation has been exacerbated by
deliberate decisions on the part of the tech platforms to put
technological and systemic roadblocks in the way of
broadcasters trying to gain access to these platforms.
The barriers to entry erected by the major platforms take
on many forms. For example, decisions about which content will
be prioritized by algorithms often favor sensationalism and
misinformation over hard journalism. Platforms decide
unilaterally which content can be monetized and how much
revenue they will share. As a result, the dominant online
platforms have flourished, siphoning off huge amounts of
advertising revenues that are the lifeblood of free local
journalism.
One significant step toward curing these harms would be the
passage of the JCPA. NAB strongly supports this targeted,
commonsense proposal which would give broadcasters and other
news publishers the ability to level the playing field in
negotiations with the tech giants.
In addition to the JCPA, NAB looks forward to working with
Congress to explore additional policy remedies to ensure that
journalists and news organizations are fairly compensated for
the reporting and content they create, recognizing the inherent
value of this original content.
Thank you again for the opportunity to appear before you
today, and I look forward to your questions.
[The statement of Ms. Barr follows:]
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Mr. Cicilline. Thank you so much, Ms. Barr, for your
testimony.
I now recognize Mr. Greenwald for 5 minutes.
TESTIMONY OF GLENN GREENWALD
Mr. Greenwald. Good morning, Chair Cicilline, Ranking
Member Buck, and the Members of the Committee. Thank you so
much for the opportunity to participate in these hearings.
My name's Glenn Greenwald, and the work I have been doing
for the last 25 years, first for a decade or so as a
constitutional lawyer and then for the last 15 years as a
journalist, as somebody who has done much investigative
reporting that has provoked the ire of many governments around
the world, who has co-founded a media outlet in 2013 and helped
to grow it through 2020 in this very difficult climate, and as
a co-founder of the Freedom of the Press Foundation, devoted to
defending the right of journalists to be free of government
retaliation, I have a really passionate and deep and
longstanding interest in the issues before this Committee.
I think, as well, that this Subcommittee has done some of
the most important work, particularly with the October report,
in documenting the serious menace that Silicon Valley monopoly
power has, not just for our political life but for the flow of
information and, increasingly, other sectors of our life.
I certainly agree with everyone who has spoken before me
about the serious problem of, particularly, local news outlets
failing as a result of their inability to find a financial
model to sustain themselves in this climate. I nonetheless do
have concerns about the proposed solution pending before the
Subcommittee.
If you look at the last 5-6 months, I believe strongly that
the problem of Silicon Valley [inaudible] of their monopoly
power interfering [inaudible] has worsened quite severely.
Three incidents in particular that I define and describe in my
opening statement, one being what Congressman Jordan referred
to as the censorship of what turned out to be completely
accurate reporting based on authentic and genuine documents
broken by the New York Post, the Nation's oldest newspaper,
about the front-running Presidential candidate in the weeks
leading up to the election by Twitter simply banning any
discussion of that story and locking that newspaper out of its
account unless they agreed to delete all references to their
own reporting. Facebook algorithmically suppressing the ability
for that story to spread was an extremely disturbing example of
the ability of tech giants to interfere in our elections.
The same took place with the removal of the sitting
President of the United States, which, although supported by
many in the United States, was condemned by world leaders,
including many who had a very adversarial relationship with
President Trump--Chancellor Merkel in Germany, the President of
Mexico, French and E.U. officials--on the grounds that tech
giants are posing a threat not just to American democracy but
to world democracy.
The concern that I have is that, often, we talk about the
relationship between journalists and the media industry on the
one hand and tech giants on the other as a predator-prey
relationship where the tech giants are the predators and the
news industry is the prey, but oftentimes that's not the case.
If you look at the most serious and disturbing instances of
tech censorship over the past 6-12 months, one would expect,
based on the traditional model of news media to uphold the
values that Chair Cicilline referred to as a free and diverse
press, to condemn and oppose that kind of censorship, and yet
the opposite happened. Oftentimes, the journalists were not
only supporters of it after the fact but leading proponents of
it beforehand, pressuring these tech companies to censor and to
silence ideologies with which they disagree or competitors to
these organizations.
I am concerned, in particular, that by empowering a news
media that believes not necessarily any longer in a free and
diverse press but in ideological homogeneity that they can use
this new power to impose these values of censorship, of
silencing news outlets with which they disagree in the name of
quality control.
I am particularly worried that we have a news media that is
becoming, itself, increasingly concentrated, where The New York
Times is essentially becoming like the Amazon of journalism.
This Subcommittee issued a report filled with extremely
promising and important solutions to the problem of
monopolistic power. I'm concerned that if the Subcommittee
instead starts taking a piecemeal approach to appease and
aggrandize the most powerful industries, like journalists, it
could forestall the opportunity to get to the root of the
problem that is concerning people across the ideological
spectrum, which is the need to apply antitrust laws to these
growing monopolies not on a case-by-case basis but overall. So,
I hope the Committee stays focused on its outstanding report
that it issued.
Thanks again for the opportunity.
[The statement of Mr. Greenwald follows:]
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Mr. Cicilline. The gentleman yields back.
I now recognize Mr. Travis for 5 minutes.
TESTIMONY OF CLAY TRAVIS
Mr. Travis. Chair Cicilline, the Members of the
Subcommittee, I appreciate you having us all here today to talk
about an incredibly important subject that impacts all of us,
Democrats, Republicans, independents alike.
Nearly 10 years ago, I started my own company, having no
idea what direction media was going to move. That company,
OutKick.com, is now one of the largest sports and opinion
independent websites in the country. We've had a great deal of
success.
I also host a daily sports talk radio show from 6:00-9:00
a.m. eastern, all 50 States, 300-plus AM/FM stations. On August
the 11th, the President of the United States came on my radio
program. He came on because he wanted to talk about the need
for college football and college sports to be played this fall.
Not a particularly partisan issue. We talked about the NBA. We
talked about the NFL. We talked about sports as the Nation
experiences sports.
The day after the President came on my radio show--we
covered that day, August the 11th, the stories that came out of
that interview aggressively, as anyone would who had the
President of the United States on their radio show. The day
after that interview, Facebook tanked our traffic.
The data in the appendices that we attached for you show
that the next day and over the next week Facebook removed 68
percent of our audience, 76 percent of our new users. That cost
my company hundreds of thousands of dollars.
To me, it was clear content-based speech discrimination.
Facebook didn't like that we had the President of the United
States on our radio program, and they also didn't like that the
majority of the coverage of that interview was positive--which,
as a sports fan, it's hard to be negative when the favor of the
President is aligned with games actually being played.
That, to me, is an interesting anecdote into the
overwhelming power that we have given to the Big Tech companies
in this country.
It doesn't stop there either. There's an interesting thing
that happened to us just in the last couple of weeks. Some of
you may have read an editorial in The Wall Street Journal by a
man named Dr. Makary, who is a Johns Hopkins doctor--highly
qualified. His opinion, written on the editorial page of The
Wall Street Journal newspaper, his opinion was that, based on
the current rate of vaccination as well as the people who had
already been exposed to COVID, it was likely by the end of
April that herd immunity would be reached in this country.
Certainly, some scientists and doctors agree with that;
certainly, some scientists and doctors disagree with that
opinion.
We wrote about that editorial opinion on our website. The
article was not in any way complicated or difficult. In fact,
our headline was straightforward: ``Johns Hopkins Medical
Professional: Herd Immunity Will Be Here By April.''
We published that on Facebook. Within a matter of days, we
received a notification from Facebook with the downright
Orwellian subject, ``Important Notification: Misinformation
Violation.''
Facebook told us that we were not allowed to share the
opinion of a doctor on our website because they said it was a
fact-check inaccuracy. It was, Members of the Subcommittee, an
opinion of a reasoned and well-learned doctor. That is what the
scientific method is. We argue about what the truth is in this
country, with an idea that we reach a better conclusion.
Facebook's own fact-checkers labeled our article about an
opinion to be factually inaccurate, which is an impossibility.
Who checks the fact-checkers?
Our traffic declined by 80 percent, as you can see, as soon
as Facebook found this violation.
We would all be rightly concerned if the Government of the
United States was making these kinds of decisions. My concern
is all the Big Tech companies now have the same power that
China has to regulate the internet in its country. Instead of
the government doing it, we have allowed Big Tech to do it.
I thank you and look forward to your questions.
[The statement of Mr. Travis follows:]
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Mr. Cicilline. I thank the gentleman for his testimony.
Now, we will proceed under the 5-minute rule. I will begin
by recognizing Mr. Neguse from Colorado for 5 minutes.
Mr. Neguse. Thank you, Mr. Chair. Can you hear me?
Mr. Cicilline. Yes, we can.
Mr. Neguse. Okay. Great.
Thank you, Mr. Chair and Chair Nadler for holding this
timely hearing to examine legislative proposals to help local
journalism and small publishers compete in the digital
marketplace. I want to thank Chair Cicilline, you, in
particular, for your leadership in this area.
Colorado, which is the State that I represent in Congress,
is all too familiar with the decline and closure of local
newspapers outlets. The Rocky Mountain News closed a little
over 12 years ago. The Rocky, as locals affectionately called
it, was a newspaper before Colorado was admitted into the
Union. Since then, we witnessed The Denver Post become acquired
by a hedge fund, which led to layoffs and cost-cutting
measures. In the last 10 years, we've gone from having 2 legacy
newspapers with upwards of 500 journalists covering local and
national issues to having 1 legacy newspaper with roughly 70
journalists on staff.
The reason why these trends are concerning is obvious. We
have heard the compelling case from many of the Witnesses
today. It's because local journalism and democracy go hand-in-
hand, and, simply put, the American experiment cannot work if
the voters are not informed on their communities and their
leaders.
So, with that, I want to thank each of the Witnesses for
being here and want to thank them for their thoughtful
testimony.
I want to start with a question that is relevant to my
State. As I mentioned, in Colorado, The Denver Post went
through with massive layoffs and budget cuts once their parent
company was acquired by a hedge fund, Alden Global Capital. One
Post reporter mentioned that the Post had, quote, ``70 people
covering a metro area of about 3 million people.''
Mr. Schleuss, is this situation unique to The Denver Post?
Can you provide the Committee with more context on how the
aggressive squeeze on ad revenues by tech giants really spurs
predatory behavior that we've seen from some of these hedge
funds to essentially gut local news?
Mr. Schleuss. Absolutely.
So, we have seen, as the shift from revenue for a lot of
local newspapers has shifted away from getting a majority of
the revenue from print advertising and less and less, as
digital platforms like Google and Facebook take that up, it's
allowed large private equity groups, like Alden Global Capital,
to swoop in.
So, it's not just The Denver Post but, other places where
we represent Members--the East Bay Times in California, the San
Jose Mercury News in California, the Monterey Herald, and the
St. Paul Pioneer Press in Minnesota.
The goal for a lot of these hedge funds is to get profit
margins up to a point that's not sustainable, get them up above
16 percent, get them up to 20 percent, by getting rid of any
assets, selling off the real estate to other companies in their
control, cutting staff as much as possible.
Right now they're in the process of trying to acquire
another large publisher, Tribune Publishing, which has about a
dozen newspapers from Chicago to Allentown, Pennsylvania, to
Hartford, and to Orlando, Florida. They just want to get
profits up as high as possible and will do that by cutting
staff and cutting local news coverage.
Mr. Neguse. Thank you, Mr. Schleuss.
I guess a follow-up question, the logical extension, would
be: What legislative proposals do you think this Committee
ought to consider helping mitigate against some of these
predatory practices by these companies?
Mr. Schleuss. So, I think looking at just even the idea of
these takeovers and mergers, right, we're at the point where
the industry is super-consolidated and under extreme financial
pressure by just a handful of actors. So, looking at any
potential mergers and finding ways to create legislation that
would incorporate the idea of, how will this affect local news
coverage if this merger were to take place? What would it do to
the local jobs and the economy?
Because when we lose local news outlets across the country,
no matter whether they're in blue districts or red districts,
taxes go up, corruption goes up, and partisanship goes up as
people have fewer and fewer outlets for facts.
So, that would be one effort. Another thing is providing
incentives. Let's get hedge funds out by providing incentives
to get them to donate to foundations or nonprofits so that we
can have sustainable, community-accountable local news.
Mr. Neguse. Thank you, Mr. Schleuss.
With that, again, I would say thank you to the Chair and
also to the Ranking Member for their leadership on this
important issue, and I look forward to partnering with both of
them on this front. With that, I would yield back the balance
of my time.
Mr. Cicilline. The gentleman yields back.
I now recognize the Ranking Member of the Subcommittee, Mr.
Buck.
Mr. Buck. I thank the Chair for recognizing me. I'd ask the
Chair to recognize Mr. Gaetz, and I will ask questions at the
end, if that's okay.
Mr. Cicilline. Of course.
Mr. Gaetz is now recognized for 5 minutes.
Mr. Gaetz. Thank you, Mr. Chair. As usual, your approach to
the way our Americans interact with these monopolistic
platforms continues to be bipartisan and thoughtful, and I
thank you for that.
I'm a cosponsor of the JCPA, but after hearing some of the
testimony, I'm wondering whether I should be. Not every failure
of every local news entity is a failure of democracy. Sometimes
it's just bad news. Sometimes the people who work in local
journalism are the ones creating what Ms. Graham described as
unsubstantiated clickbait. So, we cannot view it that way.
Mr. Greenwald, I have some questions for you. I will
confess at the beginning, though you once said I have, quote,
``the worst ideology in Congress,'' I am a ravenous consumer of
your content. I find it very thought-provoking, and I read you
on Substack frequently.
I want to ask--I want to go into one of the elements of
your testimony where you talked about the potential for the
JCPA to create a stratification within media where you create
more distance between the large media conglomerates, Gannett or
News Corp, and then maybe those smaller, more independent sites
that are also creating good news.
Are you worried that, by trying to remedy the monopolies in
Big Tech, we create greater challenges in the monopolies of Big
Media and make it even harder for independent, gritty
journalism to survive?
Mr. Greenwald. I do worry about that quite a bit,
Congressman Gaetz.
We've listened to many people speak quite accurately about
the State of news industry today, and what we're hearing is not
an idealized or romanticized picture that we might like to
think about of having a diverse and dispersed power throughout
the industry where lots of different voices can be heard, but,
instead, a very concentrated industry, very similar, in fact,
to Silicon Valley, maybe a few steps behind it, such that, if
you empower this industry without including enormous numbers of
big, clear, and concrete safeguards to prevent it, you could
very well be essentially accelerating some of the worst
industry trends, ensuring that, say, hedge funds who control
the industries or media giants that exert overwhelming power,
like The New York Times or digital outlets, can further
entrench their power through this negotiating force that
becomes an antitrust exemption in a way that I am concerned
will both exacerbate the problems the Subcommittee is correctly
identifying as a problem but also forestall the longer-term
solutions of dealing with Silicon Valley monopolistic power
that is at the root of all these problems.
Mr. Gaetz. In that regard, you seem to agree with the
fundamental premise laid out by Chair Cicilline and Ranking
Member Buck.
I mean, you are one of the founders of The Intercept. As a
result of The Intercept not liking some of your criticism of
the political left, you had to leave the entity you cofounded;
you go to Substack to write. Now, even at Substack, there are
efforts underway to cancel and censor journalists who are
critical of other journalists.
So, if the remedy that Mr. Cicilline and Mr. Buck have
proposed is not the right one, what insight would you offer to
get at the core problem?
Mr. Greenwald. The concern I have is that the discussion
and the legislation seem grounded in a premise that the only,
or the primary, problem, both local and national journalism, is
that Google and Facebook are vacuuming up advertising revenue
and that, if you simply fix that problem, the problem of media
failure will be rectified as well. I don't think that's true.
There's reasons why consumers have turned away from
journalism. I'm concerned that legislation like this can
prevent the self-examination of why journalism has failed so
many people, why people no longer trust it and put their faith
in it.
I do absolutely believe that the problem of Silicon Valley
monopolistic power and its ability to interfere in our politics
and to impede a free press is a very serious one, but,
oftentimes, it's the media itself, it's journalists themselves
who are demanding that power be exercised in a censorious way
that undermines a free and diverse press.
That's why I think that until the problem that this
Subcommittee identified in that report is addressed head-on,
which is breaking up the monopoly powers of this industry, none
of these problems will really be fixed, and oftentimes these
piecemeal solutions can make them much worse by empowering an
industry that's causing many of them in the first place.
Mr. Gaetz. Thank you for that thoughtful feedback.
Thank you for your indulgence, Mr. Chair. I'll submit my
additional questions for the Witnesses for the record, and I
yield back.
Mr. Cicilline. Thank you, Mr. Gaetz.
I just want to make a quick point here if it's okay? I do
think that people should understand that consumers have not
turned away from journalism. They're consuming it at a higher
rate than ever before.
The bill that Mr. Buck and I have put forth, as well as a
number of colleagues on this Subcommittee, provides a temporary
fix for a 48-month period. In fact, anything these larger media
companies would negotiate would be available to the smallest
rural newspaper in any city and town in America, which I think
protects against some of the concerns that Mr. Greenwald
mentioned. So, we've thought about that, and I think the bill
responds to that.
Finally, I'd just say that, with respect to the larger
challenges of antitrust and monopolization, the Committee
intends to be very active on all the solutions contained in our
report. We're not going to do either/or; we're going to do
both. So, I just wanted to reassure the Witnesses of that.
With that, I recognize the distinguished gentleman from the
State of New York, Mr. Jones, for 5 minutes.
Mr. Jones. Thank you, Mr. Chair, and also the Ranking
Member for your bipartisan leadership on this issue.
Of course, thanks to all our Witnesses for your testimony
this morning. I'm glad we have a bill before us, as I alluded
to, with such strong bipartisan support.
Since today's hearing is about saving a free and diverse
press, I want to center a topic we haven't heard enough about
thus far, and that is the importance of journalism by and for
communities of color. As the advertising market consolidates,
we need to stand up for the media serving communities of color.
In my district, that means publications like Black
Westchester. AJ Woodson founded Black Westchester with a
mission, and that mission is providing a platform for
Westchester County's communities of color. That's especially
important in Westchester County, which has a long history of
housing discrimination and remains under a Federal consent
decree to desegregate its neighborhoods.
In Westchester, the mortality rate for the county's Black
infants is four times higher than for White infants, and police
arrest 15 times more Black people for cannabis possession than
White people, even though Black people and White people use the
drug [inaudible].
All too often, Westchester official [inaudible] media
organizations weren't reaching communities of color or
listening to them. Today, Black Westchester helps bridge that
gap.
That's why Black Westchester has always been available
online for free. If they put up a pay wall, they'd exclude the
very people they're working to serve. So, to fulfill their
mission, they depend on advertising.
Lately, that ad revenue is harder and harder to come by.
The challenging financial conditions Black Westchester is
confronting are typical of the conditions that similar
publications are confronting throughout the country.
Now, this Committee's 2020 majority staff report is clear,
Facebook and Google wield monopoly power over digital
advertising and, as a result, over the freedom and diversity of
the press and the future of our democracy.
Two Big Tech companies shouldn't have the power to decide
whether and how Black voices or the voices of any other
marginalized communities are heard. That power should belong to
us. Mr. Woodson put the problem perfectly: Quote,
``Independent, free, and diverse press like us, how do we
survive?''
So, Mr. Schleuss, since you mentioned this issue in written
testimony, let me ask you, how would the Journalism Competition
and Preservation Act help local publications by and for people
of color and other marginalized communities?
Mr. Schleuss. So, the recommendation that I put forward
that we actually make sure that we're targeting as much as we
can to jobs would help go in that direction.
I mean, this is a huge problem that we have and one of the
major issues that folks organize unions around, because their
newsrooms actually don't even look like the communities that
they serve, right? The demographics are way out of whack.
So, too, one of the things that Congress needs to focus on
is making sure that there are ways for nonprofit or foundation
support for communities of color, to make sure that we actually
cover and support those voices.
Because it goes back to, whether you have a publication in
a big city or not, in a small town, it's a question of making
sure that there's accountability there, that it looks like the
community, and that it's actually giving that community a
voice, regardless of race or ethnicity.
Mr. Jones. Thanks.
Mr. Chavern, finally, if the fundamental problem of
Facebook and Google are their monopoly power, shouldn't all
options be on the table, including breaking them up?
Mr. Chavern. Oh, certainly. We have been supportive of
certainly the Committee's work on antitrust and the judicial
actions on antitrust.
But a couple things: Those antitrust actions take a very
long time, right? Many of these antitrust trials won't start
for years. We have an immediate problem. To your earlier
question, the ones most in need of collective action are small
and community publishers, including, most particularly,
publishers of color, who are suffering deeply in this broken
marketplace for real, quality journalism.
This is a product that is critically important to
communities. It is more popular than ever. The system itself
isn't rewarding it. That's not just a question of where the ad
dollars go; that's a question of dominance from the two tech
companies.
So, if we want diverse voices of every perspective, we need
a market for news content that works and that sustains new
entrants and diverse voices, and we don't have that now. This
is most particularly a problem for small and community
publishers of every type.
Mr. Jones. Thank you, Mr. Chavern.
Mr. Chair, I yield back.
Mr. Cicilline. The gentleman yields back.
I now recognize the gentleman from California, Mr. Issa,
for 5 minutes.
Mr. Issa. Thank you, Mr. Chair. Thank you for holding this
hearing. I think it gives us an opportunity to look at what is
clearly a pervasive problem.
I have not signed on to this particular solution, and I
have a lot of questions. Probably the most notable question is,
why is this not a joint hearing with the Intellectual Property
and Courts Subcommittee, since clearly what we're talking about
is negotiating over one organization's statutory intellectual
property and finding a solution.
Nevertheless, I'd like to talk primarily to the two
Witnesses who are here in person.
Mr. Greenwald, I'm going to try to make this rapid.
Mr. Travis. Mr. Travis.
Mr. Issa. Oh, Mr. Travis, I'm sorry. Mr. Travis--
Mr. Travis. I've been confused for worse, trust me.
Mr. Issa. Yeah. Yeah. Mr. Travis, thank you.
Have you ever read ``Atlas Shrugged'' or ``Fountainhead''?
Mr. Travis. A long time ago. Yes, sir.
Mr. Issa. Mr. Smith, I assume you have too.
Mr. Smith. Parts of it, a long time ago, yeah.
Mr. Issa. Okay. Well, when I was listening to the
Witnesses, I heard, quite frankly, exactly that. Rather than
the courts deciding an antitrust problem and solution, I heard
government saying--and in the case of both Graham Media and the
NewsGuild, what they were saying was that we need to take an
industry that is losing and we need to give them money from an
industry that is winning to preserve that industry that is
going away.
Notwithstanding, whether that's right or wrong, did anyone
hear anything differently here?
Mr. Smith. Well, what I would say is, while there may be an
element of that, I think there are two dimensions that change
the normal situation:
(1) LWe're talking about an industry that is suffering
because of changes in competition that rightly can and should
be addressed through antitrust law.
(2) LWe're not talking about just any industry under the
sun--
Mr. Issa. No, Mr. Smith, I appreciate that. One of my
challenges is, in fact, that, all the way back with Ayn Rand,
we were taught a lesson, which is that when government starts
to pick winners and losers, there's no end in sight. That's one
of my concerns here, is, are we picking winners and losers? I
think we clearly are.
Now, there's no question at all that these companies own
their intellectual property. In fact, we may want to give them
additional rights to protect that property.
Mr. Smith, I'll pose a question to you. Currently, if
Google searches your copyrights and makes that available, do
you have any objection? Do you need to monetize all of your
copyrighted material that they go through and create searches
for? I'm talking about Microsoft's own copyrighted material.
Mr. Smith. We may not have objections with respect to the
monetization or lack thereof for our content, but we're not in
the news business. So, I don't think that what is true for us
actually is all that relevant--
Mr. Issa. Well--and let's go through the news for a moment.
We'll stick to news for a moment.
In 1982--and I'll go to Mr. Greenwald. In 1982, the
Cleveland Press went out of business, and Cleveland went from
two daily newspapers to one. Was that because of the internet,
as far as you know?
Mr. Travis. No. The internet did not exist in 1982.
Mr. Issa. In fact, were newspapers diminishing and
consolidating throughout the '60s--'90s, rather than expanding,
particularly the classic daily citywide newspaper?
Mr. Travis. I think to a large extent that is true.
When you look--and the broader question that you're asking
is a good one--can you create and fix antitrust violations,
which I think are existing from Big Tech companies now, by
creating an antitrust exemption for others, this is such a
complex issue that seems to me to be a really--I understand the
intent, and I think the intent is a good one. The challenge of
correcting antitrust power by creating antitrust exemptions
seems to me to be an inherent difficulty.
Mr. Issa. I very much agree. I'm not trying to disagree
with the problem, just question some of the solution.
Let me just ask a question for anyone that wants to with
the remaining few minutes. The New York Times, the L.A. Times,
The Washington Post, have any of those organizations ever put
things out in print that were untrue or chose not to print
things which were true?
Mr. Travis. Yes.
Mr. Issa. Okay. So, if they do it, then we're really not
talking about a difference in the case of Facebook or Google or
any of the others. What we're talking about is who did it in
the 18th and 19th century with impunity and who may be doing it
today because of its market power. Is that true?
Mr. Cicilline. The gentleman--the time of the gentleman has
expired, but if the Witness wants to answer quickly, you may do
so, if you understand the question.
Mr. Smith. Well, we're not talking about when or who did
it. We're talking about what laws apply to it. That's what I
would say this is about.
Mr. Cicilline. Thank you.
The gentleman yields back.
The Chair now recognizes Mr. Deutch of Florida for 5
minutes.
Mr. Deutch. Thank you, Mr. Chair.
Mr. Chair, toward the end of his life, legendary journalist
and America's most trusted name in news, Walter Cronkite, said,
``I think it is absolutely essential in a democracy to have
competition in the media, a lot of competition, and we seem to
be moving away from that.''
Over a decade since his death, we can agree that his
warning was an extreme understatement. The harm of the
anticompetitive practices of technology platforms like Facebook
and Google sometimes feels very abstract, but the value of a
free and diverse press, especially local news media, has a very
tangible impact on our lives and on our communities. Local
investigative journalism can root out corruption, bring
attention to issues that matter in our communities but that
don't and will never attract national attention.
In the 3 years since the shooting at Marjory Stoneman
Douglas High School, we saw the story fade from national
headlines, but local outlets like the South Florida SunSentinel
were exhaustively investigating the failures that contributed
to that awful day--important work that was recognized with a
Pulitzer Prize.
Our community has worked, in our shared grief, to keep
alive the memory of the 17 we lost that day--their hobbies,
passions, and character. It's the work of the SunSentinel and
The Palm Beach Post, the Miami Herald, the local broadcasters,
other local news media, that's been an important part of
telling these stories and demanding accountability.
On the other hand, Facebook, Google, and other technology
platforms played an instrumental role in spreading
misinformation and conspiracy theories about the tragic event
that day and many others. I've asked Google and Facebook and
Twitter in hearings before the Judiciary Committee why they
keep giving not just a platform but a megaphone to people who
spread lies about the shooting in my district, the people who
target children, the survivors, and their families.
We need more responsible, high-quality journalism, and
fewer monetized megaphones that some use to attempt to destroy
lives.
Mr. Chavern, how do we rebalance the scale? What are the
main components of making online platforms take more
responsibility for the content they carry and then leveling the
playing field between these publishers and online platforms so
that high-quality content gets elevated over conspiracies and
misinformation?
Mr. Chavern. Great. Thank you very much, Congressman.
Two things. I agree with you, by the way; we want
competition in the news media, but we currently have a market
that suppresses it. It makes it impossible to develop new
entrants and competitive voices, new diverse voices. If you
were going to build a new entrant in local news, you're facing
a marketplace dominated by two companies that suppresses the
value of that content, makes it impossible to have new
entrants.
Secondly, specifically to your point, I have talked in
other contexts about the role that section 230 plays in the
ecosystem and, in particular, the platform's role in amplifying
content, the choices the platforms make to decide what gets
seen and what doesn't get seen.
Too often, the discussion is about whether a particular
piece of content should be labeled or moderated or taken down,
and that avoids the question about what the platforms do, the
choices they make, and the responsibilities they should have
about the choices they make.
So, I would say two things. One, we need a fairer capacity
for news publishers to improve the market for quality news
content, and we have to look at the responsibilities that the
platforms should have for their decisions about amplifying
content.
Mr. Deutch. Thanks. Thank you, Mr. Chavern.
Ms. Barr, I mentioned the harm to communities and the harm
to individuals who are the targets of lies. Your testimony
raised a good point about the damage posed to responsible news
outlets with the placement of responsible journalism alongside
these kinds of lies.
Can you just elaborate on the challenges that it poses to
your business?
Ms. Barr. Yes. Thank you very much, Congressman.
Look, what happens is, we put our stories online, and I can
tell you that roughly 60-70 percent of what we put out there is
referred to us either by Google or Facebook. So, when those
stories sit online adjacent to stories that might be
misinformation or outright lies, clickbait, whatever you might
want to call it, it literally diminishes our reputation and
makes people distrust or causes some distrust.
So, we then spend a lot of time trying to ensure that our
viewers and users understand that we've researched, we have
trained journalists, we know what it is we're trying to say. We
have to also then go back and look at the stories that are
incorrect and make sure they understand that those aren't
believable. It's really difficult because, as we all know, a
lie goes around the world very quickly.
Mr. Deutch. Thanks, Ms. Barr.
Mr. Chair, thank you for holding this important hearing.
Thanks to all the Witnesses. The testimony of every one of
you is really helpful and instructive.
I yield back.
Mr. Cicilline. Thank you.
The gentleman yields back.
I now recognize the gentleman from Oregon, Mr. Bentz.
Mr. Bentz. Thank you, Mr. Chair. Thank you for this most
interesting meeting.
This first question is for Mr. Greenwald.
It's been said about the Newspaper Preservation Act, passed
back in 1970, that it was removing those so protected from the
judgment of the marketplace. It's also been said that it failed
to prevent abusive tactics, failed to help the smaller papers,
did little to improve the quality of the opinions and writings
of newspapers.
Can you share with me the difference between that act, the
Newspaper Preservation Act, and the bill that we're discussing
today?
Mr. Greenwald. Well, I think that this goes to the comment
that Chair Cicilline made after the last time I spoke about how
more and more people are consuming news than ever before, and I
think that, if you ask people inside the news industry,
virtually everybody will acknowledge that the reason for that
is because of what was essentially a sugar high of the last 4
years being one of the most polarized eras in American history
because of the person who was occupying the Oval Office being
so controversial and that, prior to that, there was a
significant decline in the number of people who were trusting
and consuming news content. Ratings were collapsing, local
papers were losing subscriptions, people were talking about The
New York Times going out of business, and there was a kind of
temporary event that intervened to save the news industry, and
that sugar high is now gone.
If you look at data, there's no question that more and more
people, more than ever before, distrust the media precisely
because so much of the disinformation, conspiracy theories, and
falsehoods come not from newly created sites online but from
the very industry that this bill would essentially empower by
enabling them to Act as a consortium.
Mr. Bentz. Thank you. I'm not sure I heard an answer to my
question there, but I'm going to go to Mr. Smith.
Mr. Smith, it's been reported in the press that you were
personally involved in the discussions with the officials in
Australia, including the Prime Minister. What were your
takeaways from your involvement that you think might be most
relevant to the issues we're discussing today?
Mr. Smith. Well, thank you. I actually think that there are
some important takeaways from Australia that are very relevant
to the conversation taking place.
I'd actually go back to what Mr. Issa asked, is this about
picking winners and losers, and I would say, no, it is not.
Basically, Australia was addressing an issue similar to the
United States. The reason that publishers cannot negotiate
collectively is because of laws passed by Congress, the Clayton
Act and the Fair Trade Commission Act. So, what Australia did
was give publishers the ability to negotiate collectively.
So, that's what this Congress would do. It would, Mr. Issa,
going back to your point, by passing the JCPA, not pick
somebody new but address the unintended consequences of what
Congress did in the past when it crafted antitrust laws that
got in the way of these collective negotiations.
Now, the other thing that I think is very interesting and
relevant from Australia is this. What we're funding is that the
big publishers are not interested in negotiating collectively.
The three largest news organizations in Australia are all
negotiating separately. It is the small publishers that are
negotiating collectively. I basically believe that if this
Congress passed the JCPA you'd have 4 years to test the
situation but in all probability that's what you would find
here as well.
Mr. Bentz. Thank you.
Mr. Chair, I yield the balance of my time to Mr. Issa.
Mr. Issa. Thank you.
I'd like to follow up on exactly what you said. Let's
presume for a moment that we like this bill, and we were going
to pass it. Is there any reason that you wouldn't limit the
collectives to companies that would be under a certain amount
of size--in other words, limit it to those who inherently have
limited market power? Because, here, The Wall Street Journal,
The Washington Post, and others probably would turn away and
say, no, we've got that handled.
Mr. Smith. If that is an issue that concerns you, I think
that there are two alternatives to address that. One is to pass
the bill as drafted and you have 4 years and then it expires,
or you renew it. The other is to craft some exception so that
it only applies to, say, a publication below a certain revenue
threshold.
Either way, I think you are accomplishing what I believe is
your fundamental goal, which is to enable the small
publications of the country to be able to negotiate
collectively.
Mr. Issa. Well, you know, there's no smaller business, in
most cases, than a recording artist. So let me ask one quick
question--
Mr. Cicilline. The time of the gentleman has expired.
Mr. Issa. I would love to have, but--
Mr. Cicilline. Maybe someone else can yield their time,
but--
Mr. Issa. Thank you, Mr. Chair.
Mr. Cicilline. --the time of the gentleman has expired.
I now recognize the gentleman from New York, Mr. Jeffries,
for 5 minutes.
Mr. Jeffries. I thank the distinguished Chair for yielding
as well as for your leadership on this issue, along with the
distinguished gentleman from Colorado, the Ranking Member.
Justice Brandeis once observed that, in America, we can
have democracy, or we can have wealth concentrated in the hands
of the very few but we can't have both. I think it would be
fair to say that it also seems to me to be the case that, in
America, we can have democracy, or we can have the emasculation
of the free and fair press, particularly at the local level,
but we can't have both.
As the Framers crafted this Republic--clearly, it is not a
perfect Union; we're on the march toward a more perfect Union.
They never promised a perfect country. They were imperfect
themselves. They clearly understood the connectivity between
the free and fair press, our democracy, liberty, and the
Republic that they were building. There's a reason why the
freedom of the press is in the First Amendment, not the 5th,
10th, 15th, 20th, and thereafter.
So, I appreciate this hearing and the importance of it to
our democracy. It seems to me to be an existential question.
Ms. Barr, you testified that the market power of the tech
platforms undermines the online advertising model for local
broadcast journalism. Can you elaborate on that particular
point?
Because I think what's being said is not that technology
has changed and you no longer can receive revenue from the
traditional print publications; it's that, even in the context
of shifting to the digital platform, the current construct
undermines your ability to secure advertising revenue. Can you
elaborate on that?
Ms. Barr. Yes. Thank you, Congressman Jeffries.
So, what I meant by that is, in the current situation, a
lot of our viewership, which used to be on television, on
linear television, has shifted to usership, if you will,
online, and, in so doing, we've seen our ratings on TV go down.
While we do have more people accessing us online, the value of
the advertising that we receive back online is a fraction of
what we've lost on the television side.
So, we're spending considerably more money to produce and
support what goes online. It's not just taking the 6 o'clock
news and putting it online. We're literally creating new
content for online. We're doing it at great cost, without being
able to return the same kind of revenues. So, as a result,
we're just spending more to get less.
Mr. Jeffries. Thank you.
Mr. Smith, I appreciate your testimony and the support of
Microsoft for this legislation. As I understand it, this could
in some ways impact your business model, perhaps in a somewhat
adverse fashion.
So, I'm interested, Mr. Smith, in your assessment as to why
the company has taken this position and why you think
ultimately, it's a good thing for the country, democracy, and
perhaps even the free and fair flow of commerce.
Mr. Smith. Well, it's clear under the definitions in the
legislation as drafted that news organizations would have the
right to negotiate collectively with Microsoft because we would
be an online content distributor. We meet the threshold of
having more than a billion users per month for all our online
services and websites put together. We do business with news
publishers today. As I mentioned in my written testimony, we
have an app, we have a service. We do business with hundreds of
publishers. We serve that to millions and millions of people,
and we share revenue. If this bill is passed, that means that
these news organizations would be able to negotiate
collectively with us. I assume that they will negotiate
effectively with us.
The reality is--and I said it at the end of my written
testimony--what we're talking about here--and I thought your
reference to the First amendment captured it perfectly--is far
bigger than us. It is far bigger than technology. It is more
important than any of the products that any of us produce
today. Let's hope that, if a century from now people are not
using iPhones or laptops or anything that we have today,
journalism itself is still alive and well. Because our
democracy depends on it.
Mr. Jeffries. Thank you, Mr. Smith.
I yield back.
Mr. Cicilline. The gentleman yields back.
I now recognize the Ranking Member of the Full Judiciary
Committee, Mr. Jordan from Ohio, for 5 minutes.
Mr. Jordan. Thank you, Mr. Chair.
I would slightly disagree with the statement of Mr. Smith.
What our democracy depends on is the First Amendment, not
necessarily--journalism is fine and it's all part of it, as
long as they're actually adhering to the First Amendment.
Mr. Travis, at the end of your statement, you said, ``I'm a
First amendment absolutist, and I believe cancel culture
intertwined with identity politics is the greatest threat to
our country.'' I could not agree more.
Do you have a functioning First amendment when only one
side is allowed to talk? Do you have free speech when Big Tech,
Big Media, and Big Government decides what can be said and what
can be seen?
Mr. Travis. No, you don't.
Mr. Jordan. Not at all.
Mr. Travis. Not at all. I think that is the major issue
that our country is facing today.
Mr. Jordan. Yeah. More important that this broad concept of
journalism, which I'm all for, it's the First Amendment, the
right to speak and to speak in a political nature and not be
censored for speaking out in a political fashion. Is that
right?
Mr. Travis. Yes, sir.
Mr. Jordan. Mr. Chavern said in his opening statement that
this bill would have high-quality, professional journalism
would be able to form in this consortium and cartel.
Is OutKick high-quality journalism?
Mr. Travis. I would like to think so. Some would disagree.
Mr. Jordan. Who gets to decide? Who defines what's high-
quality journalism?
Mr. Travis. Well, I think that's one of the big challenges,
is determining what is and what is not high-quality journalism.
Some of the most high-quality journalism that we have seen over
the years that has been praised has ended up not being true.
That is why we need such a robust First amendment in
general, so that our battles--the marketplace of ideas is now
being artificially constrained, which is what I believe is
happening now.
Mr. Jordan. The market's supposed to decide and define what
is high-quality journalism. The First amendment decides that,
not government. Is that right?
Mr. Travis. I think that's correct. Yes, sir.
Mr. Jordan. You said something earlier too. You said, who
fact-checks the fact-checkers? Who's supposed to do that?
Mr. Travis. It's fascinating. In my example, Facebook has
flagged two different stories at OutKick as disinformation and
destroyed our traffic as a result.
The first one was linking to the CDC website. We appealed
and said, how can you make this determination? The second one,
as I said, was pretty straightforward. We linked to a Wall
Street Journal editorial from a high-end medical scientist
analyzing COVID.
Both of those were flagged. We lost hundreds of thousands
of dollars in revenue because of Facebook's fact-checking
decision. There was no appeals process. They don't even bother
responding to us.
Mr. Jordan. In a general sense, Mr. Travis, isn't it
supposed to be the First amendment that also fact-checks the--
Mr. Travis. The--
Mr. Jordan. It's more speech, right? I mean--
Mr. Travis. Yes.
Mr. Jordan. --a number of Democrats have quoted Justice
Brandeis. Justice Brandeis said, if there's, quote,
``misinformation or disinformation out there, the answer is not
to squelch that and stop that; the answer is to allow more
speech to happen''--i.e., the First Amendment, correct?
Mr. Travis. That is the entire theory of Justice Brandeis's
view of the First amendment and the entire basis of the
marketplace of ideas.
Mr. Jordan. Mr. Chavern, do you think The London Times
thought Thomas Paine was a high-quality journalist?
Mr. Chavern. I'm not sure I could answer that. I'm not sure
how to respond to that, Mr. Jordan.
What I can say is that I represent a vast array of points
of view in my Membership, and--
Mr. Jordan. Okay.
Mr. Chavern. --every one of them has a problem with the
marketplace for their content that they invest in greatly. It's
not working for any--
Mr. Jordan. I'm not saying there's not a problem. I'm all
for using antitrust to go after the Big Tech companies. I'm all
for doing 230, something we could do right now. We could repeal
230, take away the liability protection. We could do that right
now if Democrats wanted to do that. We certainly do. We've
introduced that legislation. I'm all for doing that.
What I'm nervous about is this alliance between Big
Government and Big Tech that Mr. Greenwald talked about.
I also wanted to go to Mr. Greenwald and talk about this
other alliance which I think is just as frightening, and that's
the alliance between Big Tech and Big Government--Big Tech and
Big Government.
In your statement, Mr. Greenwald, near the end of it, you
said: ``A mere 2 months after Parler ascended to the top of the
charts, Members of Congress demanded that Apple and Google
remove Parler from their stores and ban any further downloading
of the app.''
We've seen maybe a better example. Just a couple weeks ago,
Mr. Greenwald, we saw two Democrats send a letter to AT&T
telling them to take certain networks off their--not be a
carrier for certain networks.
I just want to read something and get your reaction to
this. Because Mr. Travis said earlier, Mr. Greenwald--Mr.
Travis said, we would all be rightly concerned if government
was censoring speech and not Big Tech, but, frankly, it's both.
Big Government is censoring speech, too.
Because we had two Members, Democrat Members of Congress
write to AT&T, and they said, ``we want a specific answer to
this question: How many of your subscribers tuned in to FOX
News, Newsmax, One America News on U-verse, DIRECTV, AT&T TV
for each of the 4 weeks preceding the November 3, 2020,
election? Please specify the number of subscribers that tuned
in to each channel. So, basically, tell us who your customers
are, how many you have, and what they were watching.''
Mr. Greenwald, do you find that a little creepy and
frightening like I do?
Mr. Cicilline. The time of the gentleman has expired, but
the Witness may answer the question briefly.
Mr. Greenwald. Very briefly, it goes to the heart of the
concern that I have, which is, I think there's a huge mismatch
between the rhetoric that is being offered to justify this bill
and what the bill does. If the concern is the failure of local
newspapers, then give them the power to negotiate collectively,
but not Big Media, which is so often embedded in the same
problems that this Committee is discussing.
Mr. Cicilline. The time of the gentleman has expired. He
yields back.
I now recognize the gentleman from Maryland, Mr. Raskin,
for 5 minutes.
Mr. Raskin. Mr. Cicilline, thank you, Mr. Buck, thank you
for your leadership on this legislation.
Mr. Chavern, in the district that I represent, we've lost a
ton of local newspapers in Montgomery County, Frederick County,
and Carroll County. I remember, when I got to Annapolis as a
State Senator, there were, I think, four reporters from The
Washington Post. One covered the State House, one covered the
State Senate, one covered the executive, and one covered the
State courts. Today, they've got one reporter trying to cover
all State government. That creates a serious problem in terms
of transparency and integrity and corruption.
So, this goes right to the heart of why we have a First
amendment in democracy. It's all about self-government and
making sure that people understand what government is doing.
If we pass this legislation, is there actually hope of
reviving local papers, or are we just trying to arrest the
erosion in the numbers of journalistic entities that exist
right now?
Mr. Chavern. Oh, absolutely revive.
I mean, what you're seeing is, the audience for that
product is bigger than ever. The engagement with audiences is
intense. Again, you're looking at an industry that has many,
many more readers than it ever did in whatever the golden print
era was.
The finances are much, much worse. So, the reason why that
is: The digital intermediaries, Google and Facebook, in
particular, that stand between us, and our audience take most
of that value. That has to be addressed.
Mr. Raskin. Mr. Chavern, some of our colleagues have been
railing about what they call ``cancel culture.'' I just made a
quick list off the top of my head of some people that right-
wing conservatives have tried to censor or cancel, privately or
publicly, or defund or boycott.
Here are some of them: Congresswoman Liz Cheney, who they
tried to kick off of her Chairship of the House Republican
Conference; Senator Bill Cassidy from Louisiana; Senator
Richard Burr; any of the 17 Republican Members of Congress who
voted to impeach and convict Donald Trump for inciting violent
insurrection against the Union; ABC; ACORN; TV host Samantha
Bee; Campbell's Soup; the Dixie Chicks; The New York Times
reporter Sopan Deb; comedian Kathy Griffin; Guinness; Hallmark;
CNN commentator Marc Lamont Hill; Nike; Pepsi; The New York
Times; the words ``climate change'' and ``science-based'' in
numerous government agencies and documents; Starbucks; Target;
and on and on and on.
So, do you find that the cancel culture is limited to one
side of the political spectrum, or do you think there's a lot
of right-wing cancel culture out there which really got this
whole--all the engines of censorship revved up?
Mr. Chavern. Congressman, I come at this, again,
representing the people creating quality journalism. The best
answers for all this is to have the most amount of good
information, good journalism out there possible.
We currently have a system that devalues that content and
constrains our capacity to deliver good information. And the
best answer is a diversity of journalism in the system.
Mr. Raskin. Thank you.
Finally, Mr. Smith, it's fascinating that you are here
advancing the position you have.
First, can you tell us how your quasi-monopoly power today
to negotiate with isolated, nonorganized media publishers gives
you a bargaining advantage?
Then, if we do pass this legislation, do you think this is
a transitory and transitional problem, or do you think it's
systemic and structural and we're going to need to keep
something like this going forward indefinitely?
Mr. Smith. Well, I would focus on two things.
First, I would focus, frankly, more on the needs of the
smaller publishers. If you're a small news organization, if
you're one of these 1,500 local county-based publications, I
just think it's a lot easier to have somebody negotiate
collectively on your behalf, it's a lot easier to have legal
counsel work out the terms and conditions. Yeah, I just think
you're going to enable them to pursue the kinds of agreements,
whether it's with us or others, more easily and effectively.
Will the--
Mr. Raskin. It is--there's a provision in the legislation
which says that it's got to benefit the entire industry, rather
than a few publishers, and it's got to be nondiscriminatory
with respect to other publishers.
Isn't that right? Doesn't that take care of some of the
problems that some of our colleagues have been raising about
how this might entrench a new media establishment?
Mr. Smith. I think that is helpful, and I think it's
important and it's good for you to point it out.
I would also just add, in response to your earlier
question, I don't think that anybody really thinks that this
one thing is a panacea. There are more steps that are going to
be needed. I agree with Mr. Greenwald that there are other
issues that need to be considered by Congress.
Let's face it: This is not a problem that government alone
can solve. Journalism will have to continue to evolve. Tech
companies, like my own, are going to have to find new, creative
ways so that journalism and technology can find some way to
flourish together in a way that's not happening yet.
Mr. Cicilline. The time of the gentleman has expired.
Mr. Raskin. I yield back.
Mr. Jordan. Mr. Chair?
Mr. Cicilline. I now recognize Mr. Steube for 5 minutes.
Mr. Jordan. --unanimous consent?
Mr. Cicilline. Oh, sure. The gentleman is recognized for a
unanimous consent--
Mr. Jordan. Thank you. I ask unanimous consent to enter
into the record an article from last night from Breitbart,
``Congress Wants to Give the Establishment Media a Massive
Handout.''
Mr. Cicilline. Without objection.
[The information follows:]
MR. JORDAN FOR THE RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Jordan. Thank you.
Mr. Cicilline. The Chair now recognizes Mr. Steube for 5
minutes.
Mr. Steube. Thank you, Mr. Chair.
After years of allowing false information about President
Trump and the false Russia collusion information that we saw
perpetrating across the American sphere, social media platforms
then decided to ban legitimate content about Hunter Biden.
This is disturbing because it's a reflection of the role
these companies wish to play in dominating civic life and
public discourse, when, at the same time, The Washington Post
and The New York Times haven't been the best fact-checkers. A
concern of mine is that, in addressing social media's dominance
over the news, we will just end up allowing a different set of
actors to do the same thing.
My questions are for Mr. Travis and for Mr. Greenwald. How
can we tackle this issue to create a fair playing field that
promotes free speech and does not suppress ideas that are out
of favor with elites in this country?
Mr. Travis. I think it's one of the most fundamental issues
of American society today. How do you determine what stories
are able to be shared and what stories are able not to be
shared?
Frankly, I don't consider it partisan at all that, when the
New York Post has its Twitter account absolutely shut down
because of the news story that they are putting out and all Big
Tech corresponds in conjunction together, that's the very
definition, to me, of antitrust action.
I wrote in my testimony, and I wanted to just hit it, I
mean, think about how crazy it is that all the tech companies,
in concert, whether you agree or disagree--and I come to this
from a completely nonpartisan issue. Whether you agree or
disagree with what the President of the United States at the
time, Donald Trump, was doing on social media, everyone out
there should be terrified of how quickly everyone shut him
down.
Listen to this. In January of this year, Facebook, Twitter,
Google, Spotify, Snapchat, Instagram, Shopify, Reddit, Twitch,
YouTube, TikTok, and Pinterest all either banned or restricted
the democratically elected President of the United States from
speaking to the country on their platforms.
Right now, Donald Trump may be the focus, but Big Tech has
set the precedent that, if they want to shut anyone down, even
the most powerful person in all democracy can be shut down.
So, how do you regulate the power that Big Tech has
grabbed? I think the question that you're asking is probably
the most central and important question that confronts our
country today, because Trump will not be the last figure to
have this happen to him. That's my concern.
Mr. Steube. That's a great point you bring out.
Mr. Greenwald, do you want to add anything to that?
Mr. Greenwald. Just briefly, that there are representatives
of my industry and my profession here with me testifying, and
often what we hear is, well, we're professional journalists,
we're here to combat disinformation and ensure free and diverse
viewpoints that are aired. So, often the reverse is true.
If you look, for example, at what happened in that Hunter
Biden banning by Twitter and Facebook, the argument that was
advanced by those companies to justify it was that the
materials reported by the New York Post were, quote, ``Russian
disinfor-
mation.'' That came from news media outlets saying that, and
everyone now knows that that is untrue. Even the FBI
acknowledges Russia played no role in that and that the
documents were genuine.
So, often, the most damaging conspiracy theories and
disinfor-
mation come from the most prestigious news outlets--obviously,
the most destructive case being the claims that were made that
led the country to invade Iraq.
So, I think that the concern I have is that, if we adopt
this narrative that the reason media outlets are failing is
only because of Google and Facebook, we allow this industry
that needs so much self-examination to essentially be off the
hook.
If you allow the biggest players--The New York Times, Jeff
Bezos's Washington Post--to be at that table and give them an
antitrust exemption, you're essentially creating now two
consortiums instead of eliminating the one that's at the root
of all the problems.
Mr. Steube. Well--and I personally believe that, until we
address section 230 reforms and liability protection reforms
that these companies have, that we're never going to see a
change in the behavior. Because if we simply just split up the
companies, they're still going to Act and behave in the manner
in which they're acting, because they have liability protection
to do that.
I would encourage any of my Democratic colleagues on this
Committee or on the Full Committee, if you want to work
together on that issue, I have a bill. Would love to sit down
with you and talk to you about it.
My time has almost expired. I yield back, Mr. Chair.
Mr. Issa. Would the gentleman yield?
Mr. Cicilline. The gentleman's time has expired. Oh, I'm
sorry, he has 6 seconds.
Mr. Issa. Okay. If I could have back the 9 of when I said
it, I'd be thrilled.
Mr. Cicilline. Well, he hasn't yielded yet, so the time has
now expired.
Mr. Issa. I thank the gentleman.
Mr. Cicilline. I mean, if you have a quick point you want
to make, Mr.--you've had two opportunities to speak. I'm trying
to be fair.
Mr. Issa. I just wanted to add on to his question very
briefly for Mr. Greenwald. If we have collective negotiations
for small--
Mr. Cicilline. No, no. Mr. Issa, I'm sorry, I'm not going
to let you ask another question at 18 seconds beyond the time,
so--
Mr. Issa. Mr. Chair, I was just going to ask--
Mr. Cicilline. Maybe someone will have an opportunity to
yield to you.
I now recognize the gentlelady from Washington, Ms.
Jayapal.
Mr. Issa. Chair, if I could inquire from the Chair?
Mr. Cicilline. Yes.
Mr. Issa. Within your legislation, would bloggers and other
people who view themselves as journalists--
Mr. Cicilline. Mr. Issa, I'm happy to have a conversation
with you offline. We have Ms. Jayapal. It's her time. She's
recognized for 5 minutes.
Ms. Jayapal. Thank you, Mr. Chair.
This is such an important hearing on the consequences of
failing to protect the backbone of our democracy, our free and
independent press.
In Seattle, we're very fortunate. Even though we've lost
many of our newspapers, we do have one of the few remaining
family-owned newspapers in the country, and they've taken the
leadership in the creation of a new national initiative called
Save the Free Press.
Even for a larger newspaper like The Seattle Times, the
struggle to compete against Big Tech is serious, from the loss
of ad revenue, the forced provisions that tech platforms impose
on them, and the coopting of locally produced news content with
little to no compensation by Big Tech news aggregators.
Mr. Smith, you've departed from some of your tech-leader
colleagues in not only saying that government must play a role
in regulating Big Tech but then actually holding to that. In
fact, I remember during our hearing with the four CEOs last
year, several of them said that they welcomed government
regulation.
Let's talk about what just happened in Australia when the
government passed a law to require Big Tech platforms to
negotiate with and compensate news platforms for the content
they produce. Google decided to play hardball and shut down its
operations in Australia. They argued that Australia's news
media bargaining code would undermine the open internet.
Microsoft, however, supported Australia's news media
bargaining code. Can you tell me why and, quickly, what
happened when you voiced your support?
Mr. Smith. Well, yeah, one of the reasons I suppose I'm
here is because we got drawn into the same issue in Australia.
We weren't really part of it until Google told the Nation of
Australia that, if its legislators passed a law that is not
entirely dissimilar from this one, it would boycott the entire
country.
We looked at the law, and we read it, and we thought, well,
it seems pretty reasonable to us. So, Satya Nadella, our CEO,
and I called the Prime Minister, Scott Morrison, and we said,
look, if Google wants to leave Australia, we'll stay, and we'll
increase our investment, and we'll abide by the law, we'll
share revenue with journalists, we're happy to run a search
business at a lower margin than Google, and we think that
there's some room for all of us to succeed together. Within 24
hours of my going on Australian television to endorse the law,
Google called up and said they would reverse course and stay
instead.
Look, to be honest, I think that is a challenge we have to
look at head-on. When companies start threatening countries and
saying that if their legislators pass laws, they don't like
they'll pull up and leave, then something seems a little out of
whack.
I think, trying to restore what has always been the case,
which is namely that no one should be above the law--no person,
no government, no company, or no technology--that's in part
where this started, I think that's in part where this needs to
go, and, along the way, let's please ensure that journalism can
do what it needs to serve all of us.
Ms. Jayapal. Thank you, Mr. Smith.
Mr. Chavern, Google argued that the Australian media
bargaining code imposes essentially what's been referred to by
some as a link tax. What do you think about that argument?
Mr. Chavern. It was just wrong. There's no link tax in the
legislation. Particularly, all the rhetoric around breaking the
Internet was just flat wrong. The fact of the matter is, what
it really asked for was a fair deal between news publishers and
Google across the whole range of Google products.
Really, the test is now in terms of how Google is going to
address the massive, small publishers in Australia and really
use the code. We're looking forward to seeing that outcome. No,
it wasn't a link tax, and we have nothing here about a link tax
at all.
Ms. Jayapal. Thank you.
Mr. Schleuss, in your testimony, you emphasize that mergers
between major media companies have eroded news feeds across the
country, and the power of Big Tech mirrors a broader crisis of
consolidation across news industries, and, indeed, our entire
economy.
In addition to scrutinizing these mergers, what are other
solutions that the Committee should consider, and are there
other funding models that we should actively be promoting as
well?
Mr. Schleuss. Yeah, I think so. One of the major things,
right, is making sure that whatever we do is tying into actual
jobs in local journalism, because we have seen that whether
companies are just going to be making a bunch of money by
pushing profit margins as high as possible or if they get a
blank check from platforms, we don't necessarily have any
accountability or transparency to make sure that they go to
jobs.
I think more regulations to try to limit hedge funds in the
space would be really key, because as folks have said before,
one of the ways that we can save the solution and solve it is
by providing more competition in the market by providing more
and more local news jobs. I also think that like finding ways
to support nonprofit and sustainable organizations is a way
about that as well.
Ms. Jayapal. Excellent. Thank you so much for those
important comments.
Thank you, Mr. Chair, I yield back.
Mr. Cicilline. The gentlelady yields back.
I now recognize the gentleman from North Carolina, Mr.
Bishop for 5 minutes.
Mr. Bishop. Thank you, Mr. Chair.
Mr. Smith, I see an irony in your testimony in that you are
here as a representative of the tech industry that has been
through anticompetitive structuring practices is damaging a
free press. You embrace the idea of granting a countervailing
license to engage in anticompetitive activity to the media to
address that.
Isn't the answer to correct the failure of antitrust law
vis-a-vis Big Tech rather than to inculcate anticompetitive
behavior in yet another industry?
Mr. Smith. Well, I would say two things. First, I don't
think that thinking about one thing is meant to suggest that
one should exclude other things. Most problems require more
than one solution, and I don't think this is an exception.
I would just go back to basics. Why did Congress pass the
Clayton Act and the FTC Act in the first place? To encourage
competition, to protect competition. There are times,
especially when laws or decades or a century or older that they
have unintended consequences. There is an unintended
consequence, and now you can redress this in a very--
Mr. Bishop. Well, thank you, Mr. Smith. That's exactly what
I'm concerned about. So, let me go to Mr. Greenwald and ask
you, the Chair said in response to your comments, Mr.
Greenwald, that we're going to both attack the anticompetitive
practices of Big Tech and give an antitrust exemption to media
content producers. Wouldn't it be preferable only to do that
which will improve the competitive environment and forbear from
regulation that might have unintended consequences that would
concentrate power or permit any competitive activity by
particularly big media outlets?
Mr. Greenwald. I think that's exactly correct. One of the
reasons why I was so excited about the report issued by the
Subcommittee in October was because it was designed to finally
address the problem that is a serious menace for the health of
our democracy, which is anticompetitive behavior on the part of
one industry. So, to have the solution be to empower another
industry that has immense problems of its own and that often
works hand in hand with that tech industry, be able to
replicate those problems, makes little sense to me. Especially
because the Chair said, and he is right in theory, that while
if we do this it doesn't preclude us from then doing this
broader agenda.
The political reality is that if you start giving the
powerful industries like the media a reason to stop caring
about Big Tech monopoly--because now they have what they want
which is licensed to do the same thing--you are going to be
diluting local support for these broader solutions.
Mr. Bishop. Thank you, sir.
Mr. Chavern, quickly, if small and diverse outlets are
those that are most in need of protection, why grant an
antitrust exemption to The New York Times, Washington Post,
MSNBC, CNN, and FOX News.
Mr. Chavern. Well, fundamentally, though, the larger
outlets have the--already have the capacity and some degree of
leverage to get their own deals and arrangements. Again, we saw
with News Corp, by the way. People talk about News Corp a lot.
News Corp currently has a global deal with Google. This bill is
not about News Corp, first and foremost.
The whole industry itself, from the largest to the
smallest, but particularly the smallest are in the subservient,
a deeply subservient relationship to two companies that have
been allowed to grow and dominate those spaces with completely
hands-off approach from the government for too long. We need an
answer now.
Mr. Bishop. Yeah, I get your point. I think picking up the
right answer is the right--is what we need to be doing.
Mr. Travis, finally to you, Mr. Raskin in his question
suggested that sort of criticism and condemnation is the same
as cancel culture. I value robust and unlimited criticism like
North Carolina Republican Party censure of Senator Burr for his
impeachment vote, for the revolt of Kathy Griffin's holding
aloft the apparently severed and bloody head of a sitting
President. Isn't cancellation something different where you
destroy somebody's career, position, or livelihood in
retaliation for a particular view?
Mr. Travis. Yes, I think it's a well-put question. To me
cancel culture is the difference between, ``I disagree with you
because'' and ``I disagree with you, and you don't have the
right to make a living because of your opinion.''
Cancel culture takes it beyond the debate and goes to
actually trying to cut someone out of the debate completely.
Argue about ideas, argue about decisions don't, in my opinion,
take the next step and say, ``And your position invalidates you
from being able to be involved in the conversation at all.''
Mr. Bishop. Thank you, Mr. Travis.
I yield to Mr. Issa.
Mr. Issa. I thank the gentleman, but I don't think it will
be sufficient for the Chair. I appreciate it, and I yield back.
Mr. Bishop. Thank you, sir. I yield my time.
Mr. Cicilline. The Chair now recognizes the gentlelady from
Florida, Ms. Demings, for 5 minutes.
Ms. Demings. Thank you so much, Mr. Chair, and to the
Ranking Member as well for this very important, I think,
hearing during such a critical time as we discuss these issues.
I also want to thank our Witnesses for being so thorough and
informative this morning.
I think we're all in agreement that the way we consume news
has changed tremendously through the years. Mr. Jeffries
touched on this a little bit with Ms. Barr, but I want to ask
this question to Mr. Chevron in a somewhat different way. We
know that the majority of Americans now get their news,
basically, through online platforms. Many of the newspapers
have made that shift. They have more and more online
readership. Could you please talk a little bit about why they
still continue to struggle?
Mr. Chavern. Certainly, and thank you for the question.
Most of our Members from the smallest to the largest are
primarily digital businesses, and they certainly see their
future as delivering news contents online to, by the way,
bigger audiences than ever. The trouble is they're delivering
into an ecosystem that is dominated by two companies.
I call Google and Facebook our regulators because they
regulate everything about our interaction with our consumers.
They suppress the value of our content, and they make it
incredibly hard for there to be, not only existing publishers--
but if you want to be a new entrant or have a different point
of view or represent a different community perspective, it's
basically an impossible market in which to build a business,
and that has to change.
Ms. Demings. Thank you. You have also talked about, or we
have heard that collective bargaining efforts really only
benefit the largest of countries--or companies and kind of
leave the smaller guys out, if you will. Could you talk about
how collective bargaining, how can we ensure that collective
bargaining efforts would also benefit the independent and
smaller organizations?
Mr. Chavern. Yeah, absolutely. I mentioned this in my
written testimony for the Committee. The collective action
primarily benefits those who don't have another way to assert
their value. Right? It is a primary benefit for small and local
publishers to be able to fight for themselves.
As we saw in Australia, by the way, what happened is as Mr.
Smith noted, the larger publishers had some capacity to get
their own individual deals. How the code itself--the code is
primarily impacting smaller community publishers who were able
to band together and have a voice. Because without that, they
have really no hope.
Ms. Demings. Thank you so very much.
Mr. Schleuss, I think it's interesting that we are having
this conversation today. As I am reading the Kerner Report,
again, trying to understand some of the challenges that we face
in our country. I know that NewsGuild has been critical of
consolidation. Could you please explain a little bit how
consolidation actually impacts diversity in newsrooms?
Mr. Schleuss. Absolutely. So, we represent in your
district, folks at the Orlando Sentinel, and along with them 16
other newsrooms across the country, just in that one group.
Consolidation, when big companies gobble up these smaller local
news outlets, whether they're online or in print, what they do
is they'll pull out copy desks, they'll pull out design work,
and they'll sift that to these like hubs. Those hubs are
usually filled with people who don't know the local names of
streets or politicians and can't actually do the editing and
the design work.
So, it reduces the local jobs in the communities by
shifting them to these hubs, but it also reduces the local
accountability because it removes those kind of voices and
those who know their communities.
Ms. Demings. Mr. Schleuss, if you could, I know you
mentioned earlier those 2,100 newsrooms across the country have
shut down; 36,000 journalists are not working. So, as we end on
this discussion about diversity, could you also just talk about
the impact, who those people are, and why it makes a difference
that diversity is considered, but also the impact on the true
and balanced and unbiased journalists that people desperately
need in this country.
Mr. Schleuss. Right. I mean one of the kinds of really
alarming statistics that I think is that there's--with the
consolidation, there's also more consolidation of journalist on
the coast right? So, 1 in 5 working journalists in this country
lived in one of three cities: New York, Washington, or Los
Angeles. Those communities only represent 13 percent of all
America's workforce. So, we're losing those local voices, and
we're losing them at an alarming pace that needs to change.
Ms. Demings. Thank you so much.
Mr. Chair, I yield back.
Mr. Cicilline. The gentlelady yields back.
I now recognize, Ms. Spartz, the gentlelady from Indiana
for 5 minutes.
Ms. Spartz. Thank you, Mr. Chair. I think Alexis de
Tocqueville was brought up at the beginning of this meeting,
and I wanted to tell you that as someone who is a big fan of
him, and, actually, his books should be recommended really in
American schools, recommended reading in certain schools back
in Ukraine is probably one of the big reasons why I am in
Congress today.
I wanted to quote him, he said, ``The American republic
will endure until the day Congress discovers that it can't buy
the public with the public's money,'' and gives a very valid
statement.
To go back to the discussion today, I actually add my name
onto this bill because I believe I would like to have a
bipartisan discussion on the issue, and I believe we still have
to work to do. I appreciate Congressman Cicilline and Buck
working on this. I think this is--we had some discussion what
this potential issue could be? Could we actually give more
power for collusion from some larger stakeholders in this
industry, or we can have also, more dictatorship of opinion and
excuses why some of the people--I know I told media is not
really represented on this big search engine.
So, my question is what are the ideas and thoughts you
have? I know maybe we should go further. When I work on reform
and healthcare, we had a lot of issues with employment,
noncompete provision between hospitals and doctors, and some of
the reporters brought up similar issues in media industry.
So, we also need to look at that proper due process for
appeal to see what will happen with parlance and some other
conservative applications, or even some other applications and
try to get on this platform.
So, my question is for Mr. Travis, Greenwald, and Smith, if
you can quickly just say what other things we really should
look to make sure that we do not have this piecemeal approach
and can create some unintended consequences.
Mr. Travis. It's a really broad question, and I think it's
a really important question as well. To me what we need to
have, first and foremost, is regulation of the Big Tech
companies. I think Mr. Smith has done a really good job of
elucidating that this is not a one-size-fits-all policy. There
isn't one thing you can do that solves the larger issues in our
democracy as it pertains to the power of Big Tech.
What I see, and I can speak to specifically for myself and
the company that I run, is there are lots of companies like
mine. That the difference between making money and losing money
is what the algorithm that Facebook chooses to put into play on
any given day is.
The consistency of the rules that are being applied in a
content-neutral fashion does not exist. The power there, we
have effectively given over--I truly believe this--the right to
determine what a First amendment violation is, out of our
courts, and we have given them to the Big Tech companies
instead. That represents a chilling effect.
Because I will tell you this right now, the business side
of my company, they said, ``Hey, I don't know necessarily that
we want to share internal data and upset Facebook and other
tech companies.'' Because they have the ability to vice grip
control in many ways businesses. There are tons of them that
are going to watch this clip, and they are going to see the
data that we shared, and they're going to say, ``Hey, that
happened to us too. We didn't say anything because we hoped it
was just going to go away.''
So, I think it's not a fair fight right now, and the fight
needs to be more fair. To me, ultimately, that's what
government's job should be, create the standards and fair play
to allow a fight to be fair in this industry.
Ms. Spartz. Thank you. If you can--Mr. Greenwald and Mr.
Smith answer quickly because I want to yield some time to
Congressman Issa, too.
Mr. Greenwald. Can I just say--Oh, go ahead. Sorry.
Mr. Smith. Well, I would just say very quickly in terms of
additional ideas:
(1) LConsider the additional measures that should be put
into the JCPA, borrowing from parts of the Australian law.
(2) LFocus on the lack of competition in the digital
advertising market itself because that's where most of the
advertising revenue and profits are being trapped.
(3) LThink about the conversation before about the needs of
communities of color. I think there are a lot of ideas that
could be pursued there.
(4) LThere is this big issue. It's sort of called
modernized section 230. If we're ever going to get everybody
together in thinking about this, we probably have to think
through that piece, too.
Ms. Spartz. Thank you.
Mr. Greenwald. Let me just quickly say that I first would
encourage the minority Members of the Committee to really look
at that report from October because they think there are a lot
of solutions in it that address the primary concerns that are
being expressed.
Very quickly, until short of that of breaking up these
companies, I think you could apply First amendment law or other
requirements of content-neutral moderation, along with an
appeals process based on the reality of these companies are
monopolies, and people rely on them for their livelihood and
for their expression.
Mr. Cicilline. I thank the gentlelady.
Ms. Spartz. Thank, you.
Mr. Cicilline. The gentlelady's time is expired.
Ms. Spartz. I yield back. I don't see my time.
Mr. Cicilline. Yes, I'm sorry. Your time expired. Yes, you
actually went over 20 seconds, but happy to accommodate you.
I now recognize the gentlelady from Georgia, Ms. McBath,
for 5 minutes.
Ms. McBath. Well, thank you, Mr. Chair, and thank you to
each and every one of you for being here today. I want to start
by echoing the comments of so many of my colleagues about the
importance of local news. Whether it's print or radio, TV, or
online, it's essential that we journalists--that we have
journalists, reporters that are focused on what's happening in
each of our own very unique communities.
National media is not enough to keep us informed about
what's really happening locally, and that's been especially
true within the last year. We need to know about the State of
the pandemic in our communities, and we need to know who in our
community is eligible to take a vaccine and how they can get
one. We need to know when it's safe for us to go back to work
or safe for us to go to our local gathering places.
So, throughout 2020, we needed trustworthy accurate
information about how our election systems were changing so
that people could exercise their right to vote safely. Here in
Georgia, I represent Georgia where we have run-off elections,
and it was critical to have reporters and news sources who
continue to focus on getting accurate information to voters
well beyond November.
Ms. Barr, your testimony really focuses on the importance
of local news, and the investigations that you shared are great
examples of the power of local journalism. I just want to start
by giving you a brief opportunity to respond if there is
anything you feel that you didn't get to fully address.
Ms. Barr. Thank you very much. I would start by saying the
foundation all journalism starts in local communities. The
stories that tend to bubble up into the national papers often
have at their root in what happens locally.
So, to give you a very current example, in Houston and San
Antonio where we own television stations, as you all know, we
recently dealt with a horrific power grid failure that resulted
in people dying, resulted in homes having frozen pipes, people
losing lots of money on trying to repair things. It was quite
terrible.
It was the role of the local broadcasters in that situation
that really helped keep people informed and keep them
ultimately safe. Because in Texas, it's not common to have a
freeze like that. So, it was very, very important that we were
there. We were there both on television and, obviously, online
when the power failed and they couldn't reach us otherwise.
Ms. McBath. Okay. Thank you so much for that answer.
Mr. Chavern, many newspapers have recently switched to a
subscription-based model to compensate for ad revenues. While
many people are willing to pay for reliable local news, I am
concerned that a subscription might be considered a luxury in
households already making tough financial decisions due to
COVID. This in turn could mean that those households get lower
quality information as they turn to social media for answers to
important questions about the pandemic or exercising their
right to vote.
How can we make sure that everyone, regardless of their
financial situation, has access to reliable quality news?
Mr. Chavern. Great. Thank you for that question.
Subscriptions are essentially important to the industry and
will continue to be even more important. There is this
component of if you can pay, you get, and if you can't pay, you
don't get. That we need a digital ecosystem in social media and
other delivery systems that sustainably provide critical
information to communities.
Because what we have now is we have that ecosystem sucking
out that information for free, and that's just not sustainable.
Subscriptions are going to be important for my industry, yes.
We also need to have value coming back from the digital
distribution so that we can keep making critical information
broadly and widely available.
Ms. McBath. Thank you for that. Mr. Chavern, is there a
risk that collective bargaining between media companies and the
dominant platforms might only help large national media
companies and not local ones? Why or why not? How can we make
sure that local newsrooms benefit?
Mr. Chavern. So, two things, first, again, I think the
smallest local publishers are the ones most in need of
collective action. I also have to say, and there's been a lot
of discussion about this today, even of my Members who are
considered big companies, even collectively compared to the
massive market power of these digital platforms have incredibly
unequal bargaining power.
This industry itself is critically important to civic
society, and it needs the ability to collectively respond to
the dominance that's been allowed to build up in the digital
ecosystem.
So, I think there's tremendous particular benefits for
small and local publishers, but the whole industry itself needs
some capacity to speak for itself.
Ms. McBath. Well, thank you so much.
I yield back the balance of my time.
Mr. Cicilline. The gentlelady yields back.
I now recognize the gentleman from Wisconsin, Mr.
Fitzgerald, for 5 minutes.
Mr. Fitzgerald. Thank you, Mr. Chair. Well, it's been
fascinating this morning. I did work in both industries. I
owned and actually published a weekly newspaper, along with a
couple of monthly periodicals. I worked in radio, too, in a
very small station in Hartford, Wisconsin. So, I watched both
the industries change dramatically.
I just wanted to talk about that because if someone would
want to comment before the revolution of digital, there was the
revolution of desktop publishing. I went through that when we
had old serigraph machines, and they were doing typesetting.
Within, it seemed like a year, there were MACs on everyone's
table, and the industry had changed overnight.
We also, had dark rooms and photographers that it was very
labor-intensive to get a photo on the front page of the
newspaper. It was a big deal. Then all the sudden that was
gone, and everything was digital.
Shoppers. Let me talk about shoppers for a minute. It was a
weekly publication loaded with advertising, a huge supplement
for weekly newspapers, and suddenly they either had newspaper
content, news content which changed the dynamic of the
industry, or they simply kind of went away. I know that was
another big source of income for them.
On the radio side, it's been so diverse now between
somebody having the choice between XM Sirius, iTunes, so you
can pick up any radio station in the entire Nation, which you
couldn't do before. You were limited to the two or three that
broadcasted to your area.
Certainly, there is other things that happened in
broadcast, and the big one is the explosion of cable news. When
I was kid you had four stations. If you weren't on one of the
networks, that's where you got your news.
My whole problem with this is that the message has been
developed into this niche where you find your audience, you
target that audience by delivering the content that you think
they want to hear--and the reason for that is because you can
generate the revenue then.
So, it's really had a direct effect on straight news. I
think that's one of our bigger issues right now which is why
there's all of these ancillary issues related to what
journalists are reporting is because it's not making any money.
I go back to 230 again, I think that one of the most
important college classes I ever had, was called Law of the
Press. In that class they talked libel, libel, libel. In any
newsroom that I have ever been in and any editor who's
responsible for the content but always has, it's going to be
the general manager at the radio station, or it's going to be
certainly, the publisher of the paper, or the chain of papers
always looking over that editor's shoulder, making sure that
they don't put them in jeopardy when it come to the law.
What we have developed--and maybe it was a blunder by
Congress, I am not sure, but when 230 was put in place, that
allowed those entities that could benefit from that exemption
to flourish beyond what anybody could have possibly damaged at
that time.
So, even though I know that JCPA has probably got some
traction right now, I still think if you just do JCPA and not
do 230, you are going to find yourself back in the same place.
I know that one of the set of testimony today kind of alluded
to that.
I'm just going to the last thing I wanted to ask maybe Mr.
Greenwald because I think maybe you are probably in the best
position to answer this. What's your demographic? Who are you
trying to get to? Who do you think is most interested in your
content?
I have three sons, and two of them are in their 30s, and
one is 28 years old. I've never seen a newspaper in their hand,
but I also never seen them without their phone in their hand.
So, that's a big part of what this discussion has become is who
are these groups, who are we reaching out to, and does the
media feel a responsibility to tailor their content to these
individuals?
Mr. Greenwald. Yeah, that's a great question. It goes back
to what I and several other people were alluding to earlier
about the collapse in trust in media. I think what you said is
exactly right is that as media outlets have confronted an
increasingly difficult climate in which to not just profit but
sustain themselves financially, the model to which they turned
is one which feeds partisan audiences not what they should hear
but what they want to hear, which in turn erodes trust in
journalism even further.
I think that until that problem is addressed in terms of
what is journalism and the media industry doing that's causing
a loss of trust even if people are still consuming it, these
problems are going to continue to linger, and this legislation
might actually make that worse.
Mr. Cicilline. The time of the gentleman has expired.
Mr. Fitzgerald. Thank you, Mr. Chair.
Mr. Cicilline. I now recognize the gentleman from Georgia,
Mr. Johnson, the Chair of the Intellectual Property
Subcommittee for 5 minutes.
Mr. Johnson. I thank the gentleman for holding this
hearing. Very important. I thank the Witnesses for being here
today.
The vitality of a broad, diverse journalism field is
imperative to the success of our republic. Any threat to the
independent functioning of the fourth estate necessitates both
intense scrutiny and decisive action from this body.
This is why earlier today I asked to join Chair Cicilline
as a co-sponsor of his legislation, the Journalism Competition
and Preservation Act of 2021.
We should recognize that a free and vibrant press is
essential to the workings of our democracy, not just bringing
national and international news to the public, but also
bringing local news to consumers who need to know what's going
on in their local communities. There's a danger in all news
becoming nationalized, and I am afraid that is where we are
headed today given the fact that local news-gathering
organizations can't afford to stay in business because their ad
revenues have dwindled, and they have lost control over the
publication of their content.
Unfair and anticompetitive practices by online platform
giants are literally killing the ability of consumers to
receive robust and probing local news coverage.
Local broadcasters and local print media are trusted
sources of news and information for 330 million Americans. In
the Atlanta media market, I'm kept informed about what's going
on throughout my district and beyond. They cover news about the
civil rights demonstrations in Atlanta last summer and the long
lines at the polls last June and again in November.
They continue to provide much needed local air time on the
impact that the pandemic has had on schools, businesses,
minority communities, and healthcare in local communities in
the Atlanta market. They're keeping us up on what our
legislature is trying to do to curtail and limit our right to
vote.
Today, I stand up for local news-gathering organizations.
The value of local journalism and the diversity of voices it
amplifies is more important now than ever as the public has
moved to the online marketplace as the platform through which
they receive news coverage.
Ad revenue is the mother's milk for all news-gathering
organizations, and unfortunately for them, that same ad revenue
is being siphoned off by the digital platforms that use their
content to attract those same ad dollars.
This Committee's digital market report released last
Congress found that two companies have a duopoly over the
digital advertising market, Google and Facebook. In particular,
the Committee found that these two major companies Act as
gatekeepers, and their decisions on how to display content and
any changes to their algorithms can significantly affect the
traffic to a news publisher's website.
Mr. Chavern, how does Facebook and Google's ability to Act
as gatekeepers to news content on their platforms directly
affect the viability of news publishers?
Mr. Chavern. All right. Thank you very much.
One of the things we know about news content is it's highly
engaging. People go to Google and Facebook products to find out
about what's happening in the world to get updates, and they do
it again the next and the next day after that. So, it draws a
lot of audience. That content acts as an antidote for the
platform's misinformation problem. So, it benefits the
platforms tremendously, and very little of the value though is
returned to publishers.
So, at the same time that our content is more important and
more valued than ever, there is very little return to actually
sustain the creation of it. That's essentially what we need to
fix if we want a future for local news.
Mr. Johnson. Thank you, Mr. Barr--or I am sorry, Ms. Barr,
if Congress is unable to level the playing field, what does the
future look like for local news-gathering organizations?
Ms. Barr. Thank you very much for that question.
We would probably find ourselves increasingly unable to
maintain the level of coverage that we have in our local
markets. So, when a major event occurs or even a minor event,
we might have fewer people to cover a school board hearing, a
government agency that's being critiqued, or we might have
trouble with covering a major hurricane. It would just make it
more and more difficult for us to cover the markets in which we
live and work.
Mr. Johnson. Thank you.
Mr. Chavern, how has the enforcement of--
Mr. Cicilline. I am sorry. The time of the gentleman has
expired.
Mr. Johnson. I thank the Chair.
I yield back.
Mr. Cicilline. The gentleman yields back.
I now recognize the gentleman from Utah, Mr. Owens, for 5
minutes.
He was on the screen. There he is.
Mr. Owens. Thank you. Thank you, Mr. Chair, and the Ranking
Member. Thank you for holding this hearing today. To the
Witnesses, I really do appreciate you sharing experiences.
We've heard a lot today about the cancel culture invading
our society, but I need to say something a little bit more on
that. There's a reason why I am passionately fighting this
current cancel culture. Because what I have seen with canceling
a culture truly looks like, with my upbringing, canceling a
culture looks like intimidation of young Black students
entering University of Alabama to break the barrier of
segregation in 1973. Canceling a culture looks like police and
attack dogs waiting at the end of a Selma bridge in 1965.
Today, canceling a culture has taken the form of press or
censorship of Big Tech silencing American voices and stealing
our freedom of speech.
As it was in 1960 civil rights day, it will take the same
old school Americanism to defeat this curse. It's called
courage, backbone, and patriotic bipartisanship, which I am
seeing today, in an effort to prioritize our culture of freedom
over gold, global profit, and power.
The enemies of our American culture can be summarized in
two words, the same words used in the interviews of the 1963
Freedom Fighters, bullies, and cowards.
To go back to what Thomas Jefferson and one of our Founders
said, obviously, several years ago--at the beginning,
``ignorant and free can never be has never been more true than
it is today.''
There's been a lot of good questions asked today, and I
don't want to duplicate those. So, I am just going to ask Mr.
Travis and Mr. Greenwald, this is one of I think of a long
series of steps we can deal with this process been happening to
us for quite a while in this cancel culture, cancelling a
culture, our American culture.
How do you see us finally get to that end where we have
gotten trouble--and obviously this is one of the many steps to
getting control to where we can have that freedom of speech
again where we expect this as a country that this should be a
natural process, we can speak freely without feeling or being
attacked, how do you see that coming to where we can end this
process here in America?
Let's start with Mr. Travis and Mr. Greenwald.
Mr. Travis. It's a great question, Congressman. To me,
every single American out there is terrified on some level
every time they pick up Twitter, every time they pick up
Instagram, every time they pick up Facebook, and they sit there
for a moment and think about whatever opinion they're about to
share, and they have to think to themselves, ``Is this worth my
life fundamentally changing?''
To me, the marketplace of ideas, Congressman, requires that
people not be afraid to say what they really think. What we
have created is such a stifled environment today that people
are terrified to say what they think. They're also terrified
that their kids might have a TikTok video out where they're
singing along to a rap song, and suddenly they can't get a
college scholarship anymore. That's happening every single day
across this country.
Big Tech has helped to create a censorious universe where,
again, I said cancel culture to me is the difference between
``I disagree with you. And I disagree with you, and you're not
even allowed to be involved in this conversation, and you
shouldn't be allowed to have a job either.''
What we have to do if we want to have a full flourishment
of democracy is start to fight back against that culture of
censorship. One of the ways that we do it, I believe, is by
restricting the antitrust power that, I believe, the Big Tech
companies have come to take over in the ensuing decade.
I am sure Glenn can talk about that a lot better even than
I can, but that's the essence as of the question you're asking.
Mr. Owens. Yeah, thank you.
Mr. Greenwald. The one point I'd like to emphasize,
Congressman, about all that is Big Media, the largest media
corporations in the United States are not opposed to the
censorious behavior of Big Tech. Quite the contrary, they're
the ones who have agitated for it most aggressively.
If you ask people in Silicon Valley, they will tell you,
they would all other things being equal prefer to be out of the
business of content moderation and have been pressured by Big
Media companies, both for ideological and competitive reasons
to silence others who might compete with these large outlets in
the name of diversity.
This is why I would really urge the Committee to strongly
consider this. What I think everyone is saying is very valid in
this concern for the viability of local media outlets. So, if
that's the case, the focus ought to be on empowering these
local media outlets to sustain themselves and to grow and
flourish and not empower the actors who are causing so many of
the problems that we're all talking about which are Big Media
outlets, either acting in concert with Big Tech or in many
cases co-opting in the power that they wield.
Mr. Cicilline. The time of the gentleman has expired.
I now recognize myself for 5 minutes.
Mr. Greenwald. Thank you.
Mr. Cicilline. Mr. Greenwald, that's exactly the purpose of
the legislation to empower those small publishers and small
newspapers.
Mr. Chavern, I want to start with you. A few years ago,
Facebook's head of new partnerships, Campbell Brown told
publishers that if they don't work with Facebook, they will end
up quote, ``in hospice.'' She reportedly said, and I quote,
``We will help you revitalize journalism, but in a few years,
the reverse looks like I will be holding your hands with your
dying business like in hospice,'' which is pretty powerful
language.
Our investigation found that Google or Facebook can change
their algorithm and in doing so can have a devastating impact
on traffic to a news publisher's website. One publisher
explained an incident where Google made a change to its search
algorithm that slashed traffic to the publisher's website by 50
percent.
So, my question for you is how do those types of incidents
affect a news publisher's advertising revenue? Have news
publishers raised their concerns directly with Google and
Facebook, and if so, what was their response?
Mr. Chavern. Thank you very much. Yeah, the fascinating
quote. The sad fact is so many publishers did and have tried to
do what Facebook has asked almost always to their detriment. By
the way, interesting example about the role of algorithms in
all this. There has been some really good reporting about the
last Presidential election, Facebook made the decision to
increase the amount of news from reliable professional news
sources. Then they decided to turn it down again.
So, they actively manage the amount of quality journalism
that the public is exposed to. Essentially, that determines
whether we live or die. These two companies are our regulators.
They determine whether we're seen, how we're--
Mr. Cicilline. Thank you. I don't know if he froze or--
Mr. Chavern. So, with that, I just say we have tried to
work with them, and it hasn't worked out very well.
Mr. Cicilline. You add to that a business model that incen-
tivizes the most provocative and exploitative communications
that are shared most widely to increased ad revenue. So,
there's no incentive for that kind of proper curation of their
sites.
Mr. Smith--thank you again for your testimony. You
mentioned in your written testimony transparency requirements,
obligations, negotiating in good faith, and a duty to avoid
retaliation, as well as some oversight and monitoring by an
agency like the FTC.
I am just wondering if you can share a little about what
your thoughts are and how we might improve the Journalism
Competition and Preservation Act in light of the Australian
experience.
Mr. Smith. Sure. I might start with the aspects that are
most closely related to the negotiation process itself. So, I
do think that a duty to negotiate in good faith, and especially
an obligation to avoid retaliation are very important. I think
that responsibility usually is subject to an agency review. In
an FTC or similar agency review to uphold those
responsibilities is not just appropriate but pretty customary.
I do think the transparency issue gets back to what you
were just talking about. I think that's going to require some
more thought, it's going to require some more discussion. I
think in Australia it became apparent that it was important. It
was also a challenging topic. There's a lot of views on both
sides that, frankly, need to be considered. This is a topic
that is of great importance, frankly, around the world.
Mr. Cicilline. Thank you so much.
Mr. Schleuss, you raised some concerns about additional
revenue that may be provided to news organizations that are
able to negotiate under the JCPA might not be reinvested in
producing high-quality news, but rather be used for share
buybacks or to further enrich wealthy investors. I think those
are really important concerns.
So, what safeguards should we be considering adding to this
bill to address these concerns.
Mr. Schleuss. Well, I am hearing a lot of terms that I hear
in my day job. Right? I am hearing about the balance, imbalance
of power, and the need to negotiate in good faith in a
collective way. In the past 3 years, we have added 3,500 media
workers to our union which is unprecedented growth.
So, what we need to do is we need to make sure that the
workers are part of the solution; that any additional revenue
would be built in to support new jobs at local newsrooms; and
we also need to make sure there's neutrality. The union besting
effort by a lot of these companies whether it's Gannett,
Tribune Publishing, or even Block Communications Incorporated,
ceased and stopped. Because these journalists, they just want
to do their jobs. They look at their jobs as a public service
to their communities, and they don't want to have to also fight
the companies to just get the basic respect that they deserve.
Mr. Cicilline. Thank you. I will just note with my couple
of seconds left, that you know, we all recognize that this is a
temporary solution to an urgent problem that we believe we must
respond to. If we don't, we will just not have local journalism
anymore.
So, this is not something we're doing alone. We have a very
robust antitrust agenda with many, many excellent
recommendations that we intend to move forward on. I don't want
anyone to be concerned that this is the only thing we're going
to do. This is one part of a very discrete problem, it's a very
temporary fix, we have a lot more work ahead of us that relate
to all the recommendations in the report.
With that I am pleased to yield 5 minutes to the Ranking
Member of the Subcommittee, the distinguished gentleman from
Colorado, Mr. Buck.
Mr. Buck. Before my time begins, Mr. Chair, may I ask a
quick question?
Mr. Cicilline. Of course.
Mr. Buck. I think part of the discussion today is about the
bill and whether it intends to cover startup organizations and
various others. I just want to mention a few of them, if I may,
Daily Caller, Daily Wire, Washington Examiner, Washington
Times, Spectator Blaze, National Review Online, Breitbart,
Federalist, and Mr. Greenwald's former employer, The Intercept.
Are those all intended to be covered by the definition that we
have in here, news content creator?
Mr. Cicilline. Yeah. They are not only intended to be
covered, but they are also covered because it's content-neutral
and all the organizations you described are produced as--
Mr. Buck. When Mr. Breitbart started, Breitbart in his
garage, would that be covered by this?
Mr. Cicilline. Absolutely.
Mr. Buck. If there was some doubt about that, would the
Chair be willing to entertain an amendment to the bill to
clarify that when we get to markup?
Mr. Cicilline. I am always willing to work with you, Mr.
Buck. You have always acted in good faith. To the extent there
are improvements or clarifications to the bill that will be
useful, I am happy to work with you on those.
Mr. Buck. Thank you very much.
Mr. Travis, I am just an old jock, so I am more comfortable
talking to you than anyone else around here, and I appreciate
you being here today.
I have to tell you, and you may have been in this situation
also, but I have been in disagreements with a spouse, a child,
a neighbor, a co-worker, and after about 5 minutes of the
disagreement, I realize we're saying the same thing. There's
something happening today where I feel like we're saying the
same thing, and not just Witnesses, but the Members also.
What happened to you is disgraceful in this country. It's
something we expect in China or Russia. It's not something we
expect in the United States of America. So, I absolutely
believe the solution to what you talked about is having 5
Googles, 10 Facebooks, 12--and I think Mr. Smith would agree
with me, he would love to have, being in Google with equal
market share competing against each other in a way that would
make sure that if one discriminated against you, the other
would pick up that revenue and run with it.
This is something different, what we're talking about with
this particular bill. What we're talking about with this bill
is to make sure that these news organizations that are going
out of business have the chance to compete with these Big Tech
giants for ad revenue. Right now, they don't.
Right now, what we're seeing--and by the way, Big Tech
doesn't have a bunch of reporters out there covering news
stories or opinion writers writing the news stories. All they
do is they take someone else's product, and they use that
product for more and more profit for them and less and less
profit--or revenue for the other side.
So, what I am wondering is what is the solution that you
would--not to the world in general, we agree, especially on
this side of the aisle that we need to do something about
section 230, and we need to do something about censorship.
In terms of this specific issue, revenue for small, local,
news organizations, what do we do?
Mr. Travis. There's not an easy solution. Right? There is a
multifaceted solution that I think is going to have to be built
for things like this to work. I think section 230 needs to be
modified in many ways.
I also think to use the specific example that I was talking
about, in courts, we have created a system where if a bad judge
decision occurs at the district court, you can appeal it to the
appeals court, or all the way to the Supreme Court.
When I look at Facebook which is a monopoly, let's not
pretend that they're anything other than a monopoly, it's
almost impossible for news organizations to make budgets
without working with Facebook, as Chair, you just said in the
example you use. What I think they need to have is a fair and
transparent system when they get things wrong to allow them to
be remedied.
Because, ultimately, I'm going to be fine. If our company
doesn't make the revenue that we should on the content that
we're producing, that means that I hire less people. That means
that all these companies that are here talking to you today
trying to increase their revenue hire less people as well.
To the extent that I believe in the marketplace of ideas,
which I do, we need as many voices as possible all speaking.
The way that the system is structured right now, we are not
having that occur.
Mr. Buck. Mr. Smith, I want to ask you a quick question. I
recognize the concern that at some point there will be this
smokey room, and a few of the tech giants and a few of the news
giants will get together and say, ``Hey, we could make even
more money if we just decided to screw all these other people,
the smaller tech companies and the smaller news
organizations.''
So, the idea that these two giants are going to collude and
create something with the exemption that we're talking about in
this bill may be real.
I want to ask you, in your experience with Australia, did
Google say to the world, ``Hey, let's just get together with
three or four of these news organizations, the Australian
people will be happy, and that's the way to go.'' Did they Act
like they were willing to collude with just a few, or are they
concerned with the welfare of the people of Australia?
Mr. Smith. Well, it's a great question. Interestingly, as
things played out in Australia, I think it's fair to say that
there was initially a principal concern that, frankly, the only
news organizations that would benefit would be the big ones,
and, specifically, News Corp and two others.
The whole assurance that the law contained to ensure that
everyone was reached was exactly what is in the JCPA. The
ability for everyone to negotiate collectively. I actually
think that if you don't create a basis for small publishers to
negotiate collectively, you really don't create much of a basis
for them to negotiate effectively.
Mr. Buck. I appreciate the time, Mr. Chair, and I yield
back.
Mr. Cicilline. The gentleman yields back.
I now would like to add the following items for the
record:A letter from Jason Kint, the CEO of Digital Content
Next;a statement for the record from Jeff Jarvis, the Leonard
Tow Professor of Journalism Innovation at the New York Craig
Network Graduate School of Journalism;a statement for the
record from Maribel Perez Wadsworth, President of News, Gannett
Media; a statement for the record from Rod Sims, Chair of the
Australian Competition and Consumer Commission;a statement for
the record from Media Matters for America;a statement for the
record from our colleague, Congresswoman Susan Wild, who in her
statement acknowledges, and I quote, ``These challenges are
real. And those of us in positions of power must take them
seriously,'' and recounts her mother's own experience as a
journalist;a joint statement for the record from the National
Association of Black Owned Broadcasters, Native American
Journalist Association, and Radio Television Digital News
Association;a statement for the record from the Free Press
Action;a statement for the record from Google;and a statement
for the record from Matthew Schruers, President of Computer and
Communications Industry Association.
[The information follows:]
MR. CICILLINE FOR THE RECORD
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Mr. Cicilline. With that, I would like to really thank our
extraordinary panel of Witnesses for your testimony today. I
think this was a very productive hearing and raised very
important issues about this urgent challenge we face.
Next Thursday, we will be holding our third hearing as part
of a series to develop legislation to address the rise and
abuse of market power online. At that hearing, our Witnesses
will discuss proposals to modernize and strengthen the
antitrust laws that apply in monopoly power and anticompetitive
mergers.
Again, with deep gratitude to our Witnesses and 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 now adjourned.
[Whereupon, at 12:50 p.m., the Subcommittee was adjourned.]
QUESTIONS AND ANSWERS FOR THE RECORD
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