News industry takes on Facebook. Will Congress intervene?

On Behalf of | Jul 14, 2017 | blog

The methods used to gather news are much different today than they were ten years ago. In the past, newspapers and news broadcasts provided this information. Now, many turn to news feeds on Facebook or information posted on Google.

Although information at the push of a button is convenient, critics voice concern about accuracy. After all, Facebook and Google are not hiring reporters to review public records for corruption or to go into war zones to gather information. This type of reporting is more likely to result in accurate information. Unfortunately, it comes at a price.

The costs associated with these reporting methods were generally offset by consumers and revenue from advertising. Unfortunately, fewer consumers are willing to pay the price and fewer companies are willing to use newspapers for marketing purposes. A recent piece by CNBC notes that newspaper ad revenue alone has dropped from $50 billion in 2007 to $18 billion in 2016. This has made it difficult for the newspaper industry to survive.

A fight for survival, by banding together

News providers like The Wall Street Journal, The New York Times and The Washington Post are coming together to negotiate with Facebook and Google to help safeguard the integrity of the news industry. Although this alliance is postured to focus on the good of the consumer, some are concerned it could result in allegations of antitrust violations.

News industry seeks approval from Congress

In an effort to stem these allegations, the news industry is seeking approval from Congress. Antitrust laws are intended as protections to prohibit companies from joining forces and dominating the market. The Federal Trade Commission (FTC) clarifies that these rules are designed to encourage a free and open market, a market that offers consumers higher quality products at lower prices as businesses compete for consumer’s attention.

In order to move forward with this attempt at negotiation, the news providers will likely need approval from Congress for an exemption to these antitrust rules.

Accusation of an antitrust violation can come with harsh penalties. Serious violations can include triple damage awards and prison time. These penalties are so severe that even the giants of the news industry are treading carefully to ensure their survival. Any business that faces allegations of an antitrust violation should take the accusations seriously. Contact an experienced attorney for business and commercial litigation to help ensure your business’ interests are protected.