Dudley: News Tax Credits Lifeline



Sometimes the news comes just at the right time.

Like recently, when a reader wrote to say he was skeptical of government support for newspapers I have argued for in columns. He loves newspapers, but thinks they should be able to “fend for themselves”.

I agree with the sentiment. But there is more to the story, as the reports of Google’s selfish manipulation of the digital advertising market show, just as I was writing a response.

A sustainable and independent press is the goal of the temporary tax credits currently being considered to preserve newsroom jobs and prevent further newspaper closings. They complement longer-term efforts to tackle unfair competition from digital platforms.

While this transition is happening, it is better for news agencies to survive with government support than not to survive at all. Remember that the US government, deeming the news industry essential to democracy, has supported it in various ways since the founding of the nation.

Newspapers are evolving and finally repositioning themselves to better compete online. A few are successful and find new business models. But the entire industry will continue to decline and more newsrooms will shrink and close, as long as the digital market is rigged against them.

There is now ample evidence of issues with dominant platforms, including stunts of leadership leaks from Facebook making bad decisions that have led to offline damage and seemingly misled investors and policymakers.

At the same time, states and the federal government are pursuing antitrust cases against Google and Facebook, based on strong evidence that the company’s business practices have broken the law and caused economic damage.

As the platforms dispute the allegations and the full story will take years of litigation to resolve, there are now tons of documents showing how the game is stacked against the newspaper publishers who continue to provide most of the coverage in the world. ‘local news.

It’s not just the biased advertising market. On top of that, there is the problem of platforms using news content from publishers without paying for it, making billions for the platforms as newsrooms wither.

New details of the advertising market distortions emerged recently when, by order of a judge, the veil was lifted from a multi-state antitrust case against Google.

Among the revelations: Google gets up to 42% reduction in ad sales managed through its system. The extraordinary take shows just how dominant the company is in the market, argues the state’s Texas-led case.

Google’s ad exchange manages over 60% of the display ad inventory sold in the United States.

In one example, a $ 6 bid for one ad spot came from the Google ad exchange and a $ 8 bid from another exchange. But because Google designed the system to come first, the $ 6 auction won, which shorted the publisher by $ 2.

“Internally, Google employees were confronted with Google falsely telling publishers that Google’s header auction alternative allowed competition and improved performance, because in reality Google created a program. which has benefited to the detriment of publishers, ”indicates the case.

The case also revealed what it called “an illegal deal” between Google and Facebook reached in 2018, when Google’s dominance was threatened by a new auction system for online ads backed by Facebook. In return for the withdrawal, Facebook received preferential treatment in Google’s system.

Yes, loopholes can sometimes be found in a particular story or media, especially when many are steam powered. But the service and local coverage provided by newspapers is essential, a public good, and must be sustained.

Temporary tax credits won’t influence coverage or favorites, but they would stop the death spiral in which local newspapers find themselves. They would save them time to retool, as antitrust law enforcement and reforms aim to level the playing field.

Meanwhile, newspapers cannot stand on their own when you are kicked out.

Brier Dudley is editor of the Seattle Times Save the Free Press Initiative.



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