California Wants Big Tech to Pay News Publishers a Usage Fee

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This Week
March 27, 2023
What's Next for CJPA?
GARM on Thin Ice With GOP
Around the Water Cooler
California Wants Big Tech to Pay News Publishers a Usage Fee
California Assembly member, Buffy Hicks, is proposing a state-level version of the journalism usage fee bill. The proposed law will allow local news outlets to work together to bargain with tech giants, such as Facebook and Google, to collect a fee for using their content and selling advertising alongside it.

A federal version of this bill, the JCPA, was previously introduced in Congress and successfully passed out of the Senate Judiciary Committee in September 2022. The bill was nearly passed into law in December but failed to pass after Meta threatened to pull news from Facebook in the U.S.

"The CJPA provides a lifeline for news outlets – large, small, and ethnic – by directing a portion of the ad dollars back to the print, digital, and broadcast media that bear the entire cost of gathering and reporting local news while Big Tech bears none," Wicks said.

Wicks asserts that she is trying to rectify Big tech's monopoly on news-related content. She says big tech is enriching their pockets with local news content, and they need to compensate the publications that created it. According to Wicks, the bill will create a more stable news ecosystem by driving more digital ad revenue to local news outlets. This is especially true for small and marginalized news outlets.
Why This Matters
The arsenal launched against big tech grows larger by the day.

The evolution of digital media has drastically changed the way consumers read the news. Print publishers are not the only medium to interact with the news anymore. Many consumers read the news from social media and third-party media outlets like Facebook and Google. Consequently, much of the news revenue has moved towards big tech.

"The rise of digital media and technology has transformed how we access news and entertainment. It's also had a devastating impact on print publishing industries," a report by the Census Bureau stated. "Many Americans may not remember the last time they stopped by a newsstand to pick up a magazine or newspaper."

In addition, this means that the walled garden took a large amount of ad spend from news outlets and trapped it behind their flanks. Big tech saw it coming too. Meta already threatened news outlets when the U.S. government nearly passed a federal law. The same thing happened in Australia in 2021. They passed a federal law, and Google and Facebook launched threats. Eventually, both companies came to the bargaining table to see how their practices could work under the new law.

The CPJA may have the same leveraging power to finally create a U.S. federal law. Although the duopoly's walled garden is a strong fortress, they have fought off many laws in a similar vein.
GOP Accuses Global Alliance for Responsible Media of Violating Antitrust Law
The longstanding battle between the U.S. federal government and the ad tech industry came to a head after GOP House Judiciary Chair Jim Jordan called out the Global Alliance for Responsible Media (GARM) for breaking Antitrust law.

GARM has over 100 members and includes advertisers such as Procter & Gamble Co., Meta Platforms, and Alphabet Inc. According to Jordan, the group demonetizes and eliminates disfavored online content. He believes this "conduct reduces consumer choice and cuts off access to diverse coverage on matters of national interest."

Traditionally, U.S. antitrust laws prohibit companies from working together and making agreements, but a few exceptions exist. For example, they can work together to advocate for government action, such as passing legislation and developing standards for the industry.

Consequently, GOP Chair Jim Jordan asked GARM and the World Federation of Advertisers to provide the panel documents and information on its work by April 5.
Why This Matters
The federal government and big tech are no strangers to an antitrust lawsuit.

This past February, the Department of Justice filed an antitrust lawsuit against Google. The lawsuit alleged that the tech giant monopolizes the ad tech industry. The DOJ wrote:

"But competition in the ad tech space is broken for reasons that were neither accidental nor inevitable. One industry behemoth, Google, has corrupted legitimate competition in the ad tech industry by ed by publishers, advertisers, and brokers to facilitate digital advertising."

This antitrust case is a bit different. GOP Chair Jim Jordan accuses these ad tech regulators of censoring and demonetizing certain content. Many industry experts believe that the criticism from the GOP stems from the fact that allegedly social media platforms remove or demonetize conservative content. This criticism stems back to Donald Trump's time in the oval office.

According to GARM, which launched in 2019, they aim to create brand safety standards for social media advertising. Their 2022 annual report said they "helped establish common definitions, metrics, and tools to aid brands and their advertising partners in ensuring their ads don't appear alongside content they may find problematic."

Some say it is a continuation of the polarizing conservative vs. liberal onslaught. But if the lawsuit succeeds, it would be another major change for the ad tech ecosystem. Specifically, its ability to self-regulate.
Around the Water Cooler
Adobe's CDP Gets a Generative AI Update At the recent Adobe Summit, the tech company announced three new generative AI capabilities in its Real-Time CDP, allowing marketers to train AI models with their own data and content. (ZD Net)

Video Ruled 2022 Midterm Ad Spend
Of the more than $130 million in political ad spend flowing through Basis Technologies pipes, 68% went to video, while 24% went to display. Interestingly, 25% of those dollars were spent just 10 days before Election Day, according to Basis Technologies. (Basis Technologies)

Has Amazon Reached Its Peak? By the end of April, Amazon will eliminate 9,000 positions, mostly from AWS, the company’s profit center. This news comes just a few weeks after the retailer announced the elimination of more than 18,000 roles, mainly in retail. With sellers having more options from Shopify to Walmart, the company has a tough road ahead regarding holding on to its sellers. To keep costs down, the commerce giant may end up passing the buck onto its Prime members by raising rates. (Retail Dive)
Sweet Tweet
Maybe Everything Is Not an Ad Network
New: Gap dissolved its ad business to focus on supply chain and apparel programs — showing how tough it is to stand out in retail media when every retailer is pitching advertisers its audience and data: — @LaurenJohnson
Worth a Listen
How AI Chat Search Could Disrupt Online Advertising
Advertisers will need to figure out how to adapt before they are left behind by the next generation of search engines. Competition is quickening the pace of change, says Garrett Johnson of Boston University.
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