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Congress will look at whether Google and Facebook are 'crushing' the news

The pressure is mounting on big tech in Washington. On Tuesday, the House Judiciary committee’s antitrust panel will hold the first hearing of its bipartisan investigation into big tech — on the relationship between big tech and a free and diverse press.

Last week, the House Judiciary committee announced the bipartisan investigation, focusing on tech giants. The committee called it “a top-to-bottom review of the potential of giant tech platforms to hold monopoly power.”

“We need a system of quality journalism in this country and we’ve got problems with that right now,” said David Chavern, CEO and president of the News Media Alliance, a trade association of more than 2,000 newspapers.

Chavern, who’s set to testify at the hearing, spoke to Yahoo Finance on Monday.

A Democratic aide tells Yahoo Finance the first hearing is focused on tech’s effect on journalism — in part — because it’s an issue that has bipartisan support.

Google CEO Sundar Pichai testifies at a House Judiciary Committee hearing "examining Google and its Data Collection, Use and Filtering Practices" on Capitol Hill in Washington, U.S., December 11, 2018. REUTERS/Jim Young

The Chairman of the antitrust subcommittee, Rep. David Cicilline (D-RI), and the Ranking Member of the full committee, Rep. Doug Collins (R-GA), have introduced a bill called the The Journalism Competition and Preservation Act, which would allow publishers to collectively bargain with the online platforms.

“This bill will provide a much-needed lifeline to local publishers who have been crushed by Google (GOOGGOOGL) and Facebook (FB). It’s about time we take a stand on this issue,” said Cicilline in a statement.

Sen. John Kennedy (R-LA) and Sen. Amy Klobuchar (D-MN) introduced a companion bill in the Senate earlier this year.

“At the heart of this bill is helping newspapers survive amid shrinking circulations and massive layoffs. Google and Facebook now control the news kingdom. They’ve pitted themselves against newspapers in a David-and-Goliath battle in which newspapers don’t have a stone to throw much less a slingshot to put it in,” said Kennedy in a statement.

‘We need a better deal.’

Chavern told Yahoo Finance he’s encouraged Congress is holding the hearing, and he hopes lawmakers will pass the the Journalism Competition and Preservation Act.

“News is important in every dimension, including financially. We need a better deal from the major platforms if we hope to sustain it,” said Chavern.

Chavern outlined the four areas where he says news publishers deserve a better deal: money, data, algorithms, and branding.

“Both platforms [Google and Facebook] pay for other kinds of content — they pay for music content in particular — and they’ve just refused to pay for news content,” said Chavern.

Chavern also argues the platforms “hoard data” about who is reading content without sharing it with publishers.

He’s also worried about the platforms’ algorithms and “brand suppression.”

“They minimize indicators of where news comes from because they want people to be attached to them — to be attached to Google and Facebook — and not necessarily to news brands. That’s not only bad for our business, but it’s bad for the consuming public because they get very confused then about where quality content comes from and where it doesn’t,” said Chavern.

KRAKOW, POLAND - 2018/09/07: In this photo illustration, the Google News app is seen trough a magnifying glass on an android mobile phone. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)

Ahead of the hearing, the News Media Alliance published a study estimating Google made billions of dollars from news content last year, through search results and Google News (though some critics — including journalism professors — have questioned the study’s methods and findings).

“News content is really important not only to the public, not only to civic society, but to the finances of major tech companies,” said Chavern.

Google called the study “inaccurate” and noted news publishers also benefit from Google — not just the other way around.

“The overwhelming number of news queries do not show ads. The study ignores the value Google provides. Every month Google News and Google Search drive over 10 billion clicks to publishers’ websites, which drive subscriptions and significant ad revenue. We’ve worked very hard to be a collaborative and supportive technology and advertising partner to news publishers worldwide,” said a Google spokesperson in a statement to Yahoo Finance.

“I’d like to know what’s in the envelope then. If they view it as inaccurate, then tell me what the accurate number is. The fact of the matter is we’ve been trying to get that information out of them for years,” said Chavern.

While the study only examines Google, Chavern believes the findings would be similar at Facebook.

“We’re highly confident that news is also important for them [Facebook] as a business — in terms of driving consumer behavior. We do know that a lot of our content is consumed through the platforms, that people want to get on these platforms in part because they get to consume news there,” said Chavern.

Jessica Smith is a reporter for Yahoo Finance based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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