Klobuchar Hopeful for Honest Ads Act Passage in 2018

Recent state enforcement activity for digital advertising transparency means Congress could potentially pass S-1989, the Honest Ads Act (see 1805080054) this year, said Sen. Amy Klobuchar, D-Minn. It’s “fascinating” Google announced last week it won’t run political ads in Washington state in response to a lawsuit from Washington Attorney General Bob Ferguson, said the Senate Antitrust Subcommittee ranking member at Tuesday's Open Markets Institute (OMI) event.

State action is what drives actual movement in Washington, D.C., Klobuchar said, noting support for the legislation from Facebook, Twitter, Microsoft and several tech companies. “We’re at this moment where we can hopefully get this done within the next year,” she said. “I don’t know that we could get this done before this [midterm] election but certainly after this election.” Klobuchar said it’s her mission to make “antitrust cool again,” noting a court's ruling later that day on AT&T buying Time Warner (see 1806120002). She’s excited for the upcoming hearing on T-Mobile/ Sprint, she added (see 1805240025).

Using antitrust enforcement as a tool for trying to preserve democracy or reinforce First Amendment values could easily lead to the opposite result, said DOJ Assistant Attorney General Makan Delrahim, the department’s antitrust chief. There are real-world examples in antitrust enforcement, he said, citing an unnamed state antitrust enforcer offering to join the agency's case against AT&T/TW if there were a guarantee no divestiture would go to Fox or News Corp. Executive Chairman Rupert Murdoch. “Whether it’s the [Koch brothers] or George Soros or anyone else, political positions should have no role in determining the propriety of antitrust enforcement actions," he said, according to prepared remarks. Enforcement guided by the consumer interest standard benefits democratic values as a side effect, Delrahim said, as that standard can still handle the issues raised by the emerging media market.

News Corp. CEO Robert Thomson and The New York Times Co. CEO Mark Thompson lamented the dire outlook for journalism. Thomson compared social media to big tobacco, asking when “irresistibility” becomes “irresponsibility.” He described the modern era as an age of bluster and bombast, in which platforms are encouraged to grow an audience of addicts. He called social media’s impact on journalism “the Silicon Valley Chainsaw Massacre,” saying the world’s most clever engineers have taken the most clever algorithms and made social media irresistible.

Rep. David Cicilline, D-R.I., said democracy is strongest with a free and open press, and the biggest threat to freedom is an uninformed citizenry. He argued for more freedom for users to transport data, saying people are unlikely to leave Facebook without seamless portability of their data. He also backed stronger antitrust transaction enforcement, as platforms have a stranglehold on innovation. Concentration of media ownership has a staggering impact, he said, for the power over platforms for public opinion.

Thompson said despite the advantages his newspaper enjoys, the environment for increasing digital revenue is more challenging than it should be, and he asked how much platforms are to blame. He noted that Google, Facebook and Apple don't want to destroy journalism and are open to exploring ways to improve the ecosystem, and Google has been more responsive to publishers than Facebook. Facebook threatens to blur the lines between objective journalism and propaganda, he said (see 1806110034). Thompson said the idea of Facebook becoming a publisher “makes my blood run cold.” That might not be a good solution, and neither is censoring fake news, he said. Platforms need to give users enough information to make their own decisions, which is the bedrock of Western culture, he said.

Traditional media are being squeezed not just by the Google/Facebook advertising duopoly but also by a media transition toward mobile devices, said Ben Smith, BuzzFeed editor-in-chief. There has been a flowering of high-quality national news outlets that are solely online, but local journalism is hurting, he said.

Digital Content Next CEO Jason Kint said media in every nation are grappling with the Google/Facebook duopoly. Part of the problem is Google is dominant in every stage of the advertising process, from ad buying to its DoubleClick for Publishers service to its browser dominance, he said. In any other market, "this would be illegal” but since ad content is free, the argument is made that such conduct isn't illegal, Kint said.

Added Lina Khan, OMI director-public policy: Google and Facebook often believe they obtained market power from the success of their products, but there have been multiple instances when they engaged in practices with "a distinct anticompetitive flavor." Given the information asymmetry between Facebook and the FTC, it's tough to protect against the company squashing competition, she said.