Originally published in the Wall Street Journal
‘A monopoly on the means of communication,” Robert Shea and Robert Anton Wilson wrote in “Leviathan,” their 1975 novel, “may define a ruling elite more precisely than the celebrated Marxian formula of ‘monopoly in the means of production.’ ” Bear that in mind when you hear this next statistic: In 2017 Google and Facebook have accounted for 84% of all digital advertising outside China, including 96% of its growth, according to an industry forecast this month from Zenith, Magna and GroupM.
Those figures should create more than the typical economic concerns about market concentration. Specifically, the tech duopoly’s dominance threatens the marketplace of ideas. Beyond advertising, Google and Facebook control how millions of people find their news. Americans are far likelier, collectively, to encounter articles via search engines and social media than on a news site’s home page.
Google is used for nearly 90% of online searches in the U.S. A Pew survey this summer found that the four most popular social-media sites for getting news are Facebook, YouTube (owned by Google), Twitter (which has a Google partnership), and Instagram (owned by Facebook). No more than 5% of Americans use another social-media platform to get news.
In a November speech, Ajit Pai, chairman of the Federal Communications Commission, argued that “edge providers” like social-media websites and search engines “routinely block or discriminate against content they don’t like.” Mr. Pai cited YouTube’s decision to place age restrictions on and pull ads from videos by conservative commentator Dennis Prager’s Prager University, including a video by Alan Dershowitz on Israel’s founding.
He also pointed to Twitter’s suspension of a pro-life campaign ad from Rep. Marsha Blackburn, an action that would have been illegal if done by a TV or radio station. Twitter has refused sponsored tweets from immigration opponents, saying its hate-speech policy is triggered by messages such as “the fiscal cost created by illegal immigrants of $746.3b compares to total a cost of deportation of $124.1b.”
Google, Facebook and Twitter place stricter content policies on advertisers than general users. There are legitimate reasons for this. The tech companies are sensitive to accusations that they not only profit from controversial content but also fund it by giving its creator a slice of the ad revenue.
When virtually all online advertising goes through two companies, however, they have the power to harm websites arbitrarily. One political blog that posted an article trying to distinguish the “alt-right” from white nationalism received a warning email from Google’s AdSense team. An editor took the article down, explaining to readers that the blog “needs revenue from the Google ad platform in order to survive.” You needn’t agree with the editorial decision to publish the article to be troubled by Google’s vetoing it.
In his 2014 book “Zero to One,” Peter Thiel notes that because Google “doesn’t have to worry about competing with anyone, it has wider latitude to care about . . . its impact on the wider world.” If executives at a Silicon Valley monopoly believe that censoring certain content will push the world in a positive direction, market pressures cannot sufficiently restrain them.
Journalists also argue that tech companies are pushing media toward the lowest common denominator. Social media rewards clickbait—sensational headlines that confirm readers’ biases. Google and Facebook’s advertising duopoly bleeds traditional publishers of the revenue needed to produce high-quality news. At the same time, Google’s search engine is biased against subscription content, depleting another source of funding.
The bottom line is that Google’s and Facebook’s advertising policies and algorithms make it less profitable to produce high-quality journalism from any perspective. Their duopoly also gives tech executives the power to defund and block content they personally object to without taking a major hit to the bottom line.
While these two companies have faced little antitrust scrutiny, the Justice Department has filed suit to block AT&T’s purchase of Time Warner. But look how Randall Stephenson, AT&T’s chief executive, explained this summer one hope for the merger: “Once we complete our acquisition of Time Warner Inc., we believe there is an opportunity to build an automated advertising platform that can do for premium video and TV advertising what the search and social media companies have done for digital advertising.” Now the Justice Department’s lawsuit may perversely entrench the Google and Facebook duopoly.
In October 2016, Donald Trump’s economic adviser Peter Navarro advocated breaking up “the new media conglomerate oligopolies that have gained enormous control over our information, intrude into our personal lives, and in this election, are attempting to unduly influence America’s political process.” Mr. Navarro chose the wrong target. Antitrust authorities ought to be concerned about the undue influence of Google and Facebook.