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U.S. Senate committee report calls unfair practices by tech companies a threat to local news

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U.S. Senate Commerce Committee ranking member Maria Cantwell, D-Washington, released a comprehensive report Tuesday, Oct. 27 showing the impact of the transformation of news online and the accompanying loss of revenue.

The report shows one factor of the revenue loss is the unfair and abusive practices by tech platforms, according to a news release from Cantwell. The impact of these practices indicates the need for Congress to provide the Federal Trade Commission (FTC) new authority to protect the local news industry across the nation.

“Local news across America creates competition and trusted information,” Cantwell said in the news release. “We shouldn’t let regional and community news die as local newspapers and broadcasters adjust to digital delivery because online giants are unfairly leveraging the advertising market against them.”

The report closely examines the unfair and abusive practices by major tech platforms that have contributed to the drastic revenue declines. The biggest online platforms unfairly use content, take local news consumer data, and divert customers away from local news websites, while providing little in return, according to the report. The report says Congress and the FTC should act to address these unfair and abusive practices to help sustain the competition that local news provides.

The report highlights the important role local news and journalists play in communities of all sizes throughout the country. The report shows innovative new models already being used by publishers and broadcasters based on their value as a trusted brand. However, COVID-19 is also having an adverse impact. The report shows a 45% decline in print ad revenue in 2020.

Local journalism is highly trusted in communities around the country. According to a 2019 study from Gallup and the Knight Foundation, Americans trust local news over national news by a two-to-one margin to “report the news without bias.” Local journalism has developed that trust based on transparency, accurate reporting, shining a light on crime and corruption, and holding officials accountable.

• By the end of 2020, overall newspaper revenue will have dropped 70% as compared to 20 years ago

• Local broadcasters lost more than 40% of their advertising revenue between 2000 and 2018, and they face an additional 40% loss this year alone due to the impacts of COVID-19

• Since 2005, newspapers have lost more than 40,000 newsroom employees – roughly 60% of their overall workforce; most states have lost more than 50% of their newsroom workforce

• Local newspapers will lay off another 7,000 newsroom employees in 2020 as a result of COVID-19, leaving only 30,000 left. At this pace, newspaper newsrooms will all but vanish within the next few years

While local newspapers and broadcasters around the country continue to face existing and new threats, like the COVID-19 pandemic, the report also demonstrates how the trust and community relationships they have built have created a new business model and new revenue streams to allow them to adapt and thrive in the digital era.

The full report is available by clicking here.

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