US newspapers plan to strike tech giants Google, Facebook over ad revenue

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Newspapers in the US are planning to strike at the tech giants Google and Facebook
Newspapers in the US are planning to strike at the tech giants Google and Facebook

San Francisco : With Facebook and Google grabbing vast majority of the digital ad market, many newspapers in the US are planning to strike at the tech giants to get an antitrust exemption from Congress to negotiate collectively over advertising revenue.

According to a report in Washington Times on Monday, the News Media Alliance, that represents roughly 2,000 US' national and local newspapers including The New York Times, The Wall Street Journal and The Washington Post, has started reaching out to Capitol Hill to sound out the chances for an exemption.

"We're not looking to break up Google and Facebook by saying they have a duopoly here, what we are saying is there has got to be a way to improve the business model," Paul Boyle, Senior Vice President (Public Policy) News Media Alliance was quoted as saying.

According to Boyle, newspapers had thought to allow their articles to be shared on social media would earn them a piece of the digital ad market.

"But Facebook doesn't always allow the reader to click through to the publisher's website, denying the news website ad revenue from that reader," he stated.

Facebook, however, said the company is committed to helping quality journalism thrive on its platform. 

"We have already been working with publishers and we're making progress through our work and have more work to do," the report quoted Campbell Brown, Head of News Partnerships at Facebook, as saying.

According to media reports, Google and Facebook control nearly two-thirds of the digital advertising industry, and newspaper revenue from advertisements declined to $16 billion in 2016, down from about $50 billion 10 years earlier.

"Google and Facebook dominate web traffic and online ad income. Together, they account for more than 70 percent of the $73 billion spent each year on digital advertising, and they eat up most of the growth," David Chavern, President of News Media Alliance, was quoted as saying. 

"Nearly 80 percent of all online referral traffic comes from Google and Facebook. This is an immensely profitable business," Chavern said.

Reacting to the News Media Alliance's latest move, Google said it wanted to help news publishers succeed and lately, it had built numerous specialized products and technologies, developed specifically to help distribute fund, and support newspapers.

"This is a priority and we remain deeply committed to helping publishers with both their challenges and their opportunities," Google was quoted as saying in a press statement.