This is an English translation of a Japanese language article to be published in the near future in “Ronza”. The reason for this is because I want as many people as possible to read this article, which I have put a lot of effort into writing in a long time.

 

 

 

On October 6, 2020, the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commerce, and Administrative Law summarized the results of nearly 16 months of research in the 449-page Study of Competition in the Digital Marketplace (https://judiciary.house.gov/uploadedfiles/investigation_of_competition_in_digital_markets_majority_staff_report_and_recommendations.pdf) was published (although the URL has been inaccessible for some time after publication. It’s continuing). It examines the problems that the “Big Giants” – Amazon, Apple, Facebook, and Google – have grown up with anti-competitive and monopolistic tactics from a variety of perspectives, and recommends overhauling federal laws to allow government regulators to keep these companies in check. Of particular interest is the proposed requirement for “structural separation,” which would prohibit dominant firms from competing with other firms in markets they control.

On the other hand, Japan’s Fair Trade Commission sought public comments on the Draft Anti-Monopoly Law’s Approach to Abuse of Superior Bargaining Position in Transactions between Digital Platformers and Consumers Who Provide Personal Information and Other Information (Draft) by the end of September 2019, and published the results in December of that year.

All of the aforementioned Big Giants are digital platformers that use the Internet to provide a venue for connecting individuals to individuals, individuals to companies, and companies to companies – all actors in all kinds of activities – so it is clear that both Japan and the United States are taking a hard look at these huge digital platformers.

However, a comparison of these two movements reveals a point of contention that is unique to the U.S. and not to Japan. That is the issue of platform monopoly leading to the decline of journalism. Unfortunately, people in Japan are not aware of this point and do not understand the seriousness of the problem. Hence, I would like to examine this issue here.

 

Japan’s Discussion Points

The Japanese FTC is only focusing on “abuse of a superior position” under Section 2(9)(5) of the Antitrust Act by digital platformers. This “abuse of a superior position” consists of three elements: “superior position,” “unreasonable in light of normal business practices” and “abusive conduct. They are trying to fill out detailed legal arguments for each of these three elements.

For example, with regard to “acts of abuse,” the following actions in the “acquisition” or “use” of personal information by a platform performer are considered to be “abusive”. Improper acquisition of personal information etc. includes: (1) acquiring personal information without informing the consumer of the purpose of use; (2) acquiring personal information beyond the scope necessary to achieve the purpose of use and against the consumer’s will; and (3) acquiring personal information without taking the necessary and appropriate measures for the safe management of personal data. — and so on. On the other hand, improper “use” of personal information and other information includes: (1) using personal information against the consumer’s will beyond the scope necessary to achieve the purpose of use; and (2) using personal information without taking necessary and appropriate measures for the safe management of personal data.

Both of these cases involve so-called “invasion of privacy rights”. The JFTC, as an enforcement agency of the Anti-Monopoly Law, seems to want to strengthen the regulation of platformers within the limits of “abuse of a superior position” under the law.

 

A U.S. Perspective

In contrast, the aforementioned report, led by US Democratic Party members of Congress, discusses the impact of platforms on the market much more extensively than in Japan. The report examines the impact of platformers on four aspects of the market: (1) innovation and entrepreneurship, (2) privacy and data protection, (3) a free and diverse press, and (4) political and economic freedom, and takes a broader view than in Japan. This is an attempt to tighten the regulation of platformers.

For the sake of paper space, I’d like to focus on the perspective that a free and diverse press is being hit by platformers. If more and more people are reading “Google News” and Facebook “News Feeds” and the like, and as a result, the existing press is being adversely affected and this is hindering the formation of the public discourse that is so fundamental to our democracy, then this discussion of platform regulation in this area is a good place to start. It’s only natural to do so.

 

The Decline of American Journalism

On pages 57-58 of the report, it states.

“Since 2006, the news industry has been in economic freefall, primarily due to a massive decrease in advertising revenue. Both print and broadcast news organizations rely heavily on advertising revenue to support their operations, and as the market has shifted to digital platforms, news organizations have seen the value of their advertising space plummet steeply. For newspapers, advertising fell from $49 billion in 2006 to $16.5 billion in 2017. This decrease has been felt by national and local news sources alike. As total annual advertising revenues have fallen over 62% across the industry since 2008, one major national newspaper told the Subcommittee that its annual advertising revenue has fallen 48% over that period. Additionally, ethnic news outlets have suffered from the shift from broadcast and print ads. Regarding television and radio broadcast news, the National Association of Broadcasters told the Subcommittee, “[T]his year, the U.S. advertising revenue of a single company Google are projected to exceed the combined ad revenue of all TV and radio stations in the country by over $ 8 billion.” “

Even more shocking is the following statement on page 61: “According to researchers at the University of North Carolina School of Media and Journalism, the U.S. has lost nearly 1,800 newspapers to closures or mergers, 70 percent of which were in metropolitan areas.”

In contrast, online news is thriving. For example, in January 2018, news organizations were adversely affected when Facebook adjusted its “news feed” algorithm to prioritize the content that users wanted to see, according to the report. As a result, referral traffic from Facebook to news outlets’ sites decreased by 33%. The subcommittee has “received evidence that the dominance of several online platforms has created a significant imbalance in bargaining power,” it wrote.

This imbalance has led to a decline in advertising revenue for existing mass media. The report introduces the report, which notes that news disseminators are concerned that the significant concentration on the online advertising market, known as the digital advertising monopoly, is hurting the quality and availability of journalism, and that “as a result of this dominance, there has been a significant decline in advertising revenue to news publishers.”

 Page 388 of the report states, “To address this imbalance of bargaining power, we recommend that the Subcommittee consider legislation to provide news publishers and broadcasters with a narrowly tailored and temporary safe harbor to collectively negotiate with dominant online platforms.”

Already in April 2019, Subcommittee Chairman David Cicilline and others have recommended that a safe harbor be granted if it (1) directly relates to the quality, accuracy, attribution, brand, or interoperability of the news; (2) benefits the entire industry, not just some originators, and does not discriminate against other news outlets; and (3) is not used for any other purpose A bill has been introduced to allow for the “coordination” of news outlets and broadcasters, which should be the main competitors, provided that it is directly related to these negotiations and is necessary on a go-between basis. The following words from Chairman Cicilline, which he said at the time of submission, strike a chord.

“The free press is a cornerstone of our democracy. Journalists keep the public informed, root out corruption , and hold the powerful accountable. This bill will provide a much needed lifeline to local publishers who have been crushed by Google and Facebook. It’s about time we take a stand on this issue.”

 

Is journalism “self-help”?

The sense of urgency presented here is shared by The Economist. Its October 17, 2020 issue, in a column called “Schumpeter,” takes up the issue. However, for a magazine that has always respected “freedom,” the tone is not necessarily journalism-friendly. The title, ” Should big tech save newspapers? No. They need to save themselves ” (https://www.economist.com/business/2020/10/17/should-big-tech-save-newspapers), sums it up well.

With the reality that “in the past 20 years newspapers’ ad revenues in America have fallen by about 80% (to Depression-era levels), while circulation has roughly fallen by half,” governments are rather wary of the desire to curb the movement of technology giants because of the decline of journalism, which has sustained democracy.

For example, the Economist introduced the issue of trying to force Google and Facebook to pay for news linked on their platforms as “an array of government interventions in recent months aimed at putting the squeeze on Google and Facebook.” In April 2020, the French authorities ordered Google to pay content royalties to French media, and the Australian government has announced plans to require Google and Facebook to share advertising revenue with domestic media.

Aware of these developments, Google announced in June 2020 that it would pay some media companies in Australia, Brazil and Germany for the use of quality content. It has indicated that it intends to sign agreements with other media companies as well; in 2019, Facebook has also agreed to pay licensing fees to News Corp. to display some articles.

But an article in The Economist condemns the newspaper company mercilessly. It says that it is “far-fetched” to say that the Big Giants are looting newspapers. Because “the real failure is that papers have lost control of distribution to Google and Facebook, making it harder to monetize the traffic.” To put it bluntly, if the state easily supports newspapers that are mismanaged, it “undermines the principles of an independent press”. Hence the need to produce a product that readers are willing to pay a fair price for.

On the other hand, the “New York Times” in its lengthy article, “The Problem of Free Speech in an Age of Disinformation” (https://www.nytimes.com/2020/10/13/magazine/free-speech.html), also touches on the issue. There, Miguel Poiares Maduro, board chairman of the European Digital Media Observatory (EDMO), an EU project to study “disinformation” that began its work in June 2020, treated the platform like an essential facility, like a European version of a public utility and propose to impose more regulations.

 

The Decline of Journalism in Japan

The same trend of decline in American journalism is taking place in Japan. Nevertheless, there does not seem to be a widespread movement to associate this decline with platforming. In Japan, rather, the focus seems to have been exclusively on the political pressures that have led to the surrender of the mass media: in February 2016, then-Minister of Internal Affairs and Communications Sanae Takaichi stated at a meeting of the Budget Committee of the House of Representatives that “if broadcasters repeatedly broadcast without political impartiality and there is no improvement at all despite administrative guidance, what can be done about it? A typical example of this is the fact that he mentioned the possibility of ordering the airwaves to be shut down under Article 76 of the Radio Act, citing a violation of Article 4 of the Act.

But apart from these issues, it is hard to ignore the perspective that, as the U.S. report points out, the excessive bargaining power of platformers, which can be described as monopolistic, is damaging the management of existing journalism, which in turn is undermining healthy journalism. Of course, there is much to reform on the part of journalism, but on the other hand, we must not allow platformers to be sidelined. It would be better if the excessive “use of power” by platform players were specifically investigated and journalism were thoroughly denounced, but journalism itself may have fallen to the point where it seems that it no longer has the power to do so.

The reality of journalism’s decline can be seen in “Results of a Survey of Journalists on the ‘Crisis of the Press’ (Summary),” released in April 2020 by the Conference of Media and Information Workers Union of Japan (https://toyokeizai.net/sp/vfiles/2020/04/pressenquete.pdf). In it, there is a statement as follows.

“When we reported on facts that were inconvenient for a certain ministry and the voice of the people in the field, our company received a complaint from a certain ministry executive (our boss), who is a close friend of the ministry’s executive. Moreover, a certain ministry official told our advertiser (a certain ministry official’s descent agency) to complain to us and suggest to withdraw the advertisement, which was strongly criticized by the advertiser. When we reported on the criticism of a certain governor, a protest letter was delivered to us and he also threatened to significantly reduce the budget for this fiscal year for a public related business (a separate business) that we undertake. They have also involved our clients in their criticism. (Newspaper and news agency employee).”

If you’re interested, I’d like to invite you to watch a video piece called “Press Buzz,” about the editorial team of the New York-based news distribution app Press Buzz. It’s a fictional story, but it shows us the true state of today’s Japanese media with more reality than reality.

 

The Mire of Mass Media Decline

In fact, the decline of mass media leads to further “rotten” proliferation. The New York Times Electronic Edition reported on October 18, 2020, “As Local News Dies, a Pay-for-Play Network Rises in Its Plac” (https://www.nytimes.com/2020/10/18/technology/timpone-local-news-metric-media.html) reports that a network of about 1,300 websites has been set up in all 50 states to fill the void left by America’s dying local newspapers, with coverage ordered by Republican groups and PR firms. In other words, PR and propaganda are being fed to the public in the form of articles. If left unchecked, trust in the media will only decline.

The same kind of thing is sure to happen in Japan. In fact, there is a high possibility that information is being passed on as news while accepting money behind the scenes, even now. I am particularly suspicious of TV stations that create programs under the guise of “information variety” or “news variety”. The reality is that local television news programs have become gourmet programs, and they seem to have abandoned their role as news organizations.

The reality is that Japanese newspapers also contain “deliberate and inaccurate information” in their articles, and trust in the media is bound to decline further in the future.

If this reality is left unchecked, corruption among politicians and public officials and scandals among sponsors will continue to infiltrate the media, making it difficult to share a credible and informed public opinion. This is exactly why Japan needs laws and regulations to protect journalism in the same way as the United States. The time has come to seriously consider the regulation of platforms from this perspective.

Unfortunately, there has been little debate in Japan about the relationship between the decline of journalism and the platformers. Like the tone of The Economist, I believe that if the content of newspapers and television itself were to be improved more, it would still attract readers and viewers. But, like Maduro, I also don’t think we should be willing to let the status quo of platformers like Yahoo News and Smart News go unchallenged. I am keenly aware that the time has come for a robust debate to take place.