Those sympathetic to Big Tech are undermining the long-term welfare of consumers and small businesses through their use of market power to crowd out competition, News Media Alliance president and chief executive David Chavern says.

In a comment piece for the Des Moines Register, he says Google and Facebook’s stranglehold on the online news and ad market has allowed them to benefit from journalistic content without paying for it.

“While the internet has succeeded in becoming a fundamental part of modern life, it is hard to shake the feeling that it has fallen woefully short of its highest aspirations promised by Silicon Valley,” he says. “In the internet’s nascent days, its innovative possibilities seemed limitless, and its open and democratic culture created a feeling that it would drive opportunities that would benefit everyone.”

But Chavern says “that is clearly not how things have played out.

“Today the internet has become controlled by a handful of companies who exercise an unprecedented level of control over people’s lives. When these companies were in their infancy, like the internet itself, they were synonymous with innovation. However, these tech giants are abusing their market power to undermine fair competition and free-market capitalism.”

Chavern says those sympathetic to Big Tech would argue that reining in these companies would harm consumers because of the low prices and broad services they provide. But he says sympathisers are undermining the long-term welfare of consumers and small businesses because these companies use their market power and low prices to crowd out competition, further perpetuate their monopoly and reduce incentives for innovation.

“For example, some Big Tech companies have portrayed themselves as benevolent members of their community while simultaneously deploying business practices that have steadily hollowed-out small businesses across the nation. During Big Tech’s ascent over commerce, the number of small retailers has fallen by 65,000, and today three-quarters of independent retailers see Big Tech's dominance as a major threat to their survival.

He cites Iowa senator Chuck Grassley, saying the veteran of fighting consolidation in the agriculture industry has been able to see through the shaky arguments made by Big Tech champions and propose real solutions to hold the tech giants accountable.

“Grassley has introduced a bipartisan bill, the American Innovation and Choice Act, that would prohibit dominant platforms from abusing their gatekeeper power by favouring their own products or services over their rivals, often small and local businesses, and to establish significant penalties for violations.

“The senator understands that legislation reining in Big Tech is not an indictment of Big Tech’s success or a repudiation of their excellent products and services for their consumers. It is simply a way to provide commonsense, pro-market guardrails to ensure that small and local businesses have a fair and level playing field when using these dominant platforms to conduct their business.

“We hope that the senator could extend his leadership further to support other pro-competition and bipartisan pieces of legislation such as the Journalism Competition and Perseveration Act. The JCPA allows a four-year antitrust exemption to permit news organizations big and small to work together to negotiate with Google and Facebook to secure fair compensation for local journalism.

“Google and Facebook’s stranglehold on the online news and ad market has allowed them to benefit from journalistic content without paying for it – cutting off revenue needed to pay reporters, photographers, and editors to cover local news in their communities.”

More than 1,800 communities have lost their local newspapers since 2004, including 52 in Iowa. “Consequently, today, more than half of Iowans get their news from Facebook, which is increasingly filling the journalistic void with untrustworthy sources and misinformation and becoming America's de facto local news source.

Chavern says the American economy’s dynamism was built on a foundation of open markets and fair competition. “However, Big Tech’s monopoly power is destabilising the systems that are central to our prosperity, and American consumers, workers, businesses, and democracy are paying the price.

“While legislation is by no means a silver bullet to the sweeping economic and societal problems caused by Big Tech, it is an important way to help bring us closer to the egalitarian ideals that Silicon Valley promised us when the possibilities of the internet were limited only by our imagination.

“We encourage the rest of Congress to follow Grassley’s lead and act to rein in the unprecedented control that the tech giants increasingly have asserted over the internet and our daily lives.”