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Study: How The Power Of Facebook And Google Affects Local Communities

RACHEL MARTIN, HOST:

So Google and Facebook can make our lives easier, right? But they can also be harmful to local communities, whether that means monopolizing advertising dollars or spreading misinformation. A new study from the progressive American Economic Liberties Project exposes some of these dangers. Pat Garofalo is the lead author. He started with a story that we can all relate to - ordering takeout by starting with a Google search.

PAT GAROFALO: You enter what you're looking for into the search box, and you're going to get a neutral arbiter who is going to give you the best information. Maybe that best information is some Yelp reviews, maybe it's a direct link to the closest Thai restaurant. That's what we expect when we get onto Google.

But that's not actually what Google does. Because the way Google makes money is through advertising, it has an incentive to keep you within Google's ecosystem. A sort of startling stat that is in the report is that less than half of Google searches now result in a click away from Google, even if going to some other website would actually be more useful.

MARTIN: I want to ask about Facebook in particular, too, when it comes to disinformation. You say in the report this can actually end up having a real impact on local government, on local policies, right? Can you give us an example of that?

GAROFALO: Yeah, I talked a little bit about Holyoke, Mass. And it was a town that used to have a thriving local news industry. Because Facebook and Google have monopolized the digital ad market and they now take all the revenue that used to support local news, there are very few news outlets in that town. And so instead, what's cropped up is Facebook groups that are run by folks who traffic in conspiracy and who traffic in disinformation.

And so the local officials I talked to there say that they now spend their time, instead of, you know, thinking about how to fix potholes or fund local schools, knocking down conspiracy theories that crop up on Facebook. And it's not to say that the government's position is necessarily always right, but there used to be a sort of neutral arbiter in the middle. And that's just bad for local information and for local democracy.

MARTIN: Obviously, as we approach the November election, there's a lot of focus on how misinformation is spread and social media companies - Facebook, in particular - how they end up elevating disinformation. They're aware of this. I mean, Facebook has - is talking a lot about what they're doing on this front. They have an initiative to register voters and another to combat election misinformation explicitly. Mark Zuckerberg and his wife Priscilla Chan just announced that they've donated $300 million to strengthen state, county and local election infrastructure ahead of November. How do you see all of that? Is it a step in the right direction?

GAROFALO: No, because they don't get to the root of the problem, which is Facebook's business model. Facebook makes money by keeping you on Facebook. And the way to keep you on Facebook is to always elevate the sensational, the conspiracy-laden to just keep you coming back and clicking and clicking and clicking, and then selling those clicks to advertisers. That's how they make money. So until you change that business model, anything else they do is just a Band-Aid.

MARTIN: So you've got some prescriptions. There is a way to circumvent the power of these companies when it comes to their effect on local communities. What are they?

GAROFALO: At the federal government, we recommend simply breaking up these companies, spinning off some of the acquisitions they have made in order to provide competition. You can see a way in which, say, spinning off Google Maps from the main part of Google would disincentivize Google Search from prioritizing Google Maps. Maybe they just start directing you to the most useful mapping product, even if it's something else. The FTC can step in and regulate these companies.

And then at the local level, the part of the report we really haven't talked about yet is how much money these two companies collect from local taxpayers. They come riding into a town and say, hey, we want to build a data center, and local officials, because they think that this will be good for the local economy, give Facebook and Google tax breaks, cheap land, circumvent environmental review, things like that under the theory that this will create jobs and boost the local economy really good. And that second part doesn't actually happen. Instead, Facebook and Google just walk off with local resources. So local governments need to really think hard about not doing that.

MARTIN: But it sounds like there is still no competition for these companies and these kinds of platforms. Like, we live in this digital world. And if you're a mom and pop shop in a local town, you rely on Google searches and Facebook shares to get your advertising out there.

GAROFALO: Absolutely, and that's why we need to treat these guys as the vital communication networks they are, like the telephone. And so that requires both breaking them up into smaller, more manageable groups and then regulating them so that they have to treat everyone fairly so that they can't turn into these walled gardens that are only about boosting their profits at the expense of everyone else.

MARTIN: Pat Garofalo is director of state and local policy at the American Economic Liberties Project, a progressive think tank here in Washington, D.C. Thanks so much for talking with us. We appreciate it.

GAROFALO: Hey, thank you so much for having me.

MARTIN: And just a note here - Facebook is an NPR funder. Transcript provided by NPR, Copyright NPR.