Assistant Attorney General Jonathan Kanter Delivers Keynote at Open Markets Institute's “Fixing the Information Crisis Before It's Too Late (for Democracy)”

Thank you for the introduction, Kai. Thank you to the Open Markets Institute and The Guardian US for organizing today’s event. I am happy to be here for this important conversation. I could not imagine a more important topic.

The free flow of information and the exchange of ideas is the lifeblood of our cultural lives and our democracy. Humans need connections to one another like they need air and water. And a democracy needs citizens to exchange information and ideas. That is what democracy is all about: competing ideas in a debate that plays out freely over time. With freedom of thought and expression, democracy thrives. In contrast, the first goal of the tyrant is to control thought and information.

That is why the Founders made freedom of speech the very first right protected in our Bill of Rights. They understood deeply and personally the threats that government could pose to the marketplace of ideas on which democracy depends.

Ben Franklin was not just a champion of a free press and free speech, but a journalist and publisher himself. He committed to that work because he believed in “the sacred liberty of the press” and “the liberty of discussing the propriety of public measures and political opinions.”[1] So the Constitution fervently protected the public from government control of the press and of speech.

In the modern era, there are new threats to the marketplace of ideas. The Founders could not have imagined private corporations with the power to shape, control, or stifle freedom of speech on a national scale. It was just inconceivable in an era when the town square was … a square in the middle of town.

The only electric bottleneck Ben Franklin ever encountered was tied between a kite and a key. He could not have imagined that one day that wire would carry every Federalist Paper, all of journalism, all debate, every kind of connection between citizens. 

If he had, Franklin would have immediately seen the threat we face today. If a single platform of 1’s and 0’s hosts the marketplace of ideas, whoever controls that platform controls our thoughts, and our democracy will not survive.

Today we are confronting that challenge. The rise of dominant platforms in the marketplace of ideas threatens journalism, the exchange of information, and the marketplace of ideas. Powerful corporations that stand between citizens and writers, musicians, artists, and journalists exert enormous control and influence.

This is a dynamic that is playing out in many different areas. I would like to talk today about journalism, publishing, and AI in particular. These are industries where dominant intermediaries act as gatekeepers to the information commons. And as gatekeepers, they have the ability to extract more than their fair share from both sides of the market.

But this is about so much more than the price or output of these products and services. What is at stake is speech itself. Private corporations decide what ideas are worthy, whose voices are amplified, and what messages are disseminated and to whom. What is at stake is the very way in which people gather information and make decisions, and the very existence of the people who live to share their ideas, thoughts, and creations.  

Franklin might have also seen the solution to this problem. In a world where information flows over cables between silicon chips, we need more than just the one strand he tied to his kite and key.

Competition between many platforms means a small number of dominant platforms do not have outsized power over speech. And when there are more competitors, journalists and content creators have more opportunities to bargain for the value of their content, while consumers have the ability to vote with their feet.

That is a world where private citizens can benefit from different viewpoints and make informed decisions about how they want to live their lives. Where competition among many online platforms flourishes, no one company can exercise control over the flow of information in our democracy.

In the absence of competition, there are few if any incentives to compete to offer solutions for common problems. But competition can constrain behavior and even facilitate market-based solutions—whether it be how to fairly compensate creators of content, or how to combat the spread of false information and harmful content online.

Today, I would like to talk about three areas where this dynamic is playing out.

1. Journalism

Journalism is under threat in large part due to consolidation in the advertising market.

The statistics are staggering. In 2023, an average of 2.5 newspapers closed each week.[2] Since 2005, the country has lost one-third of its newspapers.[3] And it has lost two-thirds of its newspaper journalists in that same period.[4]

This is in no small part due to the ripple effects from changes in how advertising works. Traditionally, news organizations have relied on subscriptions and advertising to fund their reporting and to pay their journalists. But with the rise of the Internet, readers increasingly turned to online aggregators for news.

Today, the majority of Americans prefer to get their news on a digital device, rather than from TV, radio, or print.[5] Americans now get their news from news websites, searches, and from social media.[6] Social media is especially prominent. According to a recent survey, about half of U.S. adult today get news from social media at least sometimes.[7]

This means that powerful platforms are acting as middlemen between newspapers and readers. Digital advertising dollars now go to these middlemen, rather than to the journalists and news organizations that do the reporting.

In turn, newspapers now depend on these platforms for the distribution of their content. They need the platforms to reach the readership, and they have little negotiating power. And without sufficient advertising revenue, independent journalism suffers.

Competition is a key piece of the puzzle toward a solution to these problems. Competition paves the way for innovation and the development of new business models and new economic relationships.

Inter-platform competition could shift the balance of power and create different bargaining dynamics for newspapers. Competition among digital advertisers can lead the way toward a fairer compensation structure for those who do the on-the-ground reporting and write the articles.

Again, what is at stake here is not just the price of the newspaper. It is about journalism itself. It is about whether our society can support the journalists that do the hard work of separating truth from falsehood to shed light on the most important issues of our day. Without the journalists who do this work, our democracy cannot thrive.

2. Publishing

The trend toward consolidation has threatened another industry necessary for ideas to flourish — publishing.

The Antitrust Division brought a successful challenge to halt the merger between Penguin Random House and Simon & Schuster. These are two of the largest book publishers in the industry. The proposed merger would have consolidated the “big 5” publishers into the “big 4” — further tightening the oligopoly that authors faced.

But our challenge to that merger was not just based on a theory that the price of books would increase due to reduced competition. It was that the merger meant that authors would receive lower advances. That would not only harm authors, but ultimately, it could lead to fewer books and a diminished diversity of viewpoints as fewer authors would invest the time and effort to write the next best-seller.

Authors and books are more than just economic units. They are vital to the marketplace of ideas and the public discourse.

Our victory in that case protected the vital competition for books. It was a victory for authors, for readers, and for the free exchange of ideas.

3. Artificial Intelligence

Last but not least, let me turn to AI.

AI will reshape all of the information and content industries. It will change the way we consume our news. It will affect the way in which content is created. And it will change the way that we interact with information.

Without meaningful competition, the same threats that plague journalism will spread to all other content creation markets.

Generative AI leverages human creations. Journalists, authors, artists, musicians — all types of human creativity become inputs into large-scale AI models that can swallow up and regurgitate their work.

AI carries the potential to create dominant companies that can exploit monopsony power at levels we have never seen before — a dominant buyer for all of the world’s ideas.

But what incentives will there be to create if the ideas of our writers, actors, and entertainers, can simply be taken without just compensation and through the exercise of monopsony power? What incentives will there be for journalists to seek out the truth when their work is uncompensated?

What does it mean for our society if we cannot protect those who live to share the ideas and creativity with the world?

The future of free expression depends on how we answer these questions as a society. Our democratic values depend on our ability to save ideas. We must do all we can to promote competition and innovation in the industries necessary for ideas and democracy to flourish.

Department of Justice
Office of the U.S. Attorney
Middle District of Alabama

Source: Justice.gov