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Digital markets change faster than our understanding of them. Two decades after newspapers began to introduce online editions, news organisations are still adjusting to the economic realities of the digital age. It has taken a particularly long time for one early promise of the internet — that online advertising would make free-to-consumer news a viable business — to be revealed as, in large part, an illusion.

As it turns out, the majority of the value in the online advertising has been captured by just two companies: Google and Facebook. In 2017 that duopoly is expected to capture 84 per cent of global digital ad spending, China excluded, according to the media buying agency GroupM.

The strain on news organisations globally has been acute. In Australia, competition authorities are looking into whether the digital platforms are a threat to competition. The chairman of the Australian Competition and Consumer Commission cited concerns “that digital platforms are affecting traditional media’s ability to fund the development of content”. An Australian parliamentary inquiry into the future of journalism has raised the possibility of levies on tech companies to support journalism. Google has objected that “handouts, regulations and intervention” are not the answer.

On handouts, Google is correct. Though journalism funded by foundations, for example, has much to offer, it must be a complement rather than a substitute for strong, competitive news businesses. News organisations must fight still harder in the face of digital disintermediation. Some news groups still offer free content in the hope that a new advertising model will appear that will make losses disappear. As the optimists wait for Godot, consumers’ notion that news is costless is reinforced. The FT has chosen its own path focusing on subscriptions and it is working. But the market continues to evolve.

There are signs that the news industry’s efforts to fight its own corner are paying off. Google has dropped its “first click free” policy that required publishers to give some stories away in order to appear high in its search rankings. A Google News executive acknowledged that “advertising alone can no longer pay for high-quality journalism”.

This is progress. Whether it is a substitute for antitrust enforcement is another question — and a question that extends beyond the news and digital advertising businesses.

Across a variety of markets, the biggest tech companies wield awesome power. Google, Facebook, Apple, Amazon, Microsoft, Tencent and Alibaba have an aggregate market value of $4tn and generated nearly $150bn in cash profits in 2016. Are the giants a threat to competition? Should they, for example, be prevented from forestalling competition by going on a multibillion-dollar shopping spree, snapping up every innovative upstart?

The issue is worth considering. The problem lies in a conception of competition that has held sway, particularly in US law, for the past 30 years or so. This identifies anti-competitive behaviour with high prices, rather than with market dominance itself. If you think failures of market competition can only be expressed by high prices, how can companies such as Facebook or Google, which give their products away, act anti-competitively?

The evidence from the news business — among others — is that there may well be more to competition than price. The Australian competition authorities are right to inquire into how companies can leverage low prices in one area to create monopoly profits in another. Other countries should follow.

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