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Illustration: Sarah Grillo/Axios

Facebook and Google are hollowing out local communities by serving as vectors for misinformation while hobbling local journalism and collecting taxpayer subsidies, a new paper from progressive think tank the American Economic Liberties Project charges.

The big picture: Both companies cite benefits their platforms offer small businesses as a key defense against critiques of their size and power. The paper, dated Aug. 30, is sure to presage further scrutiny of the impact they've had on local communities.

Details: The brief, by Pat Garofalo, the group's director of state and local policy, argues that:

  • Google doesn't do enough to protect against fraud, allowing scammers to get their own numbers and websites listed on Google to the detriment of legitimate businesses.
  • Facebook, by design, boosts shoddy and sensationalist content, crowding out legitimate local news and information, all as it and Google have come to dominate the local advertising market that was long the lifeblood of community journalism.
  • Both have sucked up potentially billions in local taxpayer dollars via tax breaks as well as subsidies and discounts on utilities they've gotten in exchange for building data centers.

Garofalo recommends remedies including more antitrust enforcement at the federal and state levels and an end to preferential treatment by states and localities, either voluntarily or under force of law.

The other side: Facebook and Google both say their platforms help local communities thrive, making that a central plank in their CEOs' testimony before Congress last month.

  • Google on Friday stood up a website detailing ways it says its free services and advertising platforms have helped small businesses and delivered "thousands of dollars a year in value to the average American."
  • Facebook is positioning itself as a friend to small businesses in a new feud with Apple.

What's next: The American Economic Liberties Project, which receives funding from eBay founder Pierre Omidyar, is one of several dozen advocacy groups holding an online event Tuesday in which panelists, including early Facebook investor-turned-critic Roger McNamee, will discuss curbing the power of Big Tech.

Go deeper

Nov 20, 2020 - Technology

Biden's Day 1 challenges: Misinformation flood control

Illustration: Eniola Odetunde/Axios

President-elect Joe Biden will enter office with no fast fixes at hand to stem a tide of online misinformation that has shaped election-year politics and, unchecked, could undermine his presidency.

Where it stands: Election and coronavirus misinformation spreading widely on digital platforms has already done serious damage to the U.S., and it's bound to go into overdrive as the Biden administration starts enacting its agenda.

Axios roundtable on the future of the workforce

On Wednesday November 18 Axios' Sara Fischer and Dan Primack hosted the second in a series of three virtual roundtables, featuring policymakers, academics, and nonprofit leaders to discuss the workforce recovery after COVID-19 and the importance of digital tools, skills, and access.

Markle Foundation Chief Operating Officer Beth F. Cobert and Google.org Head of Impact and Insights Andrew Dunckelman highlighted how the pandemic has accelerated a shift to online businesses, citing research from the National Skills Coalition that reported that 1 in 3 American workers has limited or no digital skills. Roundtable participants discussed how to approach that critical digital skills gap and more broadly, the pandemic's affect on businesses and workers.

Sonja Diaz, Founding Director at UCLA's Latino Policy & Politics Initiative discussed how to create policy solutions for the businesses most acutely affected by the pandemic.

  • "A lot of the gains made by minority businesses have been outside of the regulatory sphere, meaning that they've been able to do this because of personal connections, community connections. They're under-financed and under-banked. So if we think about policy interventions, we know that tailoring and centering them on the needs of women and minority owned businesses is going to be a return on investment."

Rep. Jan Schakowsky (D-IL) highlighted how the digital economy is a critical part of COVID-19 economic recovery.

  • "I think what the Americans are waiting for right now is the opportunity to have something really big and bold that speaks to them about their future and their jobs. And I certainly think that the digital economy can be built right into that."

Traci Scott, Workforce Vice President at the National Urban League stressed the importance of meeting users where they're at in terms of digital skills training.

  • "We would have virtual job fairs, but what we found is that people didn't know how to work Zoom. They had never navigated through Zoom. So then we realized that we had to go even deeper in our training just to train individuals on just how to use something that we all take advantage of."

Trevor Parham, Founder and Director of Oakstop and the Oakland Black Business Fund discussed how to see digital tools as something beyond just economic exchange.

  • "We need to focus not just on tools that are going to allow people to create economic transactions, but on whether it is technology or other tools or infrastructure that is going to allow us to restore our ability to be a real human community."

Read the recap of our first roundtable event here.

Thank you Google for sponsoring this event.

USAID chief tests positive for coronavirus

An Air Force cargo jet delivers USAID supplies to Russia earlier this year. Photo: Mikhail Metzel/TASS via Getty Images

The acting administrator of the United States Agency for International Development informed senior staff Wednesday he has tested positive for coronavirus, two sources familiar with the call tell Axios.

Why it matters: John Barsa, who staffers say rarely wears a mask in their office, is the latest in a series of senior administration officials to contract the virus. His positive diagnosis comes amid broader turmoil at the agency following the election.