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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

Dion Rabouin, author of Markets
Dec 8, 2020 - Economy & Business

Why Congress is doubling down on the Paycheck Protection Program

Illustration: Sarah Grillo/Axios

Renewing the Paycheck Protection Program (PPP) is one of the few things Democrats and Republicans agree on and is on the short list of must-have programs for any coronavirus relief package passed by Congress before year-end. The only problem: PPP has been a major disappointment for small businesses.

What happened: While 5.2 million businesses received funding through the program, it left out many smaller mom and pop shops — disproportionately women-, minority- and immigrant-led firms. Millions ended up closing their doors.

49 mins ago - Technology
Column / Tech Agenda

The new digital extortion

Shoshana Gordon/Axios

If you run a hospital, a bank, a utility or a city, chances are you'll be hit with a ransomware attack. Given the choice between losing your precious data or paying up, chances are you'll pay.

Why it matters: Paying the hackers is the clear short-term answer for most organizations hit with these devastating attacks, but it's a long-term societal disaster, encouraging hackers to continue their lucrative extortion schemes.

1 hour ago - Health

CDC mask guidance sparks confusion, questions

Illustration: Sarah Grillo/Axios

The CDC's surprise guidance last week freeing the fully vaccinated to go maskless sowed plenty of concerns across the country— even earning the "Saturday Night Live" treatment for all the questions it spurred.

Why it matters: With plenty of Americans still unvaccinated — and without any good way to confirm who has been vaccinated — some experts worry this could put many at increased risk.