We examine how local news monopolies affect misperceptions about the size of the immigrant population in Germany. We propose a theoretical framework in which heterogeneous information from different local news outlets diffuses through social inter- actions. We posit that indirect exposure to information from multiple sources leads to more accurate beliefs in competitive markets. To causally identify the effect of local news monopolies on misperceptions, we exploit overlapping newspaper coverage areas as a source of exogenous variation in the number of available outlets. We estimate that local news monopolies increase misperceptions by 38%. We empirically demonstrate that the effect of media monopolies hinges on social interactions. For individuals with fewer close social contacts, misperceptions remain unaffected by local news monopolies. Our results suggest that consolidation in the market for news decreases constituents’ knowledge about critical policy issues.