June 15, 2024


Digitally first class

How and why Congress needs to get big tech to start paying for news


Congress will try once again to save local journalism this year.

A key bill to stabilize the news industry, prevent further layoffs and position it for long-term survival is being revised and prepared for reintroduction by U.S. Sen. Amy Klobuchar and others.

The bipartisan Journalism Competition and Preservation Act (S 673) would “give these news outlets a fighting chance,” Klobuchar said at a Feb. 2 hearing the Minnesota Democrat hosted on the journalism crisis.

The JCPA would allow publishers to jointly negotiate with Google and Facebook, to secure fair compensation for news content the tech giants are profiting from.

Expect a bruising fight. When a similar policy was debated last year in Australia, a much smaller market, the platforms went ballistic. Google threatened to cut services across the nation and Facebook temporarily blocked all news on its platform.

Their threats backfired. The policy was enacted and all but a few outlets have since negotiated content licensing deals. I wouldn’t be surprised if platforms are stonewalling the last few outlets for political reasons, to cast doubt on the policy’s efficacy as the U.S. and other countries consider similar legislation.

Overall, Australia’s policy led to more journalists getting hired and a lot fewer layoffs, its outgoing competition chief, Rod Sims, told The Guardian last month. Sims estimates platforms are now paying more than $200 million yearly for news.

In preparation for debate when JCPA is reintroduced, here is a discussion of some common misconceptions about the policy.

Q: News outlets voluntarily put content on Google and Facebook. If they don’t like the terms, why not stop?

A: Media companies have to be on the platforms as they become more dependent on digital revenue. But they can’t get fair treatment if platforms abuse their monopolies, as federal investigations determined. There’s a “significant and growing asymmetry of power” between platforms and news organizations, a 2020 House antitrust report found.

Q: Outlets don’t need special treatment, they can negotiate on their own.

A: A few giant media companies have heft to negotiate with platforms. But the vast majority don’t, including more than 6,000 local newspapers providing most of America’s essential news coverage. Individually, they don’t have resources or leverage to negotiate content licensing deals with Google and Facebook.

Q: This mostly helps big corporations.

A: Not really. Again, giant outlets don’t need to band together. Smaller ones must work together to get properly paid by platforms. This proved true in Australia, where a coalition of small, rural newspapers secured compensation after the bargaining policy took effect.

Q: It’s for Rupert Murdoch.

A: That’s incorrect. The Wall Street Journal, owned by Murdoch’s News Corp, already made a licensing deal with Google last year, paying the Journal tens of millions a year for its content. It’s true that News Corp was an early advocate for Australia’s policy, which helped it secure licensing deals. Such policies are needed so other media companies receive similar support. If you hate Murdoch, opposing JCPA is shooting yourself in the foot, because the result would be that his outlets get sustainable revenue from content licensing and other news outlets do not.

Q: Making Google and Facebook pay for content just makes things more expensive for everyone.

A: Wrong. Facebook and Google pay billions for content that draws people to their platforms, just not for news they’re accustomed to getting for almost nothing. Last year, Google created a $100 million fund to compensate people posting short videos (and started paying for news in Australia) and still grew net income 89% year over year, to $76 billion. Mark Zuckerberg announced that his company will spend more than $1 billion “to reward creators for great content they create on Facebook and Instagram through 2022.” But not factual news.

Q: This will break the internet as we know it.

A: That was a bogus threat made by platforms and their allies in Australia. It proved false, as platforms are now paying for news there, and miraculously the internet still works. Variations of this propaganda continue, by mischaracterizing JCPA as seeking to implement a regime of charging for links. The goal is ensuring fair payment for content, similar to what’s been done with recorded music.

Q: This authorizes cartels, which do bad things.

A: That’s deeply misleading and insinuates that news outlets and their trade groups are akin to drug lords. A better comparison is to agricultural cooperatives that emerged in the early 1900s to help farmers survive amid monopolies and broken marketplaces. Congress in 1922 approved an antitrust exemption allowing farmers to market their products cooperatively. The JCPA is a much narrower exemption and temporary, but it would similarly allow publishers to collectively secure a fair price for their goods.

Q: Newspapers are dying, why bother?

A: There’s bipartisan support for JCPA because saving local news and reining problematic monopolies will benefit the public. Abundant research shows that democracy depends on coverage provided by local papers, and it suffers when they fade away. It’s also too soon to write off newspapers. Some are finding success with new business models emphasizing digital subscriptions and advertising. But progress is hamstrung by a distorted market, in which a few platforms dominate the marketplace and don’t fairly compensate publishers for news content they profit from.


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