Sanjukta Paul
A free and robust press is a central ingredient of a flourishing and democratic society — and given the existential crises we now face, also critical to its survival. But newsroom jobs have declined while local news deserts continue to grow and spread.
A major cause is the rise of powerful internet platforms such as Google and Facebook, which control the bulk of digital advertising. A huge number of search results on Google link to news stories, reproducing enough content for users to consume.
But 65% of these users do not click through to the news publishers’ websites. This means that even when their work has delivered value to the public, the businesses actually investing in and doing the work of journalism can’t earn sufficient advertising revenue to cover their costs. This is not economically sustainable.
It’s important to recognize what is driving the problem here: It isn’t the “free market” or even technological changes per se, but the specific market design, which current law helps to shape.
These dominant internet platforms have effectively collected market power within their own corporate boundaries, ultimately allowing them to dictate terms to other businesses whose content they use. Yet the law prevents journalistic enterprises from coordinating among themselves to bargain with these giant platforms for the value of their product.
A straightforward solution to the problem is to allow news outlets to band together for the purpose of negotiating with the internet platforms for payment for the content they create.
That is what the bipartisan Journalism Competition and Preservation Act, now in Congress, would do. It would authorize news outlets to create “joint negotiating entities” to bargain for compensation from internet platforms for the news stories they use. It would also require binding arbitration if no agreement is reached. The largest national newspapers and television networks would be excluded, and the legislation would sunset after eight years.
The bill also creates an exemption from federal antitrust law, the statutory framework that regulates economic competition and coordination. This legal framework — which most people think of as simply promoting competition — today already allocates economic coordination rights to large, powerful corporations such as Google and Facebook, to the detriment of smaller players.
Some critics oppose the JCPA because they say it would create a “news media cartel.” But this criticism misunderstands both antitrust law and how economies actually work. Despite its current tendency to delegate market management to powerful firms such as the dominant internet platforms, antitrust law has also long authorized many forms of coordination between otherwise independent enterprises in circumstances similar to the one proposed for news media companies.
The antitrust exemption for labor negotiations as well as long-standing exemptions for agricultural businesses and fisheries are all examples of authorized economic coordination in which smaller, less powerful players are allowed to band together to bargain with a more powerful and dominant actor -- in this case, an internet platform.
Not only are such exemptions from antitrust’s regulation of coordination already well-established in the legal architecture of our economy, it is hard to imagine the economy functioning well without them.
Productive economic activity and the systems of distribution and commerce built on top of it require competition and coordination, and our law and institutions, including antitrust law, recognize this while channeling and shaping both.
Indeed, the powerful platforms with whom news publishers now deal, and with whom they would collectively negotiate, are vast sprawling empires containing distinct but interconnected operations and investments. The bargaining power they have amassed is vast. It’s reasonable to balance their substantial coordination abilities with the relatively modest coordination rights granted to journalistic enterprises under the proposed bill.
Australia used a competition law to impose a similar rule last year, which has effectively required Facebook and Google to pay for the news content they distribute. That new system has already resulted in more investment being channeled back into the work of journalism.
The JCPA falls squarely within the American antitrust tradition. It is good policy that effectively responds to an urgent need.
