August 23, 2022

Legislation to bring the big tech platform companies to the table and negotiate compensation for news stories they use has been redrafted and will be considered by Congress over the next six weeks.

The latest version of the Journalism Competition and Preservation Act (JCPA) was released Monday evening. The 35-page bill is headed for committee markup revisions in early September and then likely will be voted on by both the House and Senate.

If successful, the legislation could infuse billions of dollars from Google and Facebook to pay journalists over its eight-year duration. A similar law in Australia – population 27 million – has so far brought news organizations there $140 million in new revenue. 

Here is a look at how the JCPA would work and its prospects. This information is drawn from a conversation with Danielle Coffey, executive vice president and general counsel for the News/Media Alliance, who has led the lobbying effort.

What is the basic idea?

The act would waive antitrust laws and let news outlets create one or several “joint negotiating entities.” Google and Facebook would be expected to settle on fair remuneration. If that hasn’t happened over a specified period of months, the matter goes to binding arbitration.

Who is included and who’s out among news publishers?

The largest national newspapers and broadcast networks are excluded.  But any local outlet that has reporters and produces news would be able to participate if its owners choose. Local outlets that are part of big companies like Gannett or Sinclair may join too. The option also would be open to smaller national outlets. Supporters include a group of conservative publishers.

Will Google, Facebook and their lobbyists try to defeat the bill?

Almost certainly yes. They have already registered objections in earlier hearings – on technical issues like how links and copyright are treated and alleging that publishers would be forming a cartel that would drive up prices. Should the bill pass, I would also anticipate lawsuits to invalidate or delay it.

So does the bill have enough support to pass?

To be determined. But the JCPA does have bipartisan sponsorship in both the Senate and House. Sen. Amy Klobuchar, D-Minn., is the main Senate sponsor joined by Sen. John Kennedy, R- La. In the House, Rep. David Cicilline, D-R.I., is the lead sponsor and his counterpart is Ken Buck, R- Colo. All four issued statements of support Monday evening. Klobuchar said, “To preserve strong, independent journalism, we have to make sure news organizations are able to negotiate on a level playing field with the online platforms that have come to dominate news distribution and digital advertising.”

Will eligible outlets negotiate as one big “entity” or split into smaller groups?

Their choice. In practice, Coffey said, broadcasters (who have their own trade association and digital revenue structure) likely will break off separately. Others will probably see the logic of grouping together in one jumbo negotiating bloc since the idea is to have the maximum bargaining leverage against the platform giants. 

How would participants divvy up the money they get from the platform companies?

An interesting provision. To help ensure the proceeds are plowed into journalism, 65% of the distribution would be based on the number of journalists (20 hours a week or more) an outlet employs. The other 35% would be based on impressions served on each platform.

Will the terms and dollar amounts be disclosed? 

To government regulators – probably the Federal Trade Commission and Department of Justice – yes, but to the public, no. Individual companies would be required to disclose how much they received and how they spent it.

What happens if negotiations drag on? Couldn’t the platform companies avoid payments indefinitely that way?

The authors have thought about that and written into the law a formula for “baseball style” arbitration. If no agreement is reached after proposals and counter proposals, the matter goes to binding government arbitration.  Each side would make a final offer, and the arbiter would pick one or the other. As in baseball contract disputes, the two sides thus have an incentive to push hard for their position but make a reasonable offer in the end.

Could the platform companies just drop news from their feeds?

Conceivably. They either have or have threatened to during  standoffs in other countries like Spain. In that case, we would see who is calling whose bluff. The publishers need the huge volume of traffic that flows from links in Google and Facebook stories and summaries. They, in turn, think that news is an important driver of engagement for the platform companies, even though Facebook has said this year that it is cutting back on emphasizing that content. Language in the bill forbids the platform companies from “retaliating” against any specific company, so a decision to drop would need to be complete.

How much money will be generated if the Act passes as planned?

That’s impossible to say, Coffey told me. In Australia, with one-twelfth the population of the U.S., outlets have realized $170 million. Some national/local chains like Rupert Murdoch’s were included there, so don’t expect 12 times as much. But Coffey said that she would expect an agreement to generate billions of dollars, especially if it runs over eight years before sunsetting, as is envisioned.

What is the path forward from here?

The act heads to “markup” in early September. If you’ve forgotten your high school civics, markup is a committee procedure, analogous to an amendment process, where members suggest modifications. Once that phase is complete, the act would be reported out and head to the floor.  Delays are always possible. It has taken years to get to this point.

Along with the new draft, the News/Media Alliance unveiled several fresh advocacy pieces Monday.

One was a list of more than 200 supporters – individual outlets, state press associations and other interest groups. Those included newly released letters to legislators like this one from Mike Klingensmith, publisher and CEO of the Minneapolis Star Tribune, or this from Paul Tash, chairman and CEO (since retired) of the Tampa Bay Times, which is owned by Poynter. 

They speak of life-threatening “peril” and “crisis” for local journalism, whose ad revenues have been decimated as that business slides to the platforms.

Others in the industry like Gannett did not publish letters of support. But Gannett’s USA Today Network has run both ads and an editorial in support of the JCPA, communications director Lark-Marie Anton emailed me and said that the network would participate in any industry negotiations.

For this piece, I did not seek comment from the sponsoring legislators and their staff or from early opponents in Congress like Sen. Mike Lee, R-Utah, or from the platform companies and their supporters. It appears that the window for back-and-forth will remain open in days and weeks to come – but with the stakes suddenly a lot more concrete.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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