October 31, 2022

This article was originally published on Northwestern University’s Medill Local News Initiative website and is republished here with permission.

The clock is ticking on the Journalism Competition and Preservation Act.

With the midterm elections coming up on Nov. 8, the lame-duck session could be the last realistic chance for Congress to pass this bipartisan effort to make Google and Facebook pay for local news content on their platforms.

U.S. Rep. David Cicilline, D-R.I., a lead sponsor of the measure, believes the legislation is likely to win approval in a matter of weeks, he said in an interview. “The lame-duck session is the perfect time to pass this bill,” he said. “I suspect we will do a Judiciary Committee markup soon and I think there is strong bipartisan support. There is no reason we can’t pass it in this session.”

Read Greg Burns’ Q&A with Rep. David Cicilline

His optimism comes at a challenging time for government efforts to support local news. The JCPA, as it’s known, would create an antitrust exemption enabling news organizations to bargain collectively for payment from companies distributing their content online.

The measure has attracted predictable opposition from the powerful lobby representing Big Tech, as well as from some conservative Republicans hostile to the mainstream media. Some liberal legislators have expressed concerns about how the measure might be a giveaway to big news chains that have laid off journalists and reduced coverage while paying a fortune to executives and owners.

Advocates say the legislation is urgently needed to counter the market dominance of Google and Facebook. “Our industry is in peril,” said Danielle Coffey, executive vice president and general counsel for the News Media Alliance, a group representing news organizations. “We have these two monopolies who are drowning us because we cannot receive the revenue that would benefit consumers through a greater output of quality journalism. The legislation allows us to collectively come together.”

Coffey takes heart from the experience of Australia, where similar legislation approved in 2021 resulted in payments of more than $140 million from the online platforms to news companies big and small. The European Union, too, is advancing along similar lines. “News organizations are being paid, and the Internet didn’t break,” she said.

In addition to the U.S., other countries are considering the same idea. Still, the path forward becomes more difficult if the midterms change the political calculus. Should Republicans win control of Congress, the odds go down for the JCPA making the list of bills receiving urgent attention from Democrats, according to Coffey and other observers.

Journalism tax-credit bill sidelined

So far, government efforts to support local news are moving slowly, if at all.

A separate federal bill aiming to provide tax credits for those who subscribe to local news, advertise in the outlets and hire journalists for them has been sidelined. One component of the Local Journalism Sustainability Act – tax credits for hiring newsroom employees – became part of the Build Back Better spending measure, which failed. The journalism tax-credit plan ultimately got left out of a budget reconciliation measure that was passed.

Though some House Republicans favor it, the LJSA lacks bipartisan support in the Senate. “It’s a difficult road now,” said Dean Ridings, chief executive officer at America’s Newspapers, a trade group. A part of the measure providing tax credits to small businesses might be revived, he said. “That will be our strategy after the midterms, depending on what happens. The GOP would be more likely to support that.”

Meanwhile, state efforts now underway have the potential to help support local news, but so far, they have amounted to little compared to the scale of journalism’s decline, as outlined in the State of Local News 2022 report.

Legislation providing tax credits for advertising with and/or subscribing to local news organizations has been floated in several states, including a bill before the Wisconsin legislature. At the same time, some state governments are forming task forces charged with recommending policy changes to support local news. The Illinois Local Journalism Task Force, for instance, will study the state of local news and make policy recommendations to strengthen the industry in Illinois.

Created in 2018, the New Jersey Civic Information Consortium provides state funds for local news projects, governed by a 16-member board charged with improving the quantity and quality of local news in New Jersey. This year, the Consortium has announced grants to local news innovators three times, including $924,014 in late September.

Across the country, partisan divisions make it complicated to lobby statehouses on behalf of journalism, Ridings noted. “There’s not one recipe,” he said. “There are some basics we can apply. The partisan divide is so strong. If it’s a Republican-dominated legislature you’re going to have a very different approach. A more business-oriented approach would be a better strategy.”

‘Stop this thing’

While the JCPA has bipartisan support — including GOP lead sponsors — some Republicans remain strongly opposed. Sen. Mike Lee, R-Utah, recently told the right-wing Breitbart News Network, “We should be doing everything we can to stop this thing.”

The legislation could encourage back-room collusion between news organizations and Big Tech companies that results in censorship of conservative voices, Lee said.

“We’re authorizing here for two of the entities that are perhaps most hostile to conservatives; newspapers and Big Tech companies — we’re allowing them to form cartels in that industry. For newspapers to form cartels ostensibly for the purposes for negotiating the manner in which they’ll be compensated by Big Tech companies. It’s a dangerous game to start authorizing cartels for that.”

On the progressive side, the Free Press Action Fund sees the bill as a “bailout” for executives who have profited from layoffs and consolidation. “The top priority of the media giants that would most likely collude in these proposed negotiations is to maximize their profits, not serve the interests and needs of people,” a spokesman for the group said in a statement last month.

A spokesperson for Meta, parent of Facebook, said the JCPA misconstrues how its platform relates to the news. “Facebook does not proactively post news on our platform,” the spokesperson said in a statement. “Publishers and broadcasters are the ones who control whether and how their content appears on Facebook, and they can choose to use our free services as long as it provides value and makes business sense for them.” Alphabet, parent of Google, did not respond to requests for comment.

The U.S. battle comes after other nations have crossed swords with the Internet giants. Google fought back against European Union efforts to force it to pay for news content shown in search results, including by shutting down its Google News site in Spain. After the EU proceeded with new online copyright rules in 2019, France ordered Google to negotiate, and the company earlier this year agreed to pay EU publishers for content.

Blocking news content

Meta fought against similar legislation in Australia, at one point restricting the sharing of news on its platforms. The result was deemed a public-relations gaffe, however, as the company’s news blackout also blocked access to the pages of charities, health departments and even Facebook itself, inadvertently demonstrating the company’s power to control information.

In response to proposed legislation in Canada, Meta has similarly threatened to shut down news sharing on its Facebook and Instagram platforms, though presumably, it would take a more targeted approach than it did in Australia. The United Kingdom and India are among other countries seeking to pressure the Internet giants to pay publishers for news content.

Coffey says nothing short of legislation will get the platforms to pay. “In a functional marketplace, you would get paid compensation at fair market value,” she said. “We have a broken marketplace.”

Tim Franklin, senior associate dean and John M. Mutz Chair in Local News at the Medill School of Journalism, Media, Integrated Marketing Communications at Northwestern University, said local news in America faces a “critical” moment. “And the reality is that whatever Congress does – or doesn’t do – in the next three months could determine the trajectory of local news for many years to come,” he said. “We’re now losing an average of two local news outlets every week, and that pace will certainly accelerate if we see the recession that many economists predict.

“Reasonable people can debate the virtues of various policies,” Franklin said. “But the reality is that doing nothing in the short term means more news deserts and even more misinformation and disinformation that will damage our communities and our democracy.

“There’s a lot of ground-up innovation happening in local news these days,” he said. “It’s exciting to see new models and new news outlets emerging. At the moment, however, the pace of that growth isn’t nearly fast enough to offset what’s being lost. And without some type of policy intervention, that trend isn’t going to change anytime soon.”

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Burns served as Editorial Board member, columnist and business editor at the Chicago Tribune and as a reporter for BusinessWeek magazine and the Chicago Sun-Times.…
Greg Burns

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