Commentary

Proposed Law To Help Publishers Is Workable, Despite Flaws

A proposed law to give news publishers more bargaining power with digital ad giants like Google and Facebook has stirred more debate about its viability.

After reading through the testimony about the Journalism Competition and Preservation Act(JCPA), I still think it presents one of the few workable solutions if antitrust measures fail to curtail the growing power of technology companies to demonetize publishers.

The JCPA would exempt news publishers from antitrust laws for a few years, letting them collectively negotiate payments from Facebook and Google for content. A bipartisan group of lawmakers last week reintroduced the bill to the House and Senate — and the House Judiciary subcommittee on antitrust, commercial and administrative Law held a hearing to discuss it.
The hearing became another occasion for Google to trade barbs with longtime rival Microsoft, which still dominates the market for desktop operating software decades after a court determined the company was a monopolist. Microsoft again presented itself as a friend to publishers, compared with internet search monopolist Google, whose surging revenue has coincided with steep losses for publishers.
In written testimony, Microsoft President Brad Smith cited data showing how U.S. newspaper ad revenue had plunged from $49.4 billion in 2005 to $14.3 billion in 2018, while Google's rose from $6.1 billion to $116 billion during the same period.
“Even though news helps fuel search engines, news organizations frequently are uncompensated or, at best, under-compensated for its use," Smith asserted. "Google and others are quick to point out that news organizations get referral traffic from their properties, seeming to suggest that on the vast internet, news organizations should be grateful simply to be found.”
In addressing the value that Google provides to publishers with referral traffic, Smith added: "Monetizing that traffic has become increasingly difficult for news organizations because most of the profit has been squeezed out by Google. Google has effectively transformed itself into the 'front page' for news, owning the reader relationship and relegating news content on their properties to a commodity input."
In response, Kent Walker, senior vice president of global affairs at Google, attacked Smith's testimony as “naked corporate opportunism” and an attempt to "break the way the open web works in an effort to undercut a rival." He also pointed out the many ways Microsoft has harmed journalism by replacing editorial staff with artificial intelligence.
That may be so, but Microsoft so far has been on the winning side of regulations that force technology companies to pay publishers for their journalism. Microsoft last month supported Australia's effort to enact its new media code, which forces tech platforms to share revenue with publishers or resolve their disputes in an arbitration system.

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Google had said it would stop providing internet search in Australia, but backed down as it reached agreements to pay several publishers to provide articles for a News Showcase service. Facebook temporarily prevented Australians and publishers in the country from posting links to articles, but restored the service after lawmakers made small revisions to the country's media code.

Google and Facebook's actions in Australia have informed the discussions about the JCPA, and the perils of allowing big technology companies to have too much control over what people see and hear online. Citing Google as an example of a company that held a country hostage, bill sponsor Sen. Amy Klobuchar (D-Minnesota) said, “That, my friends, is a sign of a monopoly.”
Among other witnesses who testified at the subcommittee hearing, journalist Glenn Greenwald argued the proposed JCPA won't help local news outlets because it empowers bigger media organizations to dominate revenue-sharing negotiations with tech companies. He also said media giants already have too much power to pressure Silicon Valley companies into censoring ideological adversaries.
“Virtually every concern that Americans across the political spectrum express about the dangers of Silicon Valley power emanates from the fact they have been permitted to flout antitrust laws and acquire monopoly power," he said. "None of those problems -- including their ability to police and control our political discourse and the flow of information -- can be addressed until that core problem is resolved.”
Grennwald later said in a blog post that the antitrust exemption should be limited to small news outlets to be more effective at helping them.
It's an interesting idea that deserves more discussion as the JCPA is considered within the broader context of applying antitrust law more forcefully against some companies while exempting others. That said, the JCPA provides a more flexible framework for negotiations among tech platforms and publishers, and it has a better chance of surviving legal challenges.
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