The Journalism Competition Act and the media industry

Note: This was originally published as the daily newsletter for the Columbia Journalism Review, where I am the chief digital writer

Last week, members of both houses of Congress—including Amy Klobuchar, the Democratic senator from Minnesota; John Kennedy, the Republican senator from Louisiana, and David Cicilline, the Democratic member of the House of Representatives for Rhode Island—introduced a revised version of a bill they say will allow news outlets to bargain for “fair terms from gatekeeper platforms that regularly access news content without paying for its value.” The bill, called the Journalism Competition and Preservation Act, was originally introduced by Klobuchar last year; that in turn was based on a similar bill with an identical name, which Cicilline introduced in the House in 2018. The law would allow media outlets to negotiate as a group with platforms such as Google and Facebook for compensation, in return for allowing the platforms to aggregate and/or distribute their articles. Competitors coordinating their behavior would normally be collusion, but the JCPA gives media companies “safe harbor” from antitrust laws.

The act is similar to an Australian law known as the News Media and Digital Platforms Mandatory Bargaining Code, which that country passed last year amid a storm of controversy. Before the code became law, Facebook tried to dissuade Australia’s parliament from passing it by blocking the country’s news publishers from posting their content, and even blocked Facebook users in Australia from posting news provided by non-Australian outlets (Google showed users a warning popup saying their internet experience would be degraded by the law). Like the Australian law, the bill proposed by Klobuchar and Cicilline requires Google and Facebook to enter into negotiations—either with individual media outlets or with groups of outlets—over payment for their news content. If the two sides are unable to reach an agreement, both the Australian law and the US version require the digital platforms to submit to binding arbitration (there have been no cases of arbitration since the Australian law was passed in March of 2021).

Google and Facebook quickly signed deals with news publishers and broadcasters after the code became law, including one where Google pays Nine Entertainment—which owns a TV channel, radio stations, the Sydney Morning Herald, and The Age in Melbourne—$22 million a year for five years (Facebook agreed to pay the same company about $15 million). Critics argued the law would benefit only large entities such as those owned by News Corp. (which got an estimated $50 million), but supporters say that hasn’t been the case. Bill Grueskin, a professor in Columbia University’s School of Journalism, wrote in a recent report on Australia’s media industry that some local journalists believe the law has revived the news business. Monica Attard, a journalism professor, “says she can’t persuade many students to take internships these days because it’s so easy for them to land full-time job—and that change coincides with the gusher of code money,” Grueskin wrote. Attard added: “I swear to God, I have not seen it like this in twenty years.”

The US isn’t the only country that has been inspired by Australia’s law, as Grueskin notes in his report. “Canada and the United Kingdom are moving to enact similar codes” for their own media industries, he writes, “while officials in Indonesia and South Africa have voiced plans to do the same.” Despite the money that has flowed into the Australian media business, Grueskin says one of the downsides to that country’s approach is that there is virtually no transparency to the deals. “Australia looks like a success story to those who’ve long yearned to force Big Tech to prop up suffering newsrooms. But it’s a murky deal, with critical details guarded like they’re nuclear launch codes,” Grueskin writes. “If you want to know how much money the platforms have paid to news organizations, you’re out of luck (the US version of the law would require outlets to disclose once a year how much they received in payments from the platforms).

The revised version of Klobuchar’s bill includes a requirement that platforms negotiate with media groups “in good faith,” and restricts the process to outlets that have fewer than 1,500 employees, which excludes most large publishers. It also restricts the law’s support to outlets that have “a dedicated professional editorial staff that creates and distribute original news and related content concerning local, national, or international matters of public interest.” The News Media Alliance (formerly known as the Newspaper Association of America), which supports the bill, notes in a Q&A about the proposed law that “it is inclusive of conservative publications, such as Breitbart, The Daily Caller, Newsmax, and The Washington Times” (in a list of articles that have been published about the bill, supportive pieces in The Daily Caller and Newsmax are near the top).

Despite the apparent success of Australia’s law, critics of the idea remain. Jack Shafer, writing in Politico, writes that “taxing tech companies for the failure of the news industry is just unfair,” because Google and Facebook didn’t kill newspapers, “it was self-inflicted.” The per capita decline in newspaper circulation started in the post-WWII era, he notes, “and advertising revenue peaked in 2005.” For its part, the News Guild says the bill “still lacks sufficient guardrails to make sure the added revenue is dedicated to employing journalists and to better serve readers.” Mike Masnick, writing at Techdirt, says the requirement that news outlets have no more than 1,500 employees could backfire: “this bill basically says ‘buy up large newspapers and cut them to under 1,500 employees,'” he writes.

Masnick also questions the rationale behind the bill. “News orgs beg these sites for traffic. They hire SEO people to try to get more,” he argues. “Now they’re also getting to FORCE the internet companies to PAY them for that traffic?” The platforms would also be forbidden to remove links or content as a way of getting out of payment negotiations. Others warn that even if these kinds of laws mean that money flows from the tech platforms into the news industry, that could cause some smaller outlets to become dependent on that lifeline, to their detriment. “What if Google decides it’s a bad deal for them?” Matt Nicholls, who edits—and writes most of the stories for—the Cape York Weekly in Queensland, asked Grueskin. “If you need Google funding to prop up your journalism, to keep your journalists employed, that’s not sustainable.”

Here’s more on the media industry and funding:

No more whims: Regina Brown Wilson, executive director of California Black Media, wrote in a May op-ed for the Mercury News that the JCPA is necessary to level the playing field in media, especially for publications run by people of color. “While Big Tech occasionally distributes grants to minority owned press outlets, these outlets ought to be compensated consistently for the value they provide the platforms—not just at the whims of Big Tech’s generosity,” she writes. “The JCPA is promising because it is designed to benefit small and medium-sized publications such as minority news outlets that have never enjoyed a proportional share of advertising revenue relative to their readership numbers.”

Power asymmetry: Brier Dudley, writing in the Seattle Times earlier this year, asked and answered some common questions about the JCPA, including why news outlets should be paid for their content when they willingly put it on Facebook and allow Google to index it (Google points out that sites can prevent their content from being indexed with a simple text file). Media companies “have to be on the platforms as they become more dependent on digital revenue,” Dudley argues. “But they can’t get fair treatment if platforms abuse their monopolies, as federal investigations determined.” A House antitrust report on the industry in 2020 found that there’s “significant and growing asymmetry of power” between platforms and news organizations, Dudley notes.

It will rot away: The JCPA “will produce neither competition nor preservation,”  Katharine Trendacosta and Mitch Stoltz write for the Electronic Frontier Foundation. “For one thing, creating a new cartel to deal with existing monopolists is not competition, it’s the opposite. For another, creating an implicit right to control linking in any context won’t preserve journalism, it will let it rot away.” The EFF staffers say the focus on getting paid for content and links “makes even less sense when the problem, historically, has been the domination of the digital ad market by a few huge players.” They argue that the Competition and Transparency in Digital Advertising Act targets that problem much more effectively.

Some news from the home front: On Tuesday September 13, at 4pm Eastern, CJR and Columbia’s Lipman Center for Journalism and Civil and Human Rights will host an event focused on objectivity and the future of journalism. The participants will include The New Yorker’s Masha Gessen, the historian David Greenberg, the Pulitzer Prize winning journalist Wesley Lowery, Columbia Journalism School’s Andie Tucher, and Lewis Raven Wallace, author of The View from Somewhere: Undoing the Myth of Journalistic Objectivity. The event will be live-streamed, or you can register to attend in person in New York. More details here.

Other notable stories:

The US National Security Agency tried to persuade its British counterpart to stop the Guardian from publishing revelations about the agency’s secret data collection—revelations that came from Edward Snowden—according to a new book written by Sir Iain Lobban, the head of Government Communications Headquarters (GCHQ), the British intelligence agency. Lobban “was reportedly called with the request in the early hours of 6 June 2013 but rebuffed the suggestion that his agency should act as a censor on behalf of its US partner in electronic spying,” the Guardian writes.

Mark Bergen writes for Bloomberg that YouTube successfully managed to remove violent content related to Islamic terrorism from its platform, but still remained “blind to other forms of political extremism,” such as that posted by white supremacists and other domestic sources. In 2020, staffers put together a presentation “showing the prevalence on YouTube of White supremacists, listing recent deadly attacks in New Zealand, Wisconsin, South Carolina, and Texas,” Bergen writes in an excerpt from his book, Like, Comment, Subscribe: Inside YouTube’s Chaotic Rise to World Domination. “YouTube had spent years developing a formula for dealing with violent extremist content. It had worked. So why was it so reluctant to use it on this threat, too?”

Mike Reed, the CEO of the Gannett newspaper chain, told staff in a Q&A session on Wednesday that the company laid off 3 percent of its U.S. workforce in August, or roughly 400 employees, according to a report from Poynter. “The announcement comes more than two weeks after Gannett, the nation’s largest newspaper chain with more than 200 papers, executed a round of layoffs,” Poynter wrote. “Though employees and reporters had repeatedly asked Gannett for information about the scope of the layoffs, the company declined to provide that information until now.” The company’s CFO also told staff that Gannett won’t be filling 400 other open positions.

Steven Monacelli, an investigative journalist who has written for Rolling Stone and the Texas Observer, said that the Texas Court of Appeals “dismissed all of the claims that Monty Bennett and The Dallas Express brought against The Dallas Weekly and me.” The court held that statements challenged by the plaintiffs “were either protected statements of opinion or true,” Monacelli said. Bennett, a local hotel owner and conservative donor, sued Monacelli and The Dallas Weekly for libel after an article said his purchase of the Dallas Express would turn it into a “right wing propaganda site.”

Casey Newton, who writes a technology-focused newsletter called Platformer, interviewed Tony Stubblebine, the new CEO of Medium, the content platform formerly run by Evan Williams, a co-founder and former CEO of Twitter. “The fate of a blogging platform may have somewhat lower stakes than some of the subjects we usually discuss around here,” Newton writes. “But a key question at the intersection of tech and democracy is what sort of publishing models the internet will support.” In the interview, Stubblebine says that Medium is considering changing its compensation scheme for writers, and admits that focusing the platform on journalism was a mistake.

Matthew Prince, the CEO of Cloudflare—which provides hosting and cybersecurity services to websites—published a blog post in which he said the service would continue to provide security services to sites with objectionable content. “Just as the telephone company doesn’t terminate your line if you say awful, racist, bigoted things, we have concluded in consultation with politicians, policy makers, and experts that turning off security services because we think what you publish is despicable is the wrong policy,” Prince wrote. Vice noted that the blog post “comes after mounting calls for Cloudflare to stop providing its security products to Kiwi Farms, a notoriously transphobic forum with users that have stalked, harassed and doxed vulnerable people.”

A study released by the Media Insight Project on Wednesday found that “young people are following the news but aren’t too happy with what they’re seeing,” the Associated Press reported (the project is a collaboration between The Associated Press-NORC Center for Public Affairs Research and the American Press Institute). The study showed 79 percent of young Americans say they get news daily. “The report pokes holes in the idea that young people aren’t interested in news, a perception largely driven by statistics showing older audiences for television news and newspapers,” the AP writes. Michael Bolden, CEO and executive director of the American Press Institute, tells the wire service that “they are more engaged in more ways than people give them credit for.”

Leave a Reply

%d bloggers like this: