Lawmakers Look to Even Playing Field Between News Media, Tech Titans
April 02 2019 - 5:29PM
Dow Jones News
By Keach Hagey
Legislation that would allow news publishers to team up on
negotiations with tech giants such as Alphabet Inc.'s Google and
Facebook Inc. didn't advance very far in the last Congress.
Now, its backers are hoping the latest version, which is
expected to be introduced Wednesday, will gain momentum in a
Democratic-controlled House and draw bipartisan support.
The Journalism Competition and Preservation Act is sponsored by
Rep. David Cicilline (D., R.I.), chairman of the House antitrust
subcommittee, and Rep. Doug Collins (R., Ga.).
News publishers have struggled to make money on digital ads,
partly because of the dominance of Facebook and Google. Antitrust
law bars the news companies from working together in negotiations
with the tech platforms.
The bill would give publishers a 48-month safe harbor from those
rules, during which they would be free to work together to push
their case on issues from revenue splits to data-sharing to
content-licensing.
Mr. Cicilline said the urgency for such a measure was
increasing.
"Local media and local publishers are really on life support,"
he said, pointing to news-industry data showing that publishers
have lost more than $30 billion in ad revenue since 2006 while
Facebook and Google made more than $60 billion in ad revenue just
last year alone.
"You can see that because of their dominance in the marketplace,
they are generating most of the revenue."
People familiar with Facebook's thinking say that an antitrust
exemption for publishers would likely harm consumers and fail to
help the solve the business model problems that it is intending to
help fix. A spokesman from Google declined to comment.
A spokeswoman for the Computer and Communications Industry
Association, a tech-industry advocacy group, said the association
was waiting until the bill is introduced to comment.
The legislation would have to clear many hurdles on Capitol Hill
before becoming law; there is now no companion bill in the Senate.
Mr. Cicilline said he and Mr. Collins intend to hold hearings about
the plight of news publishers.
Some Senate Republicans have indicated support for measures
pushing back on the tech giants. Last month, Texas Republican Sen.
Ted Cruz retweeted a complaint from Sen. Elizabeth Warren (D.,
Mass.) that Facebook had too much power over speech, saying, "She's
right."
In January, Missouri Republican Sen. Josh Hawley said he would
be open to working with Rep. Alexandria Ocasio-Cortez (D., N.Y.) to
investigate the power of big tech companies.
Mr. Collins, the ranking Republican on the House Judiciary
Committee, said rural communities had been particularly hard-hit by
challenges to news publishers' business model. He emphasized that
his goal wasn't "propping up a failed business model," but rather
providing "a level playing field so they can negotiate with these
much larger essentially new companies that are causing an
advertising drain."
David Chavern, the president of the News Media Alliance, the
publishers advocacy group, said the bill could hold bipartisan
appeal because it is "actually a fairly low-touch way" of striking
back at the tech companies, in contrast to proposals from figures
such as Ms. Warren, a Democratic presidential candidate, who
advocate breaking up the tech companies altogether.
Dow Jones, the publisher of The Wall Street Journal, is a member
of the NMA.
Mr. Collins said he didn't support breaking up the tech
companies, adding, "Simply being big is not bad."
Several publishers threw their support behind the bill. "I do
think that no single news company has the scale to negotiate with
most of the platforms," said Neil Patel, publisher of The Daily
Caller website, adding that the bill would "allow for business
model innovation between publishers and platforms, which is
something that's been missing."
Josh Tyrangiel, a Vice Media executive who has held senior posts
at Bloomberg and Time magazine, said he had watched the power in
the industry steadily drift toward the platforms. "If we don't
start being serious, there won't be small publishers left," he
said.
Grant Moise, the publisher of the Dallas Morning News, said
metro papers like his were among the hardest hit by the financial
challenges, in part because the platforms' control of user data has
made it harder for publishers to sell ads and sign up digital
subscribers.
"They have the data," he said. "When readers are coming to us
through the platforms, our inability to directly market to them
makes it extremely challenging to the business."
Write to Keach Hagey at keach.hagey@wsj.com
(END) Dow Jones Newswires
April 02, 2019 17:14 ET (21:14 GMT)
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