Congress faces news showdown with Facebook, Google

Facebook and Google are heading into a showdown with Congress over a law that would allow news organizations to bargain with tech platforms over the distribution of their content. 

A bill that gained bipartisan support last Congress is expected to be reintroduced soon, and the tech platforms have already previewed their line of attack amid an ongoing battle over an Australian proposal that would force the Silicon Valley giants to pay publishers. 

The Journalism Competition and Preservation Act would not go that far, but it would provide a four-year safe harbor from antitrust laws for print or digital news companies to allow them to collectively negotiate with digital content distributors, such as Google and Facebook, regarding the terms on how the content is distributed. 

But some media advocates say it doesn’t adequately curb concerns raised by the market power of companies such as Facebook and Google — two companies already the target of federal antitrust investigations. 

“Google paying outlets a little bit for content is basically just spitting on the fire. [It’s] not going to do anything, especially to help some of the smaller newspapers and outlets,” said Laura Bassett, co-founder of the Save Journalism Project.

The House bill will be reintroduced by top lawmakers on the antitrust subcommittee, Rep. David Cicilline (D-R.I.) and Rep. Ken Buck (R-Colo.), spokespeople confirmed. 

A companion bill introduced in the Senate last session by Sens. Amy Klobuchar (D-Minn.) and John Kennedy (R-La.) gained top Senate Republican Mitch McConnell (Ky.) as one of its three Republican co-sponsors, underscoring growing political support for the measure. That bill is reportedly also expected to be reintroduced.

The Australian proposal would allow media companies to request payment from the tech giants for news articles on their platform. It subjects Google and Facebook to mandatory price arbitration if a deal cannot be reached. 

Google and Facebook have fiercely pushed back on it, arguing they do not hurt publishers because they direct readers to news websites.

At the end of January, Google threatened to cut its services from Australia over the proposal. As the Australian regulation looms, Google started announcing agreements with some larger news publishers, including Australian-based Seven West Media and News Corp, a New York-based company owned by Australian-born media mogul Rupert Murdoch.

Facebook on Wednesday said it will restrict Australian publishers from sharing or posting content and restrict Australian users from viewing or sharing international publishers’ links and posts. 

“The proposed law … left us facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter,” Facebook’s managing director of Australia and New Zealand William Easton wrote.

It’s unclear whether Facebook would take the same action if the U.S. were to adopt a similar policy, but the platform has not shied away from pushing back on federal allegations over the platform’s antitrust behavior before. 

Spokespeople for Google and Facebook did not respond for comment. 

News Media Alliance President David Chavern predicted the “homegrown” Silicon Valley giants will likely have an even greater influence over any proposal from Congress, pointing to their lobbying efforts.

But he also said there may be increasing support for adding elements of the Australian proposal. 

“We’ve received calls from some members of Congress inquiring whether we can incorporate some elements of the Australia approach into the bill and we’re looking at that right now,” Chavern said.

Chavern said the News Media Alliance is supportive of expanding the safe harbor bill, and in particular is looking at the Australian proposal’s language around resolving disputes over value. 

Not all advocates agree with embracing the Journalism Competition and Preservation Act or an expanded version that would draw from Australia.

Free Press Action argues the proposal does not adequately offer solutions to smaller, local and independent outlets that have faced the brunt of the challenges posed by tech giants.

“We don’t think that lifting antitrust collusion restrictions to allow large media conglomerates to jointly negotiate is the right answer,” said Timothy Karr, senior director of Free Press Action. “If passed, the Act would favor those large conglomerates with the means to collude over the smaller, more independent news outlets.”

Karr raised similar concerns that the proposed Australian bargaining code may benefit established outlets, such as those under News Corp, rather than independent papers. 

Free Press has instead offered a different solution — a proposal to tax targeted online ad revenue in the U.S. The money from the ads would fund a trust for civic media that would be distributed through grants to a range of news and information projects. 

“We believe an ad-tax solution would go much further than Australia’s bargaining code to address news media longevity and mitigate some of the anti-democratic impacts of the digital ecosystem,” Karr said. “Bottom line is that any government effort to rebalance the extreme wealth of Big Tech should be sure to subsidize news production at smaller news outlets and bolster non-commercial approaches.”

Bassett, the Save Journalism Project co-founder, pushed for broader action to break up and further regulate tech companies. She also said the Department of Justice (DOJ) should expand its antitrust action against Google. 

“Nothing short of that is really going to make a big dent in the problem at this point,” Bassett said. 

The DOJ sued Google in October over antitrust allegations, and the Federal Trade Commission and nearly every state filed an antitrust suit against Facebook in December. Both companies were also targeted in the House Judiciary panel on antitrust’s report on digital marketplace competitions released in the fall. 

Google and Facebook have denied allegations of anticompetitive behavior.

It remains unclear how the Biden administration will approach the antitrust issues. 

The Trump administration had pushed back on the Australian proposal, with trade officials asking the Australian government to “suspend” the plans in January. 

Microsoft, which has embraced the proposal while boosting its search engine Bing as an alternative to Google, recently urged President Biden to adopt a policy similar to Australia’s. 

A spokesperson for the White House did not respond for comment. 

Chavern said the News Media Alliance has reached out to the Biden administration.

“We’re certainly hopeful that they’ll bring a broader understanding of the moment we’re in, and the fact that if we want to have news going forward we need a system to pay for it,” he said.