Future of Newspapers Part 2: Competition & Preservation Act

As online news rises and printed news declines, newspapers and local journalism in the United States continue to struggle. With the transition to online news, and the widespread ability to consume news for free, more search engines and social media companies are taking in the advertising revenue that once went to newspapers and local TV stations.

The Journalism Competition and Preservation Act of 2023 (S.1094), which proponents argue will help rectify these trends, passed through the Senate Judiciary Committee on June 15, sending the bill to the Senate floor for a full vote.

The Local News Initiative, a non-profit organization, has found that more than 2,500 newspapers have closed in the United States since 2005, more than one-quarter of printed publications. As of June 2022, 6,380 newspapers remain.

Proponents of the S.1094 bill argue that search engines and social media platforms connect consumers and local news outlets, allowing “Big Tech” companies, namely Facebook and Google, to profit off of the content that reporters produce. 

At the same time, businesses continue shifting their advertising dollars from local print and television to social media and search engines further hurting the industry. Those who support the Senate bill say that money will, in turn, go back to publishers instead of further padding the pocket of SEO (search engine optimization) companies and social media platforms.

“For most newspapers, unless they’re very, very large, the revenue that pays the reporters comes from the printed advertising,” said Tonda Rush, general counsel for the National Newspaper Association. “So if you don’t have advertising and you don’t have reporters and you can’t pay your printer, then everything begins to get scaled back.”

The JCPA is designed to allow local news organizations to negotiate with large technology companies such as Alphabet, which owns Google, and Meta, which owns Facebook, to put a revenue sharing plan in place.

S.1094 would allow any “eligible digital journalism provider” to join a “joint negotiation entity” to negotiate about pricing, terms and conditions with “covered platforms.” The bill defines eligible digital journalism providers as any “eligible publisher” or “eligible broadcaster” that discloses its ownership.

The bill describes an eligible publisher as those who publish a website, app or digital service with a United States audience, employs professionals to report and fact-check news, has an editorial process for error correction, generated at least $100,000 in annual revenue, has an International Standard Serial Number and employs fewer than 1,500 full-time employees. 

An eligible broadcaster is described as having a Federal Communications Commission license, updates content weekly, employs professionals to publish and fact-check news, has an editorial process for error correction and is not a television network.

The joint negotiation entity would be able to establish rules and regulations within itself, by a majority vote of all of its members. After the bill passes, a public notice will be created to start a 60-day window to join the joint negotiation entity.

A covered platform is a for-profit online outlet that, in the previous year, a) has at least 50 million US-based monthly subscribers/active users, and b) has either US-based sales exceeding $550 billion or more than one billion monthly active users worldwide. Google and Facebook are prominent platforms that meet this criteria.

Rush of the National Newspaper Association spoke favorably about the bill, noting that the organization endorsed the legislation. 

“We have expressed our support for [S.1094] and a number of publishers have made contact with their senators, pointing out that if we want to have local newspapers covering local city councils and local schools, we can’t be letting the social media platforms ride for free on the newsrooms’ budgets,” Rush said. “Facebook is not paying reporters, but the local publishers are, and it’s a situation that needs to be rectified.”

In the Senate Judiciary hearing to debate the legislation on June 15, most committee members voiced their support for the bill. Sen. Amy Klobuchar (D–Minn.), who introduced the bill, referenced similarities to the News Media Bargaining Code in Australia, which forces technology companies to pay news publishers for their content.

“Big Tech is using its dominance to distort the market and push the price paid to news publishers below competitive levels,” Klobuchar said during the hearing. “That’s what antitrust experts call monopsony power. The bill allows news publishers to counter that power, raising prices back towards competitive levels and expanding newspaper output… It’s allowing for negotiation and competition.

Sen. Mike Lee (R-Utah), who opposed the bill, argued the legislation would help technology companies more than local news publishers.

“It will end up aligning the media’s financial incentives with those of Big Tech in many, many instances,” Lee said in the hearing. “…This, in turn, will make the media paradoxically even more dependent on Big Tech and even less likely and less able to hold Big Tech accountable.”

Klobuchar introduced a similar version of the same bill in 2022. To respond, Meta threatened to remove news content from its United States platforms. The Senate Judiciary Committee did not vote on the 2022 version.