Today, nearly half of the counties in the United States have only one newspaper, while almost 200 counties have no local newspaper at all. In the last two years, 300 publications have closed, with more than 6,000 journalists axed.
Google and Facebook attract 80 percent of digital-ad spending and 45 percent of all ad spending in the U.S. With one hand, the Big Tech giants help news providers by distributing their news. But with the other they siphon so much of their ad revenue (two-thirds of all Google searches now don’t even result in a click outside Google) that they can barely survive. And many have not.
To protect all publishers, but especially small ones, the United States should follow Australia, which this year began using antitrust-competition laws to unlock payments big enough to help journalism survive.
The News Media Bargaining Code, passed in February of this year, requires the dominant tech platforms to negotiate with and compensate news publishers in Australia for use of their content online. Instead of pushing the digital platforms to pay more to the media by beefing up copyright laws, as Europe has been doing, Australia devised an antitrust law that improves media companies’ bargaining power and treats each negotiation as if it were a financial settlement in an antitrust lawsuit. The code forces tech companies into mandatory arbitration with news outlets for payment for the value they obtain from having their news content in newsfeeds and search results.
Australia’s solution is elegant and effective. The law deploys a final-offer arbitration method if the parties can’t come to an agreement on compensation — which compels both sides to submit a final offer to an arbitrator and empowers the arbitrator to pick one. This measure incentivizes both sides to make a legitimate offer. Secondly, it also contains a protection that helps ensure that a deal is made: If a negotiation fails, the tech company cannot boycott that publisher’s content. It must host all Australian journalism on its network or carry none at all.
Initially, both Google and Facebook opposed the law and threatened to pull out of Australia. However, Australia made its resolve clear to pass the law, and so Google backtracked on its threat and signed deals to pay Australian media companies. In one of the first deals it made, Google agreed to pay Nine Entertainment Co., which owns the Sydney Morning Herald and The Age, more than $30 million in cash annually for the use of its news content for five years. And shortly thereafter, Google struck a global three-year deal with the Murdoch family–owned media conglomerate News Corp. for its brands in the U.S., U.K., and Australia such as the Wall Street Journal and New York Post to be featured in the Google News Showcase.
Facebook has been slower to come around. At first the platform retaliated by blocking Australian users from sharing or viewing news content on its platform. After five days, it agreed to drop the ban because some last-minute amendments to the code were made. Since the law was enacted, Facebook now, like Google, has made its own deals with news providers, including News Corp. and others.
Small papers have benefited enormously. The Australian news organization Country Press Australia (CPA), which includes over 180 regional and local publications, struck a deal with Google. According to Mumbrella, 70 of CPA’s publications will appear in the Google News Showcase, and Google will pay CPA to curate content for the program. Those small publishers would have had no ability otherwise to get compensation, according to David Chavern, the president of the U.S.-based News Media Alliance.
A similar approach to Australia’s has been introduced in Congress in the form of the bipartisan Journalism Competition and Preservation Act (JCPA). Also known as the “Safe Harbor Bill,” it would pause antitrust restrictions for four years to let publishers unite to negotiate with Facebook and Google for fair compensation for news content. Currently, no news company is in a position to negotiate by itself with Google.
Representative David Cicilline (D., R.I.) has also suggested that he is trying to add a provision to the bill for the federal government to serve as the final arbitrator if a deal can’t be struck, like the mandatory-arbitration provision of Australia’s code. Supporters are hoping for further movement on the bill this fall.
And time is of the essence. Google is already working hard to pitch individual news outlets on Google News Showcase for comparatively very low dollar amounts. It is trying to cut these separate deals to pick off the big guys, which would then leave all the local papers helpless to fend for themselves. But if Congress passes the legislation soon, allowing news companies to band together, all papers could receive fair compensation deals with Big Tech.
Something to Consider
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