Should Facebook, Google Pay for News Content?

For years, a debate has been raging regarding the role Big Tech companies like Facebook and Google play in the newspaper industry’s decline and what responsibility these platforms have in ensuring journalism’s survival in the digital age.

The U.S. newspaper sector in 2021 is effectively on life support, with more than a decade of newsroom closures and layoffs as a result of disappearing advertising revenues now hastened by the economic effects of the COVID-19 pandemic. A January Challenger, Gray & Christmas study found that U.S. newsrooms shed a record 16,000 jobs in 2020, a gain of nearly 200 percent from the year prior. In the last year alone, more than 300 U.S. newspapers shuttered, according to a Hussman School of Journalism and Media at the University of North Carolina at Chapel Hill report. As a result, “news deserts” have spread across the U.S., leaving more than 1,800 communities around the country without access to local reporting.

Many blame the news industry’s endangered status on the practices and market dominance of tech behemoths Facebook and Google, platforms that thrive by sharing the content created by local news organizations while sharing none of the ad revenue resulting from the clicks that content generates. Now, in the wake of a recent legislative stare-down between Big Tech and Australian lawmakers, a debate has arisen regarding whether these companies should begin effectively subsidizing news coverage in the U.S.

In case you didn’t know: Australia’s Parliament in February passed a controversial media bargaining law that forces the dominant tech companies like Google and Facebook to negotiate with Australian news publishers and compensate them for the content shared by its users on their platforms.

Supporters say the move lends much-needed aid to Australia’s embattled news industry, where smaller, local media outlets have been unable to compete in a digital media ecosystem where Google, Facebook and other tech platforms have used their market dominance to essentially siphon news organizations’ web traffic and digital advertising revenues by linking to the content those third-party publishers create. Big Tech’s monopolistic power, they argue, has essentially rendered them information gatekeepers with the power to lock local newsrooms out of the advertising marketplace, crippling these outlets’ ability to deliver the trustworthy investigative journalism that’s critical to any democracy.

Critics say the law unfairly penalizes Google and Facebook, sites that constantly direct massive amounts of reader traffic to news outlets’ websites, which allows these publishers to widen their audiences, sell more subscriptions and boost ad revenues. The law also mandates tech platforms to independently bargain with publishers individually for licensing agreements, requiring binding arbitration in cases where an agreement isn’t met, a process they say unfairly favors publishers.

Facebook initially responded to the law’s passage by saying it would block Australian users from accessing Australian news items on its platform, but quickly reversed that decision. Google, meanwhile, acquiesced and unveiled a plan to begin arranging ad-sharing deals with publishers, including a multi-year partnership with Rupert Murdoch’s News Corp. But arguably, the most significant development has been the global repercussions this precedent sets, as other countries now consider following the Australian government’s lead and adopting similar legislation that could allow local publishers to collectively bargain with Big Tech over the news content that’s distributed across their platforms.

These efforts have been gaining strength in the United States, where lawmakers for several years have wrangled over whether Facebook and Google stifle competition in the digital economy. A forthcoming series of House Judiciary Committee hearings to begin in March will see lawmakers debate proposals to update U.S. antitrust laws in response to Big Tech’s immense market power.

Several U.S. lawmakers are also at work drafting legislation that emulates the Australian plan in many ways. Rep. David Cicilline (D-RI), chairman of the House Antitrust Subcommittee, is reintroducing a 2019 bipartisan bill, the Journalism Competition and Protection Act, which would give news publishers a safe harbor from antitrust laws and allow them to negotiate with Big Tech companies on payment for news content. Sen. Amy Klobuchar (D-MN) and Sen. John Kennedy (R-LA) are expected to introduce a similar bill in the Senate.

David Chavern, president and CEO of newspaper trade group the News Media Alliance, told O’Dwyer’s that his organization was “very supportive” of the Australian bargaining law’s passage, likening in to the creation of music licensing in the late nineteenth century, and considers media outlets’ newfound ability to collectively negotiate a “historic moment” and a “significant victory for news publishers everywhere.”

“There is now a lot of bipartisan support for that core idea in Congress and at a hearing in the House Antitrust Subcommittee next week we hope to outline ways to build upon that idea,” Chavern said. “Most particularly, we are going to talk about how we could create a formal system for negotiation and dispute resolution.”