The Journalism Competition and Preservation Act (JCPA) introduced by Senator John Kennedy (R-LA) and Senator Amy Klobuchar (D-MN) would allow small news organizations to enter joint negotiations with large tech companies. In practice, this would create a carveout for illegal collusion in an attempt to prolong an outdated business model.
The JCPA grants small news organizations immunity from relevant antitrust laws such as the Sherman Act when they are negotiating with a big tech company regarding payment for displaying news content. In the context of antitrust law, collusion is an agreement to fix prices across an industry. The goal of banning collusion is to avoid distorting the market at the expense of consumers. Essentially, JCPA would tip the scales in favor of small news organizations by allowing state-sanctioned collusion.
The bill’s authors justify legislative action through the belief that the decline in local journalism can partly be attributed to unfair compensation by platforms. Arguing for the bill, Klobuchar said, “To preserve strong, independent journalism, news organizations must be able to negotiate on a level playing field with the online platforms that dominate news distribution and digital advertising.”
The JCPA misdiagnoses the fundamental problem facing local news organizations today, which is that the market has changed in ways that make the newspaper model of the past unsustainable.
Traditional newspapers are largely funded by selling advertising space, which has become less valuable for advertisers compared to internet advertisements. Advertising online makes it cheaper and faster to get advertisements to their target audience compared to physical newspapers. With online advertising, businesses can track in real time their return on investment. Digital advertising has proven popular as over half of global advertising spending is now in the digital space. Local news websites also do this but lack the same reach as other platforms, making them less viable for advertisers.
Following attempts to pass the previous introduction of JCPA in 2022, Meta issued a statement saying that it would consider banning news from its platforms if the bill were to be passed. This is not the first time Meta has stated this, and the company did ban news for about a week in Australia before backing down following the enactment of a similar piece of legislation. Reaching online readers is increasingly important, putting that access in jeopardy could hurt the local newspapers the bill is aiming to help.
Acknowledging market realities does not mean local news has to vanish completely. Local news has become a more niche product compared to what it was before the internet, and it needs to find a sustainable model suited to today’s market. Luckily there are alternatives.
Arnold Ventures is a nonprofit organization that supports state-based news in North Carolina. The nonprofit news organization in question, the Carolina Public Press, exposed a shortage of nurses trained to help sexual assault victims in rural NC hospitals. Local reporting brought the issue to the attention of legislatures and helped secure funding to address the problem in the Violence Against Women Act. A non-profit model for local news funded by donations rather than advertising is one alternative more suited to today’s market.
The JCPA was crafted with good intentions but ignores market realities. Local news is an invaluable source of information for issues that national news may not catch or be of interest to a national readership. However, a decline in local news does not justify allowing a class of business to use tactics that would be considered illegal in any other context, especially when alternatives exist.