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Why a news media bargaining bill in US has riled Facebook and triggered a debate

The proposed new law seeks to give news organisations more power to negotiate fees for content shared by Internet companies. Australia and France already have such a law.

Facebook and Meta logos.Australia and France have enacted similar laws, following which companies like Meta and Google have agreed to pay publishers in those countries. (Photo via Reuters)
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A legislative push in the United States, aimed at giving news organisations greater power to negotiate fees for the content shared on social media sites like Facebook, has run into rough weather. The proposal has come under attack from Meta (formerly Facebook Inc.), which has threatened to remove all news content from its platform if the measure is passed, and other groups representing Internet giants like Amazon and Google.

Australia and France have enacted similar laws, following which companies like Meta and Google have agreed to pay publishers in those countries. Others like Canada and New Zealand are currently deliberating similar legislation.

“No company should be forced to pay for content users don’t want to see and that’s not a meaningful source of revenue. Put simply: the government creating a cartel-like entity which requires one private company to subsidise other private entities is a terrible precedent for all American businesses,” Andy Stone, policy communications director at Meta, posted on Twitter on December 6.

What is the proposed law?

The draft legislation, known as the Journalism Competition and Preservation Act (JCPA) of 2022, would allow publishers — who have long complained of dwindling revenues as social media platforms cornered a large chunk of online advertisements — greater powers to collectively bargain with companies like Facebook and Google for a larger share of ad revenue.

The bill was introduced in Congress by influential Democratic Senator Amy Klobuchar of Minnesota and is reported to have bipartisan support.

JCPA was initially included in the annual national defence spending bill of the US which will have to be passed by the end of this year. However, on Tuesday, Congress removed the JCPA from the defence bill, raising uncertainty over the future of the proposal.

How have stakeholders reacted to the proposal?

Meta has argued that contrary to publishers’ claims, platforms like Facebook actually help them with the distribution. This is the argument it made against the Australian law as well.

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Two industry groups, the Computer & Communications Industry Association and NetChoice, have also said they would launch extensive ad campaigns to oppose the JCPA. Both groups include major tech companies like Amazon, Google and Meta.

“The Journalism Competition and Preservation Act fails to recognise the key fact: publishers and broadcasters put their content on our platform themselves because it benefits their bottom line — not the other way around,” the company statement issued by Stone said.

The News Media Alliance, a trade body representing the newspaper industry and a supporter of the JCPA proposal, described Meta’s threat as “undemocratic and unbecoming”.

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“These threats were attempted before the Australian government passed a similar law to compensate news outlets, played out unsuccessfully, and ultimately news publishers were paid,” it said.

On December 5, more than two dozen organisations, including the American Civil Liberties Union (ACLU), the Wikimedia Foundation, and the Computer & Communications Industry Association, wrote a letter to Congressional leaders objecting to the proposed JCPA.

It (JCPA) “would create an ill-advised antitrust exemption for publishers and broadcasters,” the groups said. These groups have typically taken an anti-Big Tech stand on earlier issues.

What is the Australian law that compelled social media companies to pay publishers?

Australia had introduced a similar law last year, called the News Media Bargaining Code, which had attracted a similar reaction from Meta. In fact, the social media company had temporarily restricted news content from its news feed in the country.

An Australian government review of the law’s first year in effect, published in November, said the law had been a success, and more than 30 commercial agreements had been signed between Australian news outlets and either Meta or Google.

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“At least some of these agreements have enabled news businesses to, in particular, employ additional journalists and make other valuable investments to assist their operations,” the report said.

How are other countries dealing with this issue?

Much before the Australian law, in 2019, France became the first EU country to enact a directive on the publishing rights of media companies and news agencies, called “neighbouring rights”. It required tech companies to engage in discussions with publishers about remuneration for their news content.

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After long negotiations to reach agreements, Meta announced in October last year that it would pay publishers for their content.

Canada is currently debating a similar proposal, and lawmakers in the country believe that if such a legislation is approved, it would generate $241.7 million each year for Canadian news businesses.

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The enacted proposals have forced Google to launch News Showcase. Under the program, Google pays participating publishers to “curate quality journalism for an improved online news experience that benefits readers and publishers”.

Google’s News Showcase is available in a number of countries, including India, where 30 news publishers including national, regional and local news organisations are part of it.

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(Disclaimer: The Indian Express is one of the 30 publications that are part of Google’s News Showcase in India.)

First published on: 09-12-2022 at 14:22 IST
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