Klobuchar Looks to Tweak Bill for News-Big Tech Talks
Senators are working with House members to “improve” legislation that would allow news publishers to negotiate revenue sharing with online platforms (see 2201140054), Senate Antitrust Subcommittee Chair Amy Klobuchar, D-Minn., said during a Wednesday hearing. Ranking member Mike Lee, R-Utah, spoke against the Journalism Competition and Preservation Act (HR-1735/S-673) and efforts to mirror a similar negotiating framework Australia passed in 2021.
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The decline in newspaper staff is the result of declining revenue, and Big Tech is to blame, said Klobuchar. Advertising revenue for U.S. newspapers decreased from more than $37 billion in 2008 to less than $9 billion in 2020, she said. Google just reported $61 billion in ad revenue in a three-month period, a 33% increase from the same period last year, she said: “Do the math. It’s not that hard to figure it out.” She noted threats from Facebook and Google to pull out of Australia in response to the new law. Google didn’t follow through, and Facebook reversed course after a few days, she noted.
Senate Commerce Committee Chair Maria Cantwell, D-Wash., told us she supports Judiciary moving forward on S-673. “There’s a lot of cross-jurisdictional issues between Commerce and Judiciary” and Klobuchar’s “focus on antitrust activities and potential solutions I think is a good move,” Cantwell said. “We’re seeing all sorts of data relating to local journalism and the importance of it” and noted many of the predictions of Senate Commerce Democrats’ 2020 report on the tech sector’s effects on local journalism (see 2010270036) are “coming true,” including “the further loss of publications and the lack of information, particularly” during the COVID-19 pandemic.
News publishers have a “legitimate beef” with Facebook, Google and their unrivaled market power in digital advertising, said Lee. But the situation for the publishers is also the result of “shoddy” journalism and poor business decisions when adjusting to the digital era, he added. The bill would do “far more” to benefit The New York Times and The Washington Post than local news operations, he said.
Klobuchar introduced S-673 with Sen. John Kennedy, R-La. House Antitrust Subcommittee Chairman David Cicilline, D-R.I., and ranking member Ken Buck, R-Colo., introduced companion legislation.
The legislation would allow local news publishers a seat at the negotiation table, testified Trib Total Media CEO Jennifer Bertetto. Broadcasters are undermined by Big Tech, which stifles “user-generated traffic,” said WTOP(FM) Washington General Manager Joel Oxley. Big Tech’s anti-competitive terms mean stations will always get a “below-market sliver” of ad revenue, he said.
Congress shouldn’t meddle with fair use of online content, said Harvard law lecturer Daniel Francis. Forcing users and entities to pay every time they cite and share content would greatly harm functionality of the internet, he said.
About 70% of referral traffic to newspapers originates from Facebook and Google, meaning newspaper ad terms will always be below-market, testified Econ One Research Managing Director Hal Singer. A targeted intervention similar to the negotiation framework adopted in Australia would solve the competition problem and mitigate social harms, said Singer: It would alleviate the power imbalance and compel platforms to negotiate in good faith for access rights. Arbitrators could decide the value of content for platforms, he said.
Public Knowledge and nine advocacy groups wrote against the Journalism Competition and Preservation Act Tuesday. The bill “risks the open internet and incentivizes media consolidation at the cost of local news,” said PK. Common Cause, Fight for the Future and Free Press Action signed the letter, which says “small outlets with diverse or dissenting voices” would be left out of negotiations by “news giants.” The bill doesn’t address the “fundamental problem of a failed commercial marketplace for news production,” said Free Press Action Senior Director-Journalism Policy Mike Rispoli.
“Dominant tech platforms set the rules, using news publishers’ content without providing appropriate compensation, while taking the majority of digital advertising revenue in the U.S.,” said News Media Alliance CEO David Chavern.
The Senate Judiciary Committee will consider S-2710, the Open App Markets Act (see 2108110055), during markup Thursday. The committee added S-3538, the Earn It Act, to the agenda, which will be held over (see 2202010019). The Darn It Act “threatens the privacy and security of law-abiding Americans by targeting any form of private, secure devices and communication,” said Sen. Ron Wyden, D-Ore. “The bill will make it easier for predators to track and spy.”