An Antitrust Exemption for News Media Won’t Take Us Back to the Time Before Big Tech

Something is rotten online. Facebook and Google dominate the market on online advertising, depleting the resources needed by any other company reliant on serving digital content. For news media, the confluence of an increasingly digital world with Google and Facebook’s siphoning of online advertising revenue has been catastrophic. Unfortunately, giving news media an antitrust exemption to bargain as a group with Facebook and Google will not be the time machine that brings news media back to where it was.

Last week, the U.S. House of Representatives’ Judiciary Committee held a hearing called “Reviving Competition, Part 2: Saving the Free and Diverse Press.” There was a lot going on during the hearing, a lot of it irrelevant to the very real problems faced by the increasingly concentrated media ecosystem, or the death of small, local, and independent news.

Leaving aside the detours, the real subject of the hearing was the Journalism Competition and Preservation Act, which would give an exemption to publishers and broadcasters from antitrust laws, allowing them to form a unified bloc for negotiations with tech companies. The idea is that news media is struggling—present tense. The problem is that news media has struggled, past tense. Allowing this exemption will not bring back the papers that have been shut down, the journalists who have been laid off, or unwind the media mergers that have occurred in the meantime.

During the hearing, the argument was made that this was a lifeline to keep news media afloat while more substantive changes to the law were made—changes that would decrease the power of Big Tech. The other argument made was that such an exemption would revitalize local press by giving a path to profitability. It was also stated that the exemption would be time-limited and could apply only to certain smaller publishers.

But such an exemption doesn’t answer the question of where journalists are supposed to get startup funds to build new outlets to replace the ones that are gone. It does not answer the question of just who will negotiate, as so few small outlets exist now. It does not answer the question of why the hedge funds, private equity ghouls, and giant media near-monopolies should get to reap the benefits of this new exemption when they have already benefitted from Big Tech’s ad takeover, snapping up and gutting news outlets at bargain prices. It does not propose a way to stop these companies from using whatever is negotiated under this exemption as a jumping-off point for their own negotiations.

The Australia Model

Mentioned many times during this hearing was the recent news from Australia, where Google and Facebook faced off on the home turf of News Corporation, the Murdoch empire that also controls Fox News, Sky News, and leading newspapers in many countries. There are important lessons to take away from that.

First, we have to be honest about the state of media. News is important, yes. It’s a public good. Reporters are doing something they feel called to do. However, few truly small, independent media operations exist right now. And in the case of certain companies—like the ones owned by the Murdochs or the Sulzbergers—it would be a mistake to assume the ills of the industry are actually being visited upon them: or that catering to their needs will trickle down to the rest of the journalistic ecosystem.

The fundamental innovation behind Australia’s law is that it would create a direct conduit of revenue from (explicitly) Google and Facebook to media institutions, who could engage in collective bargaining to set rates for the tech companies use of their material. Those institutions would include local, small and non-profit media as well as the giants, and rules about treating all news services (including those not in the bargaining).

The challenges with this approach began before it even passed into law. Alphabet struck its own deal with Murdoch; Facebook shut out (clumsily) every Australian news site from its service in protest.

The Australian proposal isn’t as bad as the EU’s “link tax” plan, which explicitly tied aid for news media to an expansionist view of copyright. Trying to use copyright to fight Big Tech doesn’t hurt them, they just put up filters, but it does make it harder for others to properly cite older reporting or to build on and comment on events happening around the world. But t struggles with similar problems: the companies can still, it seems, separate the big players from the small. And, ultimately, the real enforcement relies on Big Tech needing external news services to profit. The tech giant’s profit center is not “stealing” news media content: it’s “stealing” its advertising. That Google in Europe, and Facebook in Australia, were willing and able to simply decline to host news media demonstrates this. And the only solution in this model for that asymmetry (as the EU eventually determined) is to compel the tech giants to carry particular companies’ news–which raises broader questions about compelling speech, free expression and regulation of the marketplace.

The bill does have some ideas that are missing in American legislation. A call for transparency around how companies choose to promote and rank news stories is one we echo. A prohibition on using the algorithm to retaliate against companies trying to avoid their services or avoid forking over revenue to tech companies is also a smart move.  But ultimately, Australia is trying to solve a problem by freezing that problem in time. Right now, media of all kinds feels dependent on Big Tech. Only one of the consequences of that dependency is an unbalanced bargaining stance between the two when it comes to media clawing back some advertising revenue from the tech giants. Australia’s law fixes that problem, at the cost of making media explicitly and statutorily dependent on Facebook and Google. It takes two monopolistic markets and ties them together in the law, with a fake “deal” revolving around an incorrect assumption that Big Tech has profited by siphoning precious news snippets from the existing media.

The United States shouldn’t look to the Australian model to solve its problems – mainly because Australia lacks the one compelling solution that the United States possesses. The Australian government identified that the crisis in news comes from monopolistic behavior, but could not take the obvious step of breaking up the monopolies – at least on the tech side – because those companies are based elsewhere. They are, of course, based in the United States, where they can, and should, be dealt with as monopolies, with their power and scope greatly reduced.

What Are We Really Trying to Do Here?

There is a fair amount of gallows humor among journalists these days. There are jokes about how everyone will either work for the BuzzPostTimes or GoogBook. There are jokes about how newsletters are just the latest iteration of the infamous “pivot to video” which brought down so many companies (and which Facebook should absolutely not be let off the hook for encouraging). There are a few bold experiments out there, but, it should be noted, they are often operating outside the realm of Facebook and Google advertising that is the target of this bill. The days where newspapers raked in money from classifieds and advertising are clearly over. This exemption doesn’t fix that. And it doesn’t even throw a lifeline where it is most needed.

Media consolidation is reaching its zenith. As is Big Tech power. Even as part of a larger package, this proposal won’t do what it is meant to. Instead, Congress should focus its attention on making the sweeping changes to antitrust law we so desperately need. Figure out how to curb these oligopolies’ power. Think beyond just breaking them up to what regulations will prevent this from happening again. Figure out how to help news media in this century, rather than trying to return them to the last one.