The Journalism Competition and Preservation Act Will Produce Neither Competition Nor Preservation

In response to the very real pressures that online news outlets are facing, Congress continues to believe the very flawed Journalism Competition and Preservation Act (JCPA) is a magic solution. It is not. In fact, it is actively dangerous. And there’s a better solution available.

The way the JCPA is supposed to work is by giving an antitrust exemption to news sites, allowing them to negotiate as a bloc with sites like Google and Facebook, with the goal of getting paid every time those sites link to news articles. There are a few major, fundamental problems with that premise. For one, creating a new cartel to deal with existing monopolists is not competition, it’s the opposite. For another, creating an implicit right to control linking in any context won’t preserve journalism, it will let it rot away. Finally, the focus on getting paid for links makes even less sense when the problem, historically, has been the domination of the digital ad market by a few huge players. The Competition and Transparency in Digital Advertising Act actually targets that specific problem much more effectively than the JCPA.

Competition? Not Really.

As mentioned above, competition doesn’t flourish when a group—even one of smaller newsrooms—are allowed to form a cartel. It just means that both sides of this fight are now huge. Proposed changes to the bill will limit the organizations that could get compensation under this scheme to publications with 1,500 employees or fewer. But that won’t preserve competition, because the loss of local and independent news has already happened. Many smaller publications are now owned or backed by large corporations and venture capital funds. And the industry is consolidating at a rapid rate.

The large corporations and investment vehicles that dominate online journalism took advantage of the mess created by Facebook and Google’s ad domination. And the JCPA would allow them to reap the rewards of buying up, laying off, and click-baiting these newsrooms. That’s infuriating.

Preservation? Also Not Really.

It’s equally untenable to restrict who can link to publicly available pages on the web. That implies a sort of property right in links, an ownership of how information is shared. That has grave consequences for the entire internet, which depends on the ability to link to information sources from far and wide. Linking isn’t copyright infringement, at least under current law.  But the JCPA risks creating a new quasi-copyright law for linking, or even leading the courts to extend copyright law to cover some forms of linking.

Even if it applies only to Facebook and Google, the JCPA would act as a link tax. Link taxes have never worked whenever they have been tried in places like Australia and the European Union. And in those cases, there wasn’t a First Amendment to consider. The JCPA is also reported to prevent companies from simply refusing to link to certain outlets to avoid paying, which encroaches on those companies’ free speech rights to refuse certain content. Just as the law can’t require newspapers to include every viewpoint on a topic, it can’t require a news aggregator or search tool to link to sources it chooses not to feature.

And without an unconstitutional “must carry” provision, news aggregators and search engines will simply refuse to link to news outlets that demand payment, meaning that some of the most reliable sources of news and information will become far less accessible to the public.

That doesn’t just affect Google and Facebook. That affects everyone who shares articles online. It even affects journalists in smaller newsrooms, who base their reporting on the earlier reporting of others and link back to those stories. That’s good journalistic practice. It lets readers see where information is coming from and trace a story back to its inception. It’s the internet equivalent of a footnote. If it suddenly becomes fraught to link, readers lose valuable information and context.

Fix the Ads, Not the Links

Tech giants like Google and Facebook have indeed harmed journalism, but not by providing links to articles. Rather, their control of digital advertising markets and the vast majority of data in those markets means they can squeeze publications and advertisers by extracting higher shares of advertising revenue.

For example, starting in 2015, many online media companies started “pivoting to video,” gutting their traditional newsrooms and spending large amounts of money to build video journalism operations from scratch. Part of the impetus for that pivot was metrics showing that audiences preferred video to text—metrics provided, in large part, by Facebook. In 2014, Facebook claimed that “Facebook has averaged more than 1 billion video views every day.”

Those metrics turned out to be grossly inflated, by as much as 60 to 80 percent. Advertisers like video more than print, since video ads are harder to ignore than ads that can be scrolled past in a text post. And they were told people were watching these videos. Facebook and the like want more video to run ads in because it allows them to make more money. And by claiming that this is what “readers want,” news media could be manipulated into creating more video.

Because the preference for video did not, in fact, extend to viewers, the pivot to video was devastating for news media—especially new, independent outlets who had placed a huge bet on costly video content based on Facebook’s misleading metrics. And none of that harm is related to news aggregation or linking. It’s related to the size and power of Facebook’s advertising division. With Facebook and Google dominating online advertising, publishers had no choice but to believe the metrics those companies were reporting. If there had been alternative ad networks and other effective business models for news media, there would have been more metrics to give the whole story—that Facebook’s numbers only held up if you counted someone as “watching” a video if three seconds of the video happened to play.

The Competition and Transparency in Digital Advertising Act, also called the Digital Advertising Act or DAA, targets the problem at its source. It breaks up the ad market into four components and prevents companies making more than $20 billion a year in advertising revenue from owning more than one of those components at a time.

Splitting ad empires apart holds the promise of a fairer ad market. Separating tech companies’ content and app businesses from their ad businesses, and splitting the sell-side and buy-side of ad technology, will make self-preferencing, bid-rigging, and other forms of fraud and cheating less profitable, less lucrative, and easier to detect. This will help media producers and individual creators get their rightful share of revenue from the ads that run against their work, and it will help protect small businesses and other advertisers from being price-gouged or defrauded by powerful, integrated ad-tech businesses.

This is the answer we need, not the JCPA.