Proposed legislation that would force Big Tech to pay publishers for aggregating news content online stalled in the Judiciary Committee Thursday after an amendment introduced by Sen. Ted Cruz to prohibit censorship “collusion” narrowly passed, sharply dividing the bipartisan sponsors of the bill.
“I don’t think we can support this bill anymore,” said Sen. Amy Klobuchar, D-Minn., a co-sponsor of the bill. “I think the agreement that we had has been blown up.”
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The Journalism Competition and Preservation Act, which would temporarily exempt newspapers, broadcasters and other publishers from antitrust laws to collectively negotiate an annual fee from Google and Meta/Facebook, will be held over for a future committee hearing to determine if it moves to the Senate floor for a vote.
Google and Meta/Facebook, which dominate the nearly $250 billion U.S. digital advertising market, are the only two platforms targeted by the proposed legislation, which seeks to level the online playing field and boost struggling local news media.
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A Meta spokesperson declined to comment, while a Google spokesperson did not respond to a request for comment.
The legislation would cover thousands of local and regional newspapers, including the Chicago Tribune and other Tribune Publishing newspapers, which were acquired by hedge fund Alden Global Capital for $633 million in May 2021. It excludes the largest national publications such as The New York Times, The Washington Post and The Wall Street Journal, which have more successfully navigated the digital transition through increased subscription revenue.
The bill also covers local TV and radio broadcasters — including network owned and operated stations — that publish original digital news content and meet other eligibility requirements.
The Judiciary Committee approved several amendments during Thursday’s markup session, including reducing the sunset clause in the bill from 8 years to 6 years and requiring the loser pay attorneys fees in any litigation, before the Cruz amendment brought the markup session to a halt with concerns that Big Tech and media might collude on “blanket censorship.”
“What this amendment would do is say when the cartels sit down and negotiate, they’d say we’re not going to discuss censorship, we’re going to discuss price,” Cruz said.
The Cruz amendment was approved by an 11 to 10 vote, with one pass.
The News Media Alliance, a Washington, D.C.-based newspaper trade organization, issued a statement after the hearing encouraging the senators “to resume debate expeditiously, as the JCPA would provide a lifeline to local news.”
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While the proposal is held over in committee, a group of 21 “digital rights advocates” have lined up against it over everything from the temporary antitrust exemption to undermining copyright law and fair use on the internet. The group’s biggest concern is whether the money paid by Big Tech would bolster local journalism or benefit big media companies.
“There’s no guarantee that any of this money goes toward funding journalism,” said Sara Collins, senior policy expert for Public Knowledge, a D.C.-based advocacy organization focused on internet law and copyright reform. “This seems like a really good way to funnel money to organizations that probably don’t need it.”
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Under the bill, eligible news publishers must have fewer than 1,500 full-time employees. The annual fee would be distributed to all local publishers that participate in the collective negotiations, with 65% of the allocation based on how much they spend on journalists as a proportion of their overall budget.
Public Knowledge is among the diverse group opposed to the legislation. Other organizations include Common Cause, Consumer Reports, Free Press Action, Re: Create and Wikimedia Foundation.
One common thread among the organizations is that about half are supported financially by Google, according to public records. Public Knowledge, for example, received $50,000+ last year from Google, according to its website.
In a letter to the Judiciary Committee, the group noted that broadcasters such as Sinclair Broadcast Group and iHeartMedia would be among the largest beneficiaries of the proposal. In a statement sent to the Tribune, the group also singled out newspaper owners Gannett and Alden as beneficiaries “without any safeguards to guarantee that journalist jobs benefit.”
Alden became the second-largest newspaper owner in the U.S. behind Gannett after completing its acquisition of Chicago-based Tribune Publishing. The hedge fund immediately implemented newsroom buyouts at the Chicago Tribune and other papers.
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Last month, Gannett laid off a reported 400 employees, or about 3% of its U.S. workforce, following a larger than expected revenue decline and loss in the second quarter. McLean, Virginia-based Gannett publishes USA Today and more than 230 other newspapers.
Even opponents of the bill acknowledge local news publishers are struggling in the digital age, and need financial support to reverse a long and sharp decline.
Matt Wood, vice president of policy at Free Press Action, a Washington D.C.-based nonprofit organization, signed the letter of opposition to the Journalism Act, but also favors diverting money from Big Tech to local news through an online advertising tax.
Free Press Action, which is not supported by Google, remains skeptical that the proposed bill will benefit journalism amid media consolidation and bottom-line focused ownership.
“If we’re just taking money away from Mark Zuckerberg and giving it to Rupert Murdoch, our group doesn’t see that as a big win,” Wood said.
