A few weeks ago, the news was abuzz with the controversy over an Australian law that would make social media companies and even search engines pay for their making available content originating with traditional media outlets.  While the controversy was hot, there were articles in many general interest publications asking whether that model could work outside Australia – and perhaps whether such a bill could even be adopted in the US.  What has received far less notice in the popular press was a US version of that bill that was recently introduced in Congress to address some of the same issues.  The Journalism Competition and Preservation Act of 2021 was not introduced in response to the Australian law, but instead it is an idea that pre-dated the overseas action.  Versions of the US bill have been introduced in prior sessions of Congress, though it never before gained much attention.  But this year’s version has been introduced in both the House and the Senate, has already been the subject of a Congressional committee hearing, and has gained support (including from the National Association of Broadcasters and even the tech company Microsoft).

The intent of these bills, and other similar legislation considered across the world, is to open a new revenue stream for traditional media outlets which cover local news – outlets that have been hit hard by the online media revolution over the last 25 years.  As we have noted in other contexts (see for instance our articles here and here), as huge digital media platforms have developed in this century, these platforms have taken away over half the local advertising revenue in virtually all media markets – revenues that had supported local journalism.  The perception is that this has been done without significantly adding to the coverage of local issues and events in these markets.  We certainly have seen the economics of the newspaper industry severely impacted, with many if not most newspapers cutting staff and local coverage, and even how often the papers are published.  Broadcasting, too, has felt the impact.  Many legislators across the globe have come to the conclusion that these digital platforms attract audiences by featuring content created by the traditional media sources that have been so impacted by online operations.  To preserve and support original news sources, various ways in which the content creators can be compensated for the use of their works, such as the legislation in the US and Australia, are being explored.  We thought it worth looking at proposed legislation in the US and comparing it to the more extensive legislation introduced in Australia, and to highlight some of the issues that may arise in connection with such regulatory proposals.

The US proposal simply provides an antitrust exemption for creators of news content to get together to negotiate collectively with tech companies for the use of that content.  The bill, as introduced, does not require that the tech companies reach any collective agreement with media companies, nor does it even require that they negotiate with these companies.  Presumably, the legislation envisions that tech companies would have an incentive to do so as the media companies, with an antitrust exemption, could join together and forbid use of their works unless the tech companies negotiated an acceptable agreement.    Without an antitrust exemption, media companies would be limited in their ability to jointly negotiate (and potentially boycott) these tech platforms -the very issue raised in the countersuit filed by GMR against the RMLC in connection with the attempts of the radio industry to negotiate reasonable rates with GMR for the use of the musical works that it controls (see our article here).

The bill would extend this protection to collectively negotiate to any print, broadcast or digital news organization that has a professional editorial staff that creates and distributes original news content on at least a weekly basis.  The bill applies to any FCC-licensed broadcaster who airs original news and related content.  Any other media company would have to meet the requirement that it “provides original news and related content, with the editorial content consisting of not less than 25 percent current news and related content.”  There is no definition of “editorial content,” so the effect of this 25% requirement is unclear, but presumably the bill is saying that at least of 25% of the news content must be current news as opposed to some sort of archived, documentary or features that are not covering current events.  But that provision does not apply to FCC-licensed broadcasters.

The tech companies that are the target of the negotiations are limited to those very large companies that have over a billion aggregate worldwide active monthly users to all of a company’s services (so, for instance, users of Facebook, Instagram and WhatsApp would be included in the monthly user count).  The companies subject to the negotiations also must have a “website or other online service that displays, distributes, or directs users to news articles, works of journalism, or other content on the internet that is generated by third party news content creators.”  This would seem to encompass companies like Facebook that display journalistic works on their sites and apps, and to search engines like Google that direct users to such content.

Under the bill, in any such negotiation, news creators would be be entitled to rely on the antitrust exemption only if they are negotiating on more than just the price that they will be paid.  They also must be negotiating the terms of the use of their content, including terms that relate to “the quality, accuracy, attribution or branding, and interoperability of news.”  The terms reached in any negotiation must be available to all similarly situated news content creators, presumably including those not in the group conducting the negotiations.  This would be much like the music licenses offered under antitrust consent decrees by ASCAP and BMI that must be offered to all similarly situated licensees in the same manner.

The Australian legislation, the News Media and Digital Platforms Mandatory Bargaining code, was much more far reaching and contained elements that some US media companies might balk at.  The legislation requires that big tech platforms negotiate with media registered media businesses and, if they do not reach an agreement for carriage of the news content, a government panel would determine a reasonable rate for the news used by the online platform.  But only media companies registered with the government would be eligible to participate in the negotiations – and that registration requires that the government make certain decisions about the media outlets before they can be registered (or to maintain their registration).  The media entity must have revenues of over $150,000, it must have as it primary purpose the creation of news content, it must operate predominantly for the purpose of addressing an Australian audience, and it must meet a “professional standards test” by adhering to certain industry professional guidelines  These provisions seem to provide the government with significant discretion to determine the media outlets that could profit from any mandatory bargaining requirement.  While such registration is not uncommon in other parts of the world, in the US having the government approve media outlets based on the content that they provide would be a tricky First Amendment issue.

In Australia, attempts to implement the law ran into major problems when Facebook decided to pull all local content from its platform in that country, resulting in some retreat from the mandatory nature of the duty to negotiate.  The US bill also is likely a starting point, rather than finished legislation that could be immediately enacted and implemented as written.  The premise of the bill – that jointly negotiating media companies would have the ability by joining together to force negotiations from the big tech platforms – is untested.  It also presupposes that the media companies could in fact pull their content from the platforms.  Existing US Copyright law, such as the Fair Use doctrine, gives companies the right to use content created by others without permission or compensation in certain instances.  Indexing sites like Google have often been found to have the right to provide links to content without permission under Fair Use, if the content used in connection with the link is limited to that necessary to identify the content.  Perhaps more concerning would be the ability of users to post content on a site like Facebook or Twitter commenting or criticizing the content prepared by a media company without linking to or excepting that content.  This also has First Amendment implications – you would not want to have the government enforcing any prohibition on people using an excerpt of a story run by the New York Times, the Wall Street Journal, MSNBC or Fox News in connection with commentary or criticism on that content.

We recently wrote about the desire of government to regulate online media as there is criticism of the impact of big tech from across the political spectrum.  The Journalism Competition and Preservation Act of 2021 is but one of the many proposals now pending in Congress – with more proposals sure to follow.  These proposals all must be handled carefully, as while regulation may be needed (seemingly even Facebook has been acknowledging that need in a set of its own commercials now running across all media platforms), the regulation can affect core values in our society given the reach that these platforms now have and the role that they have assumed for many of being our modern town square where diverse opinions are expressed.  We will be following this bill and writing about other aspects of this debate in future articles.