Google just completed a week with more news headlines than it probably wanted. Some of them were very positive, like earnings in the last quarter going up 32% year-over-year. Some of them were less positive, like the approval by the Senate Panel of the Open App Market Act that will now pass to the Senate floor for a vote.
Read more: Senate Judiciary Panel Approves App Store Payments Bill
Then, there was another legislative development whose fate is still unknown, but from which Google may still escape unscathed. On Wednesday, the U.S. Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights held a hearing to debate the benefits and risks of the Journalism Competition and Preservation Act (JCPA).
This bill, introduced in both chambers last year, essentially establishes a temporary four-year antitrust immunity for news outlets to come together and negotiate collectively with Google and Meta.
By enabling news outlets and publishers to collectively negotiate with the tech giants, including small companies that otherwise wouldn’t have any bargaining power, they could increase their revenues and guarantee the continuation of high-quality journalism and local news.
While well-intentioned, the bill drew criticism not only from the tech giants, as expected, but also from some representatives of local news, who maintained that the solution to the market power acquired by Google and Meta is not to give them more power.
“I strongly support close antitrust scrutiny of tech markets, including in areas that relate to news. But I recommend against the creation of a national news cartel: even in response to the remarkable success of Google and Facebook in winning advertising business, and even given the genuine struggles that many news publishers face today,” said Daniel Francis, who formerly served on antitrust arm of the FTC, during his intervention.
He explained that the problem the media industry faces when it comes to digital advertising is not because Google and Facebook are monopsonists — that is, buyer-side monopolist — but because they are simply using the freedom, provided by U.S. laws, to link and preview content for free on the internet. In his view, even if Congress authorizes the collective agreement to negotiate, this wouldn’t revoke the right that any company, such as Google, Meta, Bing, DuckDuckGo or Twitter, has to link content to their websites.
The rest of the interventions offered a divided view on the benefits of the bill, with several of the interviews suggesting that the aim of the bill is well-meaning but that it could nonetheless hurt small and local outlets.
On the other hand, Jennifer Bertetto, CEO of Trib Total Media, claimed that the “JCPA is a tailored solution to help news publishers have a seat at the table and negotiate fair terms for the significant value of their content that platforms use and profit from.”
At the crux of the discussion is fair compensation. Google and Meta are working to determine a fair amount to pay news publishers, since they link and earn money from content on their platforms.
Australia passed last year a similar bill, not without controversy, that compels Google and Meta to strike licensing deals with publishers or face the prospect of arbitration if they fail to reach an agreement. Canada and the U.K. are also considering similar legislation.
However, the benefits of this legislation are not straightforward, and it may not find as much bipartisan support as the other two bills recently passed by Senate panels, the Open App Market Act, with a 20-to-2 vote, and the American Innovation and Choice Online Act, with a 16-to-6 vote.
In any event, if the bill is approved, which isn’t a given, it won’t prevent Big Tech companies from linking news in their platforms. It may only cost them a bit more of money to do so.
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