US bill for Meta, internet giants to pay news publishers, explained

A legislative push in the United States, aimed at giving news organizations greater power to negotiate fees for content shared on social media sites like Facebook, has run into rough weather. This proposal came under attack from Meta (formerly Facebook Inc.), which threatened to remove all news content from its platform if the measure was passed, and other groups representing Internet giants such as Amazon and Google.

Australia and France have enacted similar laws, following which companies like Meta and Google have agreed to pay publishers in that country. Others such as Canada and New Zealand are currently planning similar laws.

“No company should be forced to pay for content users don’t want to see and it’s not a meaningful source of revenue. Simple: the government creating a cartel-like entity that requires a private company to subsidize another private entity is a terrible precedent for all American businesses,” Andy Stone, director of policy communications at Meta, posted on Twitter on December 6.

What is the proposed law?

The draft law, known as the Journalism Competition and Preservation Act (JCPA) of 2022, will allow publishers – who have long complained of reduced revenue as social media platforms drive large amounts of online advertising – greater power to bargain collectively with companies such as Facebook and Google for a bigger share of advertising revenue.

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The bill was introduced in Congress by influential Democratic Senator Amy Klobuchar of Minnesota and reportedly has bipartisan support.

The JCPA was originally included in the US’s annual national defense spending bill that must be passed later this year. However, on Tuesday, Congress removed the JCPA from the defense bill, causing uncertainty about the future of the proposal.

How did stakeholders respond to the proposal?

Meta has argued that contrary to publishers’ claims, platforms like Facebook actually help them in distribution. This argument was made against Australian law as well.

Two industry groups, the Computer & Communications Industry Association and NetChoice, have also said they will launch an extensive advertising campaign to oppose the JCPA. Both groups include major technology companies such as Amazon, Google and Meta.

“The Journalism Competition and Preservation Act fails to recognize a key fact: publishers and broadcasters put their content on our own platforms because it benefits their bottom line – not the other way around,” said a company statement issued by Stone.

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The News Media Alliance, a trade body representing the newspaper industry and supporting the JCPA proposal, described Meta’s threat as “undemocratic and unbecoming”.

“This threat was tried before the Australian government passed similar legislation to compensate news outlets, was played without success, and ultimately the news publishers were paid,” he said.

On December 5, more than two dozen organizations, including the American Civil Liberties Union (ACLU), the Wikimedia Foundation, and the Computer & Communications Industry Association, wrote a letter to Congressional leaders opposing the JCPA proposal.

It (JCPA) “would create an ill-advised antitrust exemption for publishers and broadcasters,” the group said. The group has typically taken an anti-Big Tech stance on previous issues.

What Australian law forces social media companies to pay publishers?

Australia had introduced a similar law last year, called the News Media Bargaining Code, which had attracted a similar reaction from Meta. In fact, the social media company has temporarily restricted news content from its news feed in the country.

An Australian government review of the law’s first year, published in November, said the law was a success, with more than 30 commercial agreements signed between Australian news outlets and Meta or Google.

“At least some of these agreements have enabled news businesses, in particular, to employ additional reporters and make other valuable investments to help their operations,” the report said.

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How are other countries dealing with this problem?

Long before the Australian law, in 2019, France became the first EU country to make a directive on the publishing rights of media companies and news agencies, the so-called “neighboring rights”. This required tech companies to engage in discussions with publishers about remuneration for their news content.

After long negotiations to reach an agreement, Meta announced in October last year that it would pay publishers for their content.

Canada is currently debating a similar proposal, and lawmakers in the country believe that if such legislation is approved, it will generate $241.7 million annually for Canadian news businesses.

The strengthened proposal has forced Google to launch News Showcase. Under the program, Google pays participating publishers to “curate quality journalism for an improved online news experience that benefits readers and publishers”.

Google News Fair is available in a number of countries, including India, where 30 news publishers including national, regional and local news organizations are part of it.

(Disclaimer: The Indian Express is one of the 30 publications that are part of the Google News Showcase in India.)


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