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Journalism Competition and Preservation Act released amid global support

The JCPA provides temporary safe harbor from US antitrust laws, enabling local digital news outlets and TV and radio broadcasters to jointly negotiate with the largest online platforms for remuneration of their online content.

by Elena Perotti elena.perotti@wan-ifra.org | August 28, 2022

A bipartisan group of US lawmakers released this week the Journalism Competition and Preservation Act (JCPA), a bill that would get digital platforms to pay publishers fair compensation for the news they use. The bill provides temporary safe harbor from antitrust laws, enabling local digital news outlets and TV and radio broadcasters to jointly negotiate with the largest online platforms for remuneration of their online content.

The law draws some inspiration from the Australian News Media Bargaining Code, which secured for the country’s news business around $140 millions in deals with Google and Facebook. Like the Australian Code, the US bill is a competition law measure, and it foresees mandatory arbitration in case a deal cannot be reached between a publisher and a platform for the use of online content in a reasonable time. One of the main differences though, is that the JCPA specifies that the revenues resulting from negotiations or arbitration under the bill must be invested in journalism. Qualifying publishers are required to provide full transparency on how the annual proceeds are spent to support news.

The main objective of the law is to correct the bargaining imbalance between publishers and platforms when it comes to establish a payment for access to online news content. WAN-IFRA’s member association News/Media Alliance has been championing the JCPA since inception and has compiled a comprehensive resource center, including a collection of myths and facts.

“There is a ton of revenue that the platforms receive from our content that is not paid back to news publishers,” said Danielle Coffey, executive vice president and general counsel of the News Media Alliance. “Once we move forward, we’ll be able to compel payment from the platforms, which would be transformative for our entire industry”.

Support for the JCPA spans the globe, with letters and statements endorsing the bill coming in from groups in Australia, Canada, Europe, Latin America and the Caribbean.

The Journalism Competition and Preservation Act (JCPA) provides news companies with an eight-year temporary safe harbor from antitrust laws, allowing them to collectively bargain with tech companies. It will only apply to digital journalism providers – including websites and mobile applications – employing fewer than 1500 full-time employees, what excludes major publications such as The New York Times, The Wall Street Journal and The Washington Post. To qualify publications must meet several criteria. Namely, they must: perform a public information function “comparable to that traditionally served by newspapers”, with at least 25 percent of the content centered on topics of current local, national, or international public interest; provide information mainly to a United States public; update their content at least weekly; have generated at least $100,000 in revenue from their editorial content in the previous year.

The law applies to “dominant online platforms” with at least 50 million U.S.-based users and that are “owned or controlled by a person that has either net annual sales or market capitalization greater than $550 billion” or “not fewer than 1 billion worldwide monthly active users”. This threshold would include only Google and Meta/Facebook, which account for about half of the nearly $250 billion U.S. digital advertising market.

A digital journalism provider that intends to exercise their rights under the JCPA needs to publish an announcement inviting other providers to join within 60 days their entity for joint negotiation. A joint negotiation entity is validly formed when it has at least two members. The entity sends a notice to a platform covered by the bill stating its intention to start a negotiation under the JCPA and identifying its members. The same notice needs to be sent to the Federal Trade Commission and the Assistant Attorney General in charge of the Antitrust Division of the Department of Justice. If an agreement is not reached in 180 days, the entity can initiate a final offer arbitration.  The proceeding starts ten days from the notice, before a panel of three arbitrators. Both the entity and the platform will submit their final offer for the remuneration due to the entity members for access to their content by the platform. The arbitration panel will choose one of the offers without modifications in 60 days. The parties must start execution of the decision within 90 days. Article 28 (c) states that an eligible digital journalism provider shall “provide public transparency regarding the use of any funds received” under an agreement or arbitration decision within the JCPA “to support ongoing and future operations to maintain or enhance the production and distribution of news (…) including public reporting regarding the amount of funds received each year”.

WAN-IFRA maintains that the press sector needs to be sustainable in order to stay free and independent. For quite a few years, our global membership have shared gripping concerns in the face of shrinking print revenues, and the shift of a large portion of their potential digital profits to the online platforms.

According to our World Press Trends research, more than 56% of the news media revenues still originate from print, with advertising being the leading source of revenues. In 2020 Digital advertising attracted 52% of all ad spend, and in 2022 it is expected to surpass two-thirds of total media ad spending, but the volumes are very far from ensuring the sustainability of the news industry. In addition, more than 60% of this growing revenue stream is shared among Big Tech companies, with any other actor, including news content creators, left with about one-third of the whole digital advertising market. Moreover, the dominant tech platformsabsorb every year more than 90% of all the new advertising market.

In a scenario where digital circulation and advertising are the only growing revenue streams of the news media industry, the fact that the great majority of those revenues are absorbed by big tech puts at risk the sustainability of the news sector itself.  The JCPA would effectively tackle this challenge by allowing publishers to come together to negotiate with the platforms for the compensation they deserve, and theenforcement mechanism will ensure equitable compensation to news publishers in the United States. WAN-IFRA letter of support to the JCPA can be found here.

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