New Law Expected To Seriously Damage Facebook And Google’s Monopoly Power

( A new proposal that seeks to give news publishers bargaining power with Big Tech companies about how their content is distributed is not getting blind support from media companies across the country.

Some companies believe the bill would actually end up hurting local and smaller media outlets instead of helping them, as the bill aims to do.

A bipartisan version of the bill was introduced last year. On Wednesday, though, members of the Senate Judiciary anti-trust subcommittee didn’t see eye-to-eye on the recent proposal.

Amy Klobuchar, the chair of the subcommittee, is one of the co-sponsors of the JCPA, or Journalism Competition and Preservation Act. She said the bill would ensure that local news outlets are able to survive as digital ad revenues from “titans” such as Facebook and Google continue to soar.

But, the ranking Republican on the committee, Senator Mike Lee, said the bill was just a misguided effort. He said that some of the news publishers are having issues because they haven’t taken into account the evolving technology, and haven’t adapted their business models to it.

Lee further felt the proposal could end up leading to a news “cartel,” which some other witnesses at the hearing warned of as well.

Some public interest advocates also wrote a letter to Lee and Klobuchar recently that read:

“News giants with the greatest leverage would dominate the negotiations, and small outlets with diverse or dissenting voices would be unheard if not hurt.”

They added that they “wholeheartedly support the aims of the bill.” However, they have fears that it might “entrench existing power relationships among both news organizations and digital platforms and alter the free and open nature of the internet.”

Those views were disputed by the managing director of Econ One Research, Hal Singer, at the hearing. He said:

“The concept of creating a cartel here is laughable and uneconomic. The newspapers and news publishers generally would not be getting coordination rights in their dealings with consumers.

“If they got together and tried to set prices for users, they would go to jail. The coordination rights that are being delivered here are narrowly tailored here to pertain to only the news publishers’ dealings with the dominant platforms.”

Both chambers of Congress introduced the JCPA last year, but Klobuchar said that lawmakers are currently working to make changes to the proposal.

To back her bill, Klobuchar pointed out that Google raked in $61 billion in advertising revenue in just the last quarter of 2021, according to the company’s revenue report, which was released earlier this week.

If passed, the JCPA would establish a four-year “safe harbor” on a temporary basis from anti-trust laws for various news outlets. It would allow these publishers to negotiate with the main digital content distributors to be paid for their content.

Some publishers believe that this would allow mid-sized and small publishers the ability to negotiate with the Big Tech giants — something that haven’t been able to do thus far.