JCPA Update: The Dangerous Link Tax That Still Won’t Save Local Journalism
While many facets of antitrust enforcement have been subject to fierce debate over the years, it has long been nearly unanimously agreed that allowing businesses to form rent-seeking cartels is bad for consumers. Yet, somehow, a bipartisan group of U.S. lawmakers has decided that it’s a good idea not only to allow the news media industry to form (temporary) cartels, but also to force platforms to negotiate with the newly formed cartels through radical must-carry provisions. The result will both fail to address the problems facing journalism today and harm consumers of digital platforms and news alike.
Enter the Journalism Competition and Preservation Act (JCPA), H.R. 1735 and S. 673. The JCPA permits exactly this scenario, with the fun detail that it works by allowing the media cartel to create an effective “link tax” that large internet platforms would be forced to pay in order to link to, or host snippets of, articles. Although we broke down many of the flaws in this legislation previously, the JCPA has since been marked up by and passed through the Senate Judiciary Committee, with substantial revisions. The core issues with the bill remain intact:
creating a new pseudo-copyright that endangers freely linking to content on the internet;
empowering large journalistic conglomerates over the small outlets it claims to benefit; and
attempting to use rents extracted from private companies to cover for the failure of legacy media to adapt to changing markets.
The original text of the JCPA already authorized print media companies to form one or several cartels and collectively bargain with the largest online platforms—defined in terms that single out Facebook and Google. Although the bill hinted at these news cartels being able to demand payment for merely linking to their content, or hosting snippets like the results you get from Google News, the mechanism by which they would be paid was left vague. However, the fact that the bill allowed news companies to withhold content strongly suggested a claim to some sort of property right, or ancillary copyright, that the targeted platforms would owe for hosting links and snippets.
This would create a de facto “link tax,” something that many experts warned threatens the structure of the internet as we know it. As an internet pioneer put it, “The ability to link freely — meaning without limitations regarding the content of the linked site and without monetary fees — is fundamental to how the web operates, how it has flourished till present, and how it will continue to grow in decades to come.” Even if this pseudo-copyright link tax were limited to just the news articles on the targeted online platforms, it would set a terrible precedent.
Enlisting governments to force payments from Big Tech is a tactic that has worked for corporate news lobbyists in other countries, most notably in Australia. There, however, Google and Facebook were allowed via a late loophole to bypass the link tax by simply cutting payment deals with the large news companies directly. Nevertheless, the News Media Alliance, an industry lobbyist which was a major supporter of this Australian “mandatory bargaining code,” touts the victory down under as a successful analogue to the JCPA here. In fact, they have described the JCPA as merely a first step and have explicitly recommended that U.S. lawmakers go further by revising copyright law to limit fair use of links to news content.
The revised JCPA gets closer to this goal by essentially rigging the outcome of the news cartels’ negotiations via a must-carry provision and forced arbitration. Government-forced arbitration forecloses any possibility of Google or Facebook walking away from the table, and strongly incentivizes the platforms to concede to the cartels’ demands rather than be subject to an all-or-nothing decision by a third-party mediator. The extent to which this forced arbitration tilts the outcome against the platforms caused one of the JCPA’s original co-sponsors, Sen. Rand Paul (R-Ky.), to withdraw his support from the bill.
Meanwhile, by forcing the covered platforms to carry content from any outlet that is part of one of these news cartels, the JCPA compels platforms to carry speech they may find objectionable. Republican senators became concerned that Facebook and Google might react to this must-carry requirement by negotiating content moderation provisions with the news cartels that might allow for censorship of conservative news outlets as part of a payment deal.
After a row over content moderation that nearly killed the bill, senators reached an agreement on amended language to prohibit content moderation decisions from being part of the bargaining process. However, the underlying concern remains that requiring the covered platforms to not only carry but also pay to link to content that violates their community standards clearly violates platforms’ rights to free association and editorial discretion under the First Amendment.
The revised text also continues to furnish the largest news corporations with most of the bargaining power, and actually adds large broadcasters to the companies that are allowed to join these cartels. Large conglomerates effectively get a vote for each of the eligible smaller outlets that they own and control, and will reap the greatest benefits. And the print and broadcast media corporations will be shielded by subsidies from the need to adapt their business models to the actual needs of their customers. Meanwhile, the smallest and newest news outlets, along with new media such as bloggers, podcasters, and other independent and freelance journalists, are entirely excluded from the JCPA’s benefits.
It is on account of this litany of flaws that the JCPA has attracted a diverse coalition of detractors, including many groups which are generally not avid defenders of Big Tech. The crisis facing local journalist outlets is real, and their preservation may be a worthy goal, but the JCPA is poised to not only fail at achieving that goal but to cause a multitude of new harms in the process.