The Journalism Competition and Preservation Act (JCPA) is being reintroduced by big media companies. This bill would allow them to be protected from online competition and help legacy media survive in the face widespread distrust and a failing business model.
The Wall Street Journal published an exclusive story about the new version JCPA. News Corp was a major supporter of this legislation and similar efforts around world. It stated that the new version would offer legacy media companies an even greater advantage by giving them an antitrust exemption for ten year instead of the original four-years.
Publishers would have the legal right to form a cartel (which is usually illegal under antitrust laws) to bargain collectively with Silicon Valley tech giants for financial aid and special treatment such as prioritization of search results in news feeds and other core features.
An arbitration process would be imposed on Big Tech companies to force them to agree to terms with Big Media. An arbitrator will force Big Tech companies to agree to a settlement that favors discredited Big Media companies if they are unable.
The bill’s likely losers are the younger generation of independent journalists and content producers on YouTube, Twitch and other platforms. These creators are increasingly sought after by younger generations as trust in legacy media diminishes. This new generation of media creators, which aren’t traditional media companies would likely be exempted from the bill’s benefits.
The bill’s previous version excluded media creators that are not “similarly situated”, which would certainly have excluded legacy media’s online rivals.
The Wall Street Journal report does not indicate that this has changed.
Multiple Republican lawmakers, including GOP leader Rep. Kevin McCarthy (R.CA), Sen. Marco Rubio(R-FL), Senator Marsha Blackburn and Sen. Tom Cotton both denounced the JCPA. They warned that it is a handout for discredited media companies and that it also deepens their collaboration with Big Tech.
Experts, including FCC Commissioner Nathan Simington and President Trump’s Big Tech expert Prof. Adam Candeub, as well as former federal antitrust enforcer Dr. Daniel Francis, have warned that the legislation is wrongheaded.
The Wall Street Journal cites a new amendment that limits the protections for media companies with less than 1,500 employees as proof that the amended bill does not just serve to bail out the richest and most powerful media companies in the world.
This is false. This is incorrect. Many influential and wealthy national media brands, such as MSNBC and Washington Post, have less than 1,500 employees.
It would also be trivial for companies employing more than 1,500 people, such as the Wall Street Journal to use corporate restructuring to separate divisions into separate companies. This will allow them to take advantage of the bill’s protections.
In the corporate world, restructuring to avoid antitrust laws is common. Google, which is the owner of YouTube, restructured into Alphabet. YouTube and Google are technically now mere subsidiaries.
The Wall Street Journal does not indicate that the 1,500-employee cap will be addressed. Many media conglomerates include News Corp, Disney and Hearst. They own multiple news companies employing 1,500 or less.
The Wall Street Journal report does not indicate that these huge parent companies, some of which are worth billions of dollar, or their subsidiaries will be exempted from the cap.
The bill is, in other words, corporate welfare for some the most untrusted brands around the globe.
It also happens at a moment when Big Tech companies are willing to give huge sums of cash to legacy media companies.
It was revealed that Facebook paid $1.6 billion in licensing fees to news publishers last year. Google has been investing hundreds of millions in news companies over the years. A recent deal that provided access to News Corp content for tens of million dollars was one of these.
Big Tech favors Big Media in many other ways. This includes censoring its competitors and artificially promoting them for users. Breitbart News published a YouTube leak in 2018 that showed how YouTube rigs search results to favor legacy media.
Despite the favoritism they receive and the handouts that they have already received, the big media companies are still pushing for the JCPA and similar laws across the globe.