“Big Tech hates this bill. That to me is a strong positive for supporting it.” – Senator Ted Cruz (R-TX)
This morning, the full U.S. Senate Committee on the Judiciary convened an executive business meeting during which the committee advanced S. 673, the Journalism Competition and Preservation Act (JCPA). Though the bill was reported favorably with an amendment drawing support from the Republican members of the committee, others on the Senate Judiciary raised concerns that could presage further debate after it hits the floor of the Senate.
The JCPA was first introduced into both houses of Congress last March, with Senators Amy Klobuchar (D-MN) and John Kennedy (R-LA) sponsoring the Senate version and Representatives David Cicilline (D-RI) and Ken Buck (R-NY) sponsoring the version introduced into the House of Representatives. As originally drafted, the bill was designed to provide a 48-month window of safe harbor from U.S. antitrust laws for collective negotiation with online platforms republishing news content. The press release for the original legislation specifically mentioned Google and Facebook as companies providing the majority of online referrals to news sources.
JCPA Would Create Antitrust Safe Harbor for Joint Negotiations, Prescribe Negotiation Conduct
Just a few weeks ago, in late August, a revised version of the JCPA was released by the bill’s original co-sponsors, joined by Senator Dick Durbin (D-IL) and Representative Jerrold Nadler (D-NY). The expanded version of the bill introduces negotiation requirements for covered platforms, which the JCPA defines as online platforms with more than 50 million U.S.-based users and ownership by a person with net annual sales of $550 billion, or online platforms with at least 1 billion monthly users worldwide. Digital journalism providers eligible for the antitrust safe harbor must have fewer than 1,500 exclusive full-time employees and non-network news broadcasters engaging in standard newsgathering practices. If joint negotiations with covered platforms fail to result in an agreement within six months, the JCPA would authorize publishers to demand final-offer arbitration to resolve the dispute.
The JCPA would also define the framework by which negotiations for news article licenses would be conducted between digital journalism providers and covered entities. Prior to sending notices to covered platforms for beginning licensing negotiations, an eligible digital journalism provider must attempt to form a joint negotiation entity by issuing public notice offering other digital journalism providers the opportunity to join into such an entity. This notice starts a 60-day period during which other providers can join the joint negotiation entity, and admission criteria for joint entities cannot exclude members on the basis of size or views expressed by the publisher’s content. Digital journalism providers may petition to join the joint negotiation entity after the 60-day period, although a majority vote of admitted members is required. While a digital journalism provider may opt out of the joint negotiations at any time, that provider cannot later rejoin the joint negotiation entity or receive any payment from a license or arbitration award to the joint entity.
Provisions of the JCPA also set parameters for the conduct of licensing discussions between joint negotiation entities and covered platforms. The bill defines seven behaviors by which either party can be deemed to not be negotiating in good faith, including parties refusing to designate a representative with authority to make binding representations, parties refusing to put forth more than a single unilateral proposal, or parties entering a separate third-party agreement unreasonably impeding the ability to reach an agreement in the formal negotiation proceedings. While a refusal to negotiate also signals that a party is not negotiating in good faith under the JCPA, the bill does allow digital journalism providers to jointly deny access to news content for covered platforms in the negotiation process.
Senator Cruz Amendment on Content Moderation Stalls JCPA During Markup Session
It has not been smooth sailing for the JCPA since the bill was introduced into Congress more than a year ago. The Senate version of the JCPA entered a markup session in the Senate Judiciary Committee in early September, during which Senator Ted Cruz (R-TX) entered an amendment that would extinguish the safe harbor provisions of the bill for any news organizations that included content moderation in their negotiations with covered platforms. With Senator Jon Ossoff (D-GA) absent due to COVID-19, the amendment passed in a party line vote, prompting Klobuchar to withdraw the bill over concerns that covered platforms could game the negotiation process by introducing content moderation provisions, thus removing the antitrust safe harbor for news publishers.
The goals and statutory framework of the JCPA are similar to the increased protections for European news publishers that were enacted by the European Union in April 2019 as part of the Directive on Copyright in the Digital Single Market. Specifically, Article 15 of the Copyright Directive extended copyright protections to news publishers for the online use of their publications by “information society service providers.” Under these new rules, online platforms providing embedded versions of articles from news publishers must negotiate licenses for that content with the publisher.
The EU’s approach to promoting competition for news publishers has led to some results. While many member states of the EU were still implementing the EU’s Copyright Directive, Google had begun licensing negotiations for extended news previews with EU publishers according to a November 2021 post on the company’s official blog. This past May, Google unveiled a new tool for EU publishers seeking to enter into a licensing agreement for extended news previews, paying those publishers for content that go beyond links and short extracts. And then in June, Google resolved a dispute with antitrust regulators in France by entering into an agreement to pay more than 100 French news publishers $76 million over three years, signaling an end to Google’s efforts to fight a major fine by France’s antitrust authority for its failure to negotiate in good faith for such a license with news publishers.
While the Authors Guild has recently expressed its support of the updated language in the new draft of the JCPA, especially for provisions requiring news publishers to invest funds earned through collective negotiations back into local and regional news production, other groups have expressed concerns with the bill’s capacity to address the root problems facing the news journalism industry. In late August, the Information Technology & Innovation Foundation released a statement from the policy institute’s Vice President, Daniel Castro, in which Castro said that “[t]he digital economy has forced many industries to reevaluate their business models, and the news industry is no exception.” Castro argued that the JCPA subsidizes a failing business model and misses the fact that many news publishers choose to leverage online platforms to increase readership and ad revenue.
Bill Passes with Content Moderation Amendment, But Issues Remain
At today’s executive business meeting of the Senate Judiciary Committee, Senators Klobuchar and Cruz both spoke positively of the extensive discussions between them and Senator Kennedy. Those discussions led to the development of an amendment on content moderation that Klobuchar said was designed to address her earlier concerns on gamesmanship opportunities under Cruz’s original amendment. “Big Tech hates this bill,” Cruz said. “That to me is a strong positive for supporting it.”
However, Senators on either side of the political aisle raised further concerns with the JCPA indicating that the bill’s language may need further adjusting before it wins enough support to pass the Senate. Senator Alex Padilla (D-CA) was troubled by the possibility that groups using online channels to spread misinformation, specifically mentioning Project Veritas and InfoWars, to compel payment from covered platforms by uploading their content to those platforms and then triggering negotiation or arbitration proceedings. Senator Mike Lee (R-UT), on the other hand, argued that the bill was fundamentally flawed because it sought to improve competition by sanctioning cartels. Lee also noted the tension between the JCPA’s goals and current IP law in the United States:
“Under the terms of the bill now, with the text of this amendment in place, the only thing it seems to do is to force the platforms to pay the fair market value, specifically for the right to acquire, crawl, or index the publisher’s content. Now let that sink in for a minute. Currently they can do that for free under the fair use doctrine of our intellectual property laws. They can already do that, and they can do that for free… The bill specifically says that it doesn’t change our copyright or intellectual property laws. So, what exactly are they paying the publishers for? The platforms are paying publishers for a property right, but it’s a property right that they don’t own… under our intellectual property laws as they now exist.”
Adding to the chorus of concerns was Senator Ossoff, who voiced his belief that the JCPA did not address the core competition issues allowing Big Tech to enjoy massive market power, including intrusions into Americans’ privacy and the exploitation of consumer data. While Ossoff indicated that he wanted to play a constructive role in having the Senate pass the bill, he voiced his hopes that some of his concerns could be resolved after markup once the bill hit the floor.
Following Senator Ossoff’s comments, the Cruz-Klobuchar-Kennedy amendment on content moderation was adopted via voice vote, during which only Senators Josh Hawley (R-MO) and Marsha Blackburn (R-TN) were registered as no votes. The Senate Judiciary Committee then reported the JCPA favorably in a roll call vote in which a majority of committee members approved sending the amended bill to the floor of the Senate.