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US could follow Australia in making Facebook, Google pay for news

FILE - In this Aug. 11, 2019, file photo, an iPhone displays the Facebook app in New Orleans. U.S. lawmakers introduced a new bill to allow news organizations to collectively bargain for Google and Facebook to pay for content. (AP Photo/Jenny Kane, File)
FILE - In this Aug. 11, 2019, file photo, an iPhone displays the Facebook app in New Orleans. U.S. lawmakers introduced a new bill to allow news organizations to collectively bargain for Google and Facebook to pay for content. (AP Photo/Jenny Kane, File)
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Australia has changed the relationship between the news media and digital platforms by requiring Google and Facebook to pay for original content, and the U.S. Congress is looking at a similar approach to rein in Big Tech and aid the journalism industry.

On Tuesday, Facebook reached an agreement to pay Rupert Murdoch’s News Corp for journalism content posted on the platform. The deal came several weeks after Australia passed a law allowing news providers, like News Corp, to negotiate the price platforms pay to link their content in news feeds or search results.

Facebook originally opposed the measure. Last month it shut down news across the country to protest the Australian government's requirement that it pay publishers for their work. Google made a similar threat, without following through. Now, both companies have penned agreements with major Australian publishers to pay for the content that drives traffic and advertising dollars to those platforms.

News Corp CEO Robert Thomson celebrated the deal as "a landmark in transforming the terms of trade for journalism."

The victory for Australian publishers is having an impact across the world. Last week, a bipartisan group of senators and congressmen reintroduced legislation that would allow news companies to band together to demand payment for the content shared through online platforms.

Under the Journalism Competition and Preservation Act (JCPA), Congress would give news organizations a four-year safe harbor from antitrust action, allowing small and large news to collectively negotiate the terms under which online platforms could distribute their content.

"It's clear that we must do something in the short-term to save trustworthy journalism before it is lost forever," said Rep. David Cicilline, D-R.I., one of the lead sponsors of the House legislation. "We need an all-of-the-above approach to save journalism and to take on monopoly power."

In the Senate, Amy Klobuchar, D-Minn., hailed the legislation as a way to "level the playing field" and give media outlets "a fighting chance" in negotiating against the tech giants.

Previous versions of the bill failed to garner enough support, particularly among Republicans. That opposition is falling away, though, as a growing number of Republicans are eager to challenge social media platforms, they claim are censoring conservative voices.

In a Judiciary subcommittee hearing last week, Rep. Ken Buck, R-Colo., accused companies like Facebook and Google of "sabotaging Americans' access to information" and dictating what content can be seen. Buck is the leading Republican co-sponsor of the JCPA.

"Big tech companies have become digital kings," he argued. "This bill is a step in the right direction to dethroning those digital kings."

The bills have almost an even number of Republican and Democratic co-sponsors and there is bipartisan momentum within Congress in favor of regulating large tech platforms. Lawmakers have begun exploring new antitrust rules, legislation to break up large companies and investigations into ad market monopolization. At the state level, dozens of attorneys general have filed anti-monopoly lawsuits against both Facebook and Google.

Advocates say the pressure is building because of the Australian law and a recent European Union copyright reform that requires tech giants to pay publishers for snippets of content displayed on their platforms.

"News publishers around the world are understanding the challenge and that we need solutions," said David Chavern, president and CEO of the News Media Alliance. "Essentially, what we have in the U.S., is an understanding that the world is moving on these issues and we’re either going to do something or get left behind."

According to a recent Pew Research survey, 86% of Americans get their news on a smartphone, tablet or computer, and most of those news consumers are using social media or a search engine to call up the information.

More people are online than ever before, and online readership of news is at an all-time high. Yet, newspapers, digital news and local television broadcasters have seen revenues dry up. They've been forced to lay off workers, consolidate or shut down altogether. In the last decade. One in five newspapers has stopped publishing since 2004. The number of people working in newsrooms dropped by more than 50% between 2008 and 2019. The COVID-19 pandemic further accelerated the downward trend.

"We are truly facing an extinction-level event for local news," President of the NewsGuild-Communications Workers of America Jonathan Schleuss told lawmakers last week.

News organizations have lost the largest portion of their revenue to the "digital ad duopoly" of Facebook and Google, which account for the vast majority of online news referrals. According to Digital Content Next, a trade organization for online publishers, platforms owned by Facebook or Google directed two-thirds of outside traffic to premium online news sites.

"They're taking the original content produced by newspapers and by television broadcasters, they're not paying the broadcasters or the newspapers for and they, meaning the social media platforms, are putting it on their sites to draw viewers," explained Sen. John Kennedy of Lousiana, the lead GOP sponsor of the Senate bill.

"All my bill would say can share it but you've got to pay for it," he told Fox News.

During the last decade, publishers' ad revenue has declined by more than half, while digital platforms have reduced the share of advertising dollars shared with content creators. In 2010, Google was reportedly giving publishers 70% of the revenue from ads published on their sites. In 2020, the Association of National Advertisers estimated that publishers received only 30-40% of revenue.

Facebook, which makes most of its profits through highly targeted advertisements, made $31.4 billion in ad revenue in the United States in 2020. Google made $39.5 billion from U.S. ads. The entire newspaper industry made about a third of that.

Digital platforms have pushed back against the collective negotiation scheme arguing that they already provide billions of dollars in ad revenue and billions of clicks for news outlets. In a recent blog post, Google warned that a requirement to pay publishers for showing links would inhibit the ability to browse the internet and "fundamentally break the way the open web works."

Critics have also taken issue with the idea that the Journalism Competition and Preservation Act would give newspapers and publishers a new lease on life by giving them a larger share of digital advertising revenue.

Katharine Trendacost and Danny O'Brien at the digital civil liberties group the Electronic Frontier Foundation acknowledged the "catastrophic" effects Google and Facebook have had on news organizations' online ad revenue.

"Unfortunately, giving news media an antitrust exemption to bargain as a group with Facebook and Google will not be the time machine that brings news media back to where it was," they wrote. Instead of bringing back the outlets that have closed or providing opportunities for new entrants, they argue the antitrust exemption would further consolidate the media landscape around a few large players.

Adam Kovacevich, the former head of public policy at Google, tweeted that news publishers were making a power grab and "trying to get Congress to give them cartel power." The JCPA antitrust exemption would apply to all news organizations, print, digital, radio and TV, but lawmakers said it was written to prevent any single media interest from deriving specific benefits over competitors.

The attacks on the power of big media miss the point, according to Chavern. "While there are a lot of political fireworks that get thrown around about big media, it's a false equivalency with the influence of Big Tech," he noted. "It also totally underplays the role of reliable journalism in keeping society together."

Advocates have worried about the crisis in journalism coinciding with the rise of misinformation or fake news.

The news blackout in Australia illustrates what the digital ecosystem could look like without real journalism. For a week, rumors, fake news and conspiracy theories proliferated on the platform while Australians could not share links to credible news content. Facebook also temporarily blocked communications from government agencies about COVID-19 and natural disasters.

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The counterweight of professional news is often overlooked in discussions about the value of news organizations on platforms like Google and Facebook. "They make quality journalism available online in part because it's an answer to the garbage they have," Chavern said. "Instead of fighting with us, why don't they embrace us and understand that our content is a partial answer to one of their biggest problems."