The Journalism Competition and Preservation Act (JCPA) resurfaced—albeit briefly—in the headlines this month. According to news reports, Senators Chuck Schumer and Mitch McConnell planned to add the proposal to the National Defense Authorization Act. Inclusion in this bill, which lawmakers must approve by year-end, would have ensured the JCPA’s passage. Fortunately, this did not happen, but it is worth highlighting why this so-called lifeline for small-town newspapers poses significant risks to the economy.
The JCPA is a “link tax” akin to that enacted in Australia. In 2021, the Australian Parliament passed the News Media and Digital Platforms Mandatory Bargaining Code, which required online platforms (namely Google and Facebook) to pay media companies for linking to their news stories. The bill’s sponsor, Senator Amy Klobuchar, claims the JCPA will ensure “news organizations are able to negotiate on a level playing field with the online platforms that have come to dominate news distribution and digital advertising.” But a wide coalition of nonprofits has called the measure “an ill-advised antitrust exemption for publishers and broadcasters.”
American law should not mandate these forced negotiations since they amount to nothing more than a redistribution of rents: moving profits from the disfavored tech giants into the hands of news conglomerates. In other words, it is “solving” the Big Tech monopoly problem by enabling government-sanctioned cartels to collude—all without running afoul of antitrust laws.
This week, a Meta spokesperson warned that it would be “forced to consider removing news” from its platforms should Congress enact the JCPA. These comments are believable, especially in light of the company’s recent layoffs and spiraling stock prices. Meta’s current financial woes raise an important question: why is a company that is struggling to remain innovative and profitable being treated by Congress as a monopoly?
Perhaps because lawmakers define “monopolies” differently than conventional economic thinking. To them, the perception of monopoly power is enough justification for antitrust laws to be overhauled and rewritten. The JCPA, like its 1970s counterpart, is primarily concerned with politics rather than issues in the newspaper industry or even competition at large. Political favoritism, untethered from an actual analysis of misconduct or consumer harm, isn’t enough to warrant the bill’s passage.