Legislation and Congressional inquiries shape U.S. media, Big Tech relationship

By L. Carol Christopher

INMA

Pleasant Hill, California, USA

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News medias approach to reining in Big Tech in the United States involves litigation, legislation, and Congressional inquiry.

We tackled litigation in a post yesterday. So lets dig into the latter two now.

Legislation

In a December CNBC article, Paul Gallant, managing director of Cowen’s Washington Research Group, said, “The likely Republican takeover next fall means 2022 is do or die for tech antitrust legislation.” 

As of November, at least 16 federal bills addressing news publishing and journalism were in various stages of making their way through the legislative machinery of Congress, while seven states have recently adopted or are currently considering bills related to the local journalism crisis or creating committees to improve media literacy. 

There are also broadly written pieces of legislation that address the general antitrust-Big Tech milieu, such as bills to prevent self-preferencing circulating in the House and Senate — The American Innovation and Choice Online Act (which would prohibit dominant online platforms from engaging in discriminatory behaviour). 

As of November, at least 16 federal bills addressing news publishing and journalism were in various stages of making their way through the U.S. Congress.
As of November, at least 16 federal bills addressing news publishing and journalism were in various stages of making their way through the U.S. Congress.

But there are also “niche” bills: Two pieces of federal legislation have been written to specifically address the effects of Big Tech market dominance on news media entities: 

• The Local Journalism Sustainability Act (H.R. 3940S.2434), introduced Summer, 2021. As the Alliance describes it, the act “allows individual and business taxpayers certain tax credits for the support of local newspapers and media. Specifically, individual taxpayers may claim an income tax credit up to US$250 for a local newspaper subscription. [It] also allows local newspaper employers a payroll tax credit for wages paid to an employee for service as a journalist and certain small businesses a tax credit for local newspaper and media advertising expenses.” 

In October, the plan was for the government to subsidise half of salaries up to US$50,000 the first year and 30% for four subsequent  years, according to Poynter, which estimated the total benefit to local news would be around US$1 billion. By November, it was a five-year credit providing up to US$25,000 in credits in year one and up to US$15,000 in years two through five, according to Editor & Publisher. 

This report from the Nieman Lab spells out the details and differences between the Senate and House versions of the bill, and also points out that Congress has previously subsidised the U.S. news industry in the form of postal subsidies and public notices. 

This bill was referred to the House Committee on Ways and Means in June and passed with bipartisan support on November 19. Senatorial sponsorship is limited to Democrats, and it faces a “stiff challenge,” according to The New York Times. The bill has been in and out of President Joseph Biden’s Build Back Better Framework, which itself has been struggling because of inter- and intra-party wrangling but is, according to The Washington Post, “back on the Senate stage.”

• The bipartisan Journalism Competition and Preservation Act (H.R. 1735S.673), was first introduced in the House of Representatives in 2018 in response to pressure from the Alliance, Axios reported in 2020. It creates a four-year safe harbour from antitrust laws for print or digital news and allows companies to collectively negotiate with online content distributors regarding the terms on which the news companies’ content may be distributed by online content distributors. 

The bill, which The Hill called “the more meaningful legislative approach,” said it “should provide mechanisms for earning more money rather than just reducing personnel costs for a fixed period of time.”  

Amendments are a distinct possibility, since the bill was originally introduced before Australia’s News Media Bargaining Code was passed. There are lessons to be learned from the international community. But, one source we spoke to said the two houses of Congress will have to move in the next six months before re-election and campaign issues usurp attention from everything else.

Congressional inquiry and investigation

In its inquiries, the U.S. Congress has taken heed of both the Australian (based on anti-trust) and the EU (based on copyright) models in pursuing a more equitable environment for competition.

The U.S. Congressional inquiries look at both the Australian (antitrust) and the EU (copyright) models of requiring Big Tech to pay for content.
The U.S. Congressional inquiries look at both the Australian (antitrust) and the EU (copyright) models of requiring Big Tech to pay for content.

In October, the Congressional Subcommittee on Antitrust, Commercial, and Administrative Law of the Committee on the Judiciary issued a 450-page report, Investigation of Competition in Digital Markets: Majority Staff Report and Recommendations.” (The publisher litigation mentioned above refers specifically to this report, according to Geekwire.) It is based on seven anti-trust hearings held over 16 months, and provides 14 recommendations in three categories:

  1. Restoring competition in the digital economy, with specific mention of creating a “safe harbour” for news publishers in order “to safeguard a free and diverse press.”
  2. Strengthening antitrust laws.
  3. Reviving antitrust enforcement. 

In May, Senators Thom Tillis and Patrick Leahy addressed a letter to the Copyright Office, a part of the Library of Congress, seeking its “expertise and clear guidance” and requesting that it “evaluate current copyright protections for publishers,” according to a notice and request for public comment on a Publishers’ Protections Study, published in the Federal Register in October.

“Additionally,” the letter said, “such a study should analyse what the appropriate scope of such a right should be and how that would coincide with existing rights such as those of underlying writers or visual artists as well as any existing rights held by publishers,” and should be provided no later than May 3, 2022. The letter explicitly asked for an assessment of “the viability of adding specific protections to U.S. copyright law similar to those now being implemented in Europe.” 

On December 9, the Office held a roundtable, consisting of three panels, regarding what became its Study on Ancillary Copyright Protections for PublishersAccording to the Association of Research Libraries, there were three key takeaways:

  1. There is agreement that high-quality journalism — particularly local journalism — must be sustained, but there is no consensus on a solution.
  2. The U.S. copyright regime prioritises creativity and dissemination of knowledge. This stands in contrast with European copyright law, which is meant to protect investments, the Association wrote.
  3. Laws implemented in the EU and Australia must be considered in the U.S. context.

The Office issued a second notice in November seeking further comments by January 5. 

In a January press release, the Alliance described the comments that it submitted in November and January in response to the requests. The November submission was 178 pages, and asked the Copyright Office to:

  1. Conclude that the reproduction and public display of news content by aggregators is infringing.
  2. Implement changes to registration practices that would help protect press publishers.
  3. Look to Article 15 of the European Union (EU) Directive on Copyright in the Digital Single Market (the “DSM Directive) to help ensure that American publishers benefit from and receive compensation for the consumption of their content in the EU, by adopting strong national treatment provisions in any bilateral agreements with the EU.
  4. Endorse the Journalism Competition and Preservation Act of 2021 (JCPA), intended to help address the market abuse of dominant online platforms.

In its January submission, it rebutted comments from other groups alleging that “the use of news content by online aggregators is fair use or not infringing.” It said that such “substantially inaccurate statements … have the effect of obscuring the truth in an effort to circumvent long-established U.S. copyright jurisprudence, as well as case-by-case fair use analysis,” in addition to misrepresenting the nature and extent of the aggregators’ use of news content, according to an Alliance press release. 

The trade group also made four recommendations to complement its original comments, “in order to further improve the sustainability of high-quality journalism, including:

  1. Amending the Copyright Office’s policies and documents regarding the copyrightability of “words and short phrases.”
  2. Clarifying the law around substantial takings and systematic use of news content.
  3. Studying the need for unique — “sui generis” — protections for news publishers.
  4. Studying the need for further guidance or congressional action with regards to the use of news content for artificial intelligence applications.

Conclusion 

Both the Democrats and the Republicans are concerned about Big Tech dominance and are amassing evidence to support claims of anticompetitive behaviour. Both houses of Congress returned to work on January 3 after a December vacation. Look for lots of pre-election activity on the legislative front in the next six months. Look for a possible jury trial and change of venue back to Texas in the Texas litigation. Look for a report from the Copyright Office this summer. The forces are coalescing, but it’s the Wild West here and almost anything is possible.

About L. Carol Christopher

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