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Amy Klobuchar’s Journalism Bill Wants Bad Media Cartels

People will share this article on social media channels, which will drive traffic to the Newsmax website. More traffic on a website means more users likely to click on and consume content on that same website, driving ad revenue.

In this sense, Facebook or Twitter act as multipliers of exposure to media companies. But that is not how Sen. Amy Klobuchar sees it.

Her Journalism Competition and Preservation Act of 2021 (JCPA) claims to protect local media outlets by allowing broadcasters to band together to negotiate terms on content distribution. In essence, it would allow media firms to fix prices on something they benefit from: social media companies allowing links to be shared.

The bill exempts media companies from antitrust laws for four years, even though social media companies would continue to be affected by those laws. According to Klobuchar, this would divert profits of social media giants to those media companies that have struggled in recent decades — not least because of their inability to adapt to the online model.

Klobuchar’s bill doesn’t go quite as far as some rule-makers in Europe have been willing to go. In 2018, the European Commission (the executive arm of the EU) put forward new copyright legislation that would impose a link tax. This would require social media platforms to either pay the publisher for the use of snippets (thumbnail and short excerpt text) or not allow the link to be posted at all.

This proposal sparked wide-scale protests across Europe, arguing that it would reduce access to information, limit freedom of expression, and boost fake news. In the end, the EU watered down the proposal, and to this date, many EU member countries are dragging their feet on implementing aspects of the copyright reform.

The JCPA is a less refined argument than Europe’s copyright approach. To Amy Klobuchar and her bipartisan co-sponsors, it is simply about redistributing financial means from one economic player to another, not by means of taxation but through the creation of cartels. This would create a myriad of problems.

Exempting one economic sector from antitrust rules creates a precedent that other sectors will lobby to access. After all, if media companies can band together to fight Meta and Twitter, why can’t hotel conglomerates collude to limit the availability of Airbnb?

The government picking winners and losers never has a good ending and exposes lawmakers to undue influence. Ultimately the question may very well be: Doesn’t Amy Klobuchar seek to benefit from positive media coverage through this bill and its effects?

Those concerned about market concentration in the media realm should see this bill very critically. While some may benefit from cartels, citizens and consumers never do.

Klobuchar’s bill would also be unlikely to effectively help struggling media companies. Many platforms generate a majority of their website traffic, and so their revenue through social media clicks — thus, a link tax would need to be prohibitively high to yield results.

This could lead social media companies to simply block the sharing of links to news sites, which happened in Australia when it implemented similar rules. When Spain attempted link taxation, Google News shut down its services in the country (and only recently reopened after the EU watered down the local legislation).

The underlying premises of Klobuchar’s bill are twofold. On the one hand, she assumes the plight of companies is due to social media giants like Meta or Twitter. The fact that Facebook shut down news link sharing in Australia last year proves that the platform does not need news content to survive; media outlets need Facebook far more than Facebook needs them.

The other assumption is that the economy is static. Facebook and Twitter, unless they innovate, are unlikely to remain the most prominent players in the social media realm. They know better than anyone to what extent they can become redundant in the eyes of their users: think MySpace.

While this is something we accept for social media companies, we don’t apply the same thinking to the media space. Why shouldn’t newspapers and broadcasters be expected to adapt to the digital space in a financially sustainable way without intervention from the government?

Originally published here

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