Note to Congress: Antitrust Exemptions Could Harm Publishers and Consumers of News

Note to Congress: Antitrust Exemptions Could Harm Publishers and Consumers of News

The top Democrat and Republican on the House antitrust subcommittee introduced the Journalism Competition and Preservation Act this week. This act would give news publishers a 48-month “safe harbor” anti-trust exemption to negotiate collectively with news platforms, such as Google and Facebook.

Previous Congresses have tried and failed to enact similar legislation, so it may not gain traction this time around, either. Still, journalism today faces real problems, so it’s worth thinking about why this legislation isn’t the answer.

Our democracy requires a vibrant Fourth Estate, as we all learned in grade school, and America’s newspaper publishers are great citizens and businesspeople. But the Internet has undermined the business model that traditionally supported that Estate. Creating a government-sanctioned cartel exempt from antitrust laws in order to protect outdated business models is not the way forward. Business models must adapt to the new reality.

Tom Lenard, a TPI senior fellow and president emeritus, has written extensively on this topic. He loves newspapers and their excellent content as much as anyone else. They publish his columns, including on this topic.

But Tom notes that the cause of publishers’ declining revenues and financial strain is the internet itself, not Facebook, Google or other companies. Even if the exempt bargaining unit created by the legislation generated additional revenue for publishers, it would not return newspaper publishers to their salad days. In fact, it could be counterproductive by reducing incentives for entrants to experiment with ways of funding news in this new era.

As an economist with practical experience in government, Tom argues that a government anti-trust exemption is not “low-regulation and pro-market,” as the legislation claims. He says that “allowing competitors to collude, which is what an antitrust exemption does, is the opposite of a pro-market solution…[and] antitrust economists and lawyers are virtually unanimous that these exemptions are bad for consumers and the economy.”

“The disruption the newspaper industry has experienced does not seem to have harmed consumers…[they] are getting a lot of news from newspapers web sites, social media, messaging apps, texts and email,” he writes. “TV is still the primary source overall, particularly for older Americans.”

As a youngster, I interned with Evans & Novak, the syndicated Chicago Sun-Times and CNN duo whose columns carried significant weight into the 90s. Back then, journalists still dealt almost exclusively in ink and paper. This dynamic duo’s office was strewn with tall piles of newspapers and clippings. Novak’s prehistoric car phone was a large plastic brick, and he sported a pencil on his ear. I loved that job.

That world doesn’t exist anymore. But if Evans & Novak’s spirited content (and they) were alive today, it would be available to consumers in many new ways and read by more people. As journalists, they’d appreciate that very much.

Great content lives on. And newspapers create the bulk of it. The root problem is that newspapers’ primary business models don’t work well in the digital world. But manipulating anti-trust laws, potentially harming consumers, and likely discouraging experimentation with new business models is never the answer.

Find Tom Lenard’s work on the topic below:
Newspapers Don’t Need Anti-Trust Immunity
Newspapers Need New Business Models, Not Permission to Collude

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