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September 2, 2022updated 07 Oct 2022 7:14am

The updated Journalism Competition and Preservation Act (JCPA) bill, explained

By Bron Maher

The latest version of the United States bill to force Google and Facebook to pay for news is due to be voted on by a Senate committee next week.

The Journalism Competition and Preservation Act (JCPA), sponsored by Democratic Senator Amy Klobuchar (pictured), would effectively force the technology giants to strike cash-for-content deals with news publishers across the US.

The American journalism industry has lobbied for such legislation over several years. Australia passed its News Media Bargaining Code into law in 2021, while the UK and Canada are planning similar legislation.

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A recently revised version of America’s JCPA includes changes to which publishers are eligible to bargain and introduces protections aimed at preventing tech companies from retaliating against news providers.

Below, Press Gazette rounds up what the new edition of the bill proposes, what’s changed, and what its prospects are for becoming law.

What does the JCPA do, and what’s changed in the updated version?

The JCPA allows publishers to band together as a “joint negotiating entity” (JNE), which can bargain with tech platforms. The platforms are required by the JCPA to negotiate with the JNEs, lest they face civil suits from the publishers.

The bill also protects publishers in a JNE from antitrust laws, which otherwise prohibit competing businesses from cooperating to set prices. The previous version of the JCPA protected JNEs from antitrust legislation for four years; the revised version extends this protection so it lasts eight years after the JCPA’s passage into law.

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Asked about that change, economist Hal Singer – who has previously appeared before the Senate arguing in favour of the JCPA – told Press Gazette: “When you’re trying to combat a power imbalance leading to the underpayment to news publishers, eight years of collective bargaining is certainly better than four.

“An economist might choose a longer period, as I doubt the power imbalance will be eradicated in eight years – that is, I believe Google‘s and Facebook‘s power over search and social media, respectively, is enduring. But I understand the politics.”

Who will qualify to join a JNE?

Under the updated JCPA, publications have to meet the following requirements to be able to join a JNE and gain protection from antitrust laws:

  • Employ fewer than 1,500 full-time staff
  • Generate revenue from editorial work of at least $100,000 annually
  • Have a transparent correction process
  • Update content at least weekly
  • Have at least 25% of editorial content be “topics of current local, national or international public interest”
  • Primarily serve a US audience
  • Not be owned by a foreign government
  • Not be owned by a terrorist organisation.

The JCPA requires each JNE to be composed of at least two publishers and requires a self-crafted set of rules and procedures. Once it begins to form, other publishers have a 60-day period in which to join – though more can join after that window, subject to a majority vote within the JNE. If a publisher chooses to leave the JNE, they cannot rejoin it.

The requirement that JNE members have fewer than 1,500 full-time staff was not in previous versions of the JCPA. It means that The New York Times, The Washington Post and The Wall Street Journal won’t be able to negotiate with big tech using the law.

In February Press Gazette reported how Republican Mike Lee, ranking member on the Senate Subcommittee on Competition Policy, Antitrust and Consumer Rights, had attacked the earlier version of the JCPA. He said it “would do far more to help the New York Times, and far more to help the Washington Post, than it would be a benefit for local journalism in Salt Lake City or in Minneapolis”.

Danielle Coffey, executive vice president and general counsel for the News Media Alliance (which has helped design the bill), told Press Gazette the new 1,500 figure, and the exclusion of the Times and Post, wasn’t designed to placate Republicans. “There was a lot of concern that this was going to be a windfall for the large national [publishers].”

Coffey said the lead sponsors of the bill “thought it would be more aligned with the intent of the bill” to exclude the country’s three biggest newspapers.

“But yeah, incidentally, it will be more tolerable now for Republicans, but that wasn’t necessarily the intent of the cap.”

Singer told Press Gazette: “I would have preferred extending the protections to the largest publishers. However large they might seem relative to other publishers, they are still atomistic compared to Google and Facebook…

“We don’t exclude LeBron James from the union because he might not benefit as much from the union; he is included in the union because including LeBron lifts up all the lesser-known players. But again, I understand the politics. We can’t allow perfection to stand in the way of the good.”

Technology blog Techdirt suggested last month that the 1,500 figure may be counterproductive: “This bill basically says ‘buy up large newspapers and cut them to under 1,500 employees’.”

The NMA rejected that claim, arguing that besides the three already-excluded newsbrands, “no newspaper in America comes close to 1,500 employees” and noting the JCPA “requires payments be tied to how many journalists you have”.

Which tech platforms would be subject to the JCPA?

For a platform to be eligible for mediation, it needs to have, at any point in the 12 months prior to a JNE notifying them of their intent to bargain:

  • Had at least 50m US-based monthly active users and;
  • Been controlled by a party with US annual sales or market capitalisation above $550bn or;
  • Had at least one billion monthly active users around the world.

Meta’s recent stock market troubles have reduced its market capitalisation to below $500bn, but the Facebook parent remains within the bill’s scope because of the billion monthly users stipulation. Apple, Microsoft, Google and Amazon could also be eligible for arbitration.

How does negotiation and arbitration work under the JCPA?

Once publishers have formed a joint negotiating entity, they will have to notify their chosen platform that they intend to negotiate under the JCPA. This sets a legal clock ticking and a deal must be struck within 270 days.

The platform has 30 days from when it is notified to acknowledge the bid. At any point following that initial notification, publishers within the JNE can begin collectively restricting the platform’s access to their content.

Following the acknowledgement, the platform and the JNE have 180 days to negotiate a deal for access to the publishers’ content. If no agreement is reached in that period, the JNE can initiate “final offer arbitration”.

Final offer arbitration – often referred to by analysts as “baseball arbitration” – sees each side make an offer that will then be weighed by a panel of arbitrators.

Under the JCPA, that panel will be composed of three people with experience mediating or arbitrating disputes relating to digital journalism. Costs for the arbitration will be shared equally between the platform and the JNE, and during the process either side can make reasonable requests to see any relevant, non-privileged documents or information which might inform those offers. That data and information should be turned over within 30 days of the request.

The JCPA instructs the panel to choose one of the two offers within 60 days of the arbitration beginning. Within 90 days of that decision, the affected platform should start paying the JNE’s publishers through a claims administrator, and that administrator should disburse the funds no more than 60 days after they are received.

In theory, it should take no longer than 420 days, or 14 months, from the platform being notified to publishers in the JNE getting paid (assuming the arbitrators don’t choose a platform offer that proposes to pay no money at all).

Whatever award is given, the bill stipulates that 65% of the funds be distributed among the publishers based on how much each spends on employing journalists.

Is it likely to pass into law? If so, when?

Some news industry sources spoken to by Press Gazette remain privately pessimistic that the JCPA will pass into law any time soon – especially if the Republican Party wins control of the House of Representatives in the midterm elections later this year.

But the News Media Alliance remains hopeful. Coffey told Press Gazette: “The plan is to markup the bill – and all that means is that it’s going to be voted [on] by the Senate judiciary committee – on September 8, so next Thursday. And then the House [of Representatives] will follow. And then it will go to the floor. And I believe that will happen after the [midterm] election.”

Despite that, Coffey said: “I believe what gives us a fighting chance of passage is that it’s bipartisan. Having enough votes on both sides means that it’s something that can pass more easily than other measures.”

Press Gazette is hosting the Future of Media Technology Conference. For more information, visit NSMG.live

Picture: Chris Wattie/Reuters

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