Proposals for Tech to Pay for News Rely on Flawed Arguments

Multiple jurisdictions are considering laws that would force news aggregators like Google News and Facebook to pay news publishers for content. In Congress, California, and Canada, lawmakers are relying on faulty logic—the argument that news aggregators take advantage of publishers—in a misguided attempt to save local journalism. History shows that these measures are not likely to succeed at anything more than limiting consumers’ access to quality news content.

Forcing aggregators to pay for news is not a new idea. Belgium, Germany, Spain, France, and Australia have considered or passed similar proposals, often with immediate negative consequences, such as aggregators limiting or removing news content in those countries. This change led to decreased revenue for news publishers since aggregators drive traffic to their content. It also meant consumers had less access to news since aggregators provide easy and convenient access to content from a multitude of sources in one place.

Nevertheless, Congress is set to mark up a “tech pays” proposal, the Journalism Competition and Preservation Act (JCPA), which Sen. Amy Klobuchar (D-MN) reintroduced earlier this year. The bill would create a temporary safe harbor from antitrust laws to allow news publishers to collectively negotiate compensation with large online platforms. This special treatment relies on the same justification behind many bills that unfairly target tech companies: “They can afford it.” This is flawed logic; governments should not regulate industries based on what they can afford but instead on how to protect consumers.

Meanwhile, the California State Assembly passed this month the California Journalism Preservation Act (CJPA), and the California State Senate will vote on it next. The bill requires aggregators to pay a “journalism usage fee payment,” a percentage of the platform’s monthly advertising revenue determined via arbitration. The CJPA’s stated intention is to preserve local journalism, but the decline of local journalism predates the widespread use of online news aggregators like Google News and Facebook and is due to a number of factors.

Finally, Canada has been considering its own “tech pays” proposal, C-18, since 2021, and the Canadian Senate Committee on Transport and Communications is currently considering it. It would require aggregators to enter into a bargaining process with publishers to determine “fair compensation” if there is a “significant bargaining power imbalance” between the two.

All of these bills are ostensibly designed to “level the playing field” between news aggregators and publishers but really put the government’s thumb on the scales to hurt news aggregators. And the current state of online news benefits everyone, a fact none of these bills take into account. News publishers can already opt out of sharing their content via aggregators, but they would miss out on the increased traffic that translates to increased advertising and subscription revenue.

The Internet has forced every industry to adapt to new ways of doing business, and it is not the first technology to transform how publishers disseminate news and how consumers access it. The current debate echoes arguments news publishers made in the age of radio. History proves the news industry does not need handouts or special treatment.

Lawmakers could take steps to preserve local journalism without forcing tech companies to pay, including by increasing public funding. But these “tech pays” proposals are unlikely to accomplish much beyond needlessly interfering in a business model that works for everyone to unfairly advantage one party over another.