News competition bill gets a lifeline

Lawmakers have added a measure to Congress' must-pass defense funding bill that would force Big Tech firms like Google and Meta to pay hundreds of local news outlets for their content, sources tell Axios.

Why it matters: Barring last-minute Capitol Hill maneuvering, the news-funding measure is now on track to pass after failing for years to gather enough support to become law.

• The legislation, the Journalism Competition and Preservation Act (JCPA), aims to create a lifeline for struggling local news companies.
• But opponents say the bill is a handout for traditional media companies and could force Big Tech firms to pay outlets that routinely publish misinformation.

Driving the news: A number of civil society and tech groups and others opposed to JCPA told Axios Monday that the bill would be included in the NDAA following negotiations between Senate Majority Leader Chuck Schumer (D-N.Y.) and minority leader Mitch McConnell (R-Ky.).

Be smart: Because the National Defense Authorization Act (NDAA) needs to pass by the end of the year to keep the military funded, the JCPA's inclusion would make it much more likely to become law.

• The proposal was first introduced in 2019 and was reintroduced in 2021. Even with bipartisan support, previous versions of the bill never won enough support to advance out of each house's Judiciary committee.

How it works: The JCPA requires tech firms to negotiate payout terms "in good faith" with news publishers for distributing their content. If they can't come to an agreement, the bill allows news publishers to demand third-party arbitration.

• The proposal is modeled on an Australian law that passed last year despite intense pushback from companies like Google and Facebook.
• The bill requires participation from tech firms that have at least 50 million U.S.-based users or subscribers, along with either a market capitalization of $550 billion or at least 1 billion worldwide monthly active users.
• It doesn’t cover publishers or local broadcasters employing more than 1,500 full-time employees. That means major national publications such as The New York Times, The Wall Street Journal and The Washington Post would not be eligible for payouts.
• The updated bill calls for an eight-year temporary safe harbor from antitrust laws, allowing media companies to collectively bargain with tech firms. Previous versions of the bill provided only a four-year safe harbor.

Opponents of the bill would have preferred to see almost any of several other major new tech regulations move forward in Congress instead.

• "The #JCPA won't help journalism or reduce Big Tech's monopoly power. Instead, it's effectively a handout to giant conglomerates like Alden Capital (who are literally destroying journalism) and will essentially solidify Big Tech's role in the news," tweeted Evan Greer, a director at Fight for the Future, an internet rights advocacy group.
• Tech trade groups NetChoice and the Computer and Communications Industry Association, who have been fighting all proposed tech antitrust efforts, both launched ad campaigns attacking the bill Monday. "Objective journalism is crucial to a democracy, but this legislation will promote media cartels and compel digital sites to subsidize dangerous sources of misinformation online," Matt Schruers, president of CCIA, said in a statement.

Between the lines: Meta threatened to remove news from its platform altogether if JCPA passed. It had made a similar threat when Australia introduced its bill, though it later reached a compromise.

• Although Meta has been trying to back away from distributing news anyway, the News Media Alliance, a newspaper trade association that backed the bill, called Meta's threat “undemocratic and unbecoming.” 

The big picture: Several other countries are considering similar laws.

• Canadian lawmakers are currently debating a similar bill that would force Big Tech firms to pay publishers, but would outsource the qualifying criteria to its media regulation body.
• The New Zealand government said Sunday it also plans to introduce a law that would require companies like Google and Meta to pay local news companies for their content.

The bottom line: This is the JCPA's last real chance at passage for the foreseeable future. It would be very difficult to get the bill over the finish line in a new Congress with divided chambers.

Go deeper: U.S. lawmakers debut updated news competition bill modeled after Australia