It’s Time to Exempt News Organizations from Antitrust Restrictions

Consumers benefit when companies have maximum flexibility to compete and innovate.

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Congress is currently considering a bill that would allow news organizations to collectively negotiate with online-content distributors, such as Google and Facebook. If passed, the bipartisan Journalism Competition and Preservation Act would provide both small and large news organizations with a four-year safe harbor from antitrust restrictions, originally constructed to prevent “collusion” in the news industry. The law is a positive and necessary step forward; in fact, such onerous antitrust restrictions should be reevaluated across America’s industries. Consumers benefit when companies have maximum flexibility to compete and innovate.

Earlier this year, Pew Research Center found that 86 percent of Americans access news, at least some of the time, digitally. Of that group, 26 percent do so at news outlets’ websites or apps, 12 percent through online search, and 11 percent via social media. It’s not entirely clear whether Google and Facebook are more indebted to news organizations for their original content or whether the platforms benefit news organizations more by driving eyeballs to news sites via links. Incidentally, the legal case for platforms being in violation of copyright law for showing links with headlines, snippets, and thumbnail photographs is unsettled, but precedent seems to indicate that the platforms are protected under fair-use rules.

Putting aside the particulars of copyright law — along with the questions of who should be paying whom and how much — freedom of association suggests that media entities should be allowed to coordinate among themselves in order to gain maximum leverage in negotiating with these tech companies. State and federal antitrust laws currently prevent such activity on the grounds that it amounts to “collusion,” but this prohibition is an artificial restraint that makes little sense, especially in the face of shrinking newsrooms and dwindling profits. Restrictions on potentially beneficial collaborations have never carried much water, but in today’s rapidly innovating media landscape, they are even less intelligible. Competitive Enterprise Institute founder Fred Smith would often remark at the goofiness of antitrust law, which allows for full mergers but treats “partial mergers,” in the form of coordination, as collusion.

Politicians and regulators have no ability to know what the optimal arrangement between news-content providers and online platforms is, but they do have every reason to keep their thumbs off the scale. A fair fight between the two sectors is all that’s required for us to have trust in the outcome of private negotiations between what needs to be relatively evenly matched parties. Lifting antitrust restrictions against news firms coordinating their efforts in order to gain leverage against the online giants would be a step in the right direction.

Read the full article at National Review.