Small Media, Big Tech, and the “Partiality” Imperative
It has been about two years since Australia enacted its much-disputed News Media Bargaining Code (NMBC) legislation. That new dispensation Down Under requires hegemonic Big Tech platforms to remunerate local Aussie media outlets, in straightforward enough fashion, for the right to post and disseminate an outlet’s substantive content on a technology platform. The motivating idea was, and remains, the righting of a power imbalance between traditional publishers and what the NMBC refers to as “digital platform companies” (and what, in the U.S., Section 230 of the 1996 Communications Decency Act refers to as “interactive computer services”).
Similar draft legislation that failed to pass the U.S. Congress in 2022, dubbed the Journalism Competition and Preservation Act (JCPA), would effectively grant publishers and journalistic content creators greater collective bargaining power with which to negotiate with oligopolistic internet companies for a share of digital advertising revenue. The JCPA, then, is in essence a slightly watered-down legislative cousin of the NMBC; the NMBC mandates Big Tech to negotiate deals with publishers in a more hands-on fashion, whereas the JCPA grants publishers an antitrust exemption for purposes of pursuing collective bargaining. Under both the NMBC and JCPA, binding arbitration is available as a negotiating back-up.
The JCPA is a fine piece of legislation. It is worthy of conservative support, and the new Republican-held House of Representatives would be wise to eschew the invariable teeth-gnashing of the GOP’s donor wing and give the bill another look.
But the JCPA is, candidly, a fairly marginal remedy designed to palliate a much more penetrating and debilitating societal woe: Big Tech’s unprecedented power over our commerce, speech, social interactions, and general daily life. While the JPCA represents a suitable starting point to begin to rein in Big Tech power, then, additional public policy solutions are also needed. Indeed, the most interesting aspect of the JCPA debate is perhaps not its concrete policy ramifications (favorable though those may be), but its more theoretical utility as an instrument to help habituate sympathetic lawmakers into assessing economic statecraft through a less fanciful and more realistic analytical lens of “partiality.”
Evaluating the NMBC
Much sound and fury accompanied Australia’s initial policy roll-out and subsequent ratification of the NMBC. But true to Shakespeare, the sound and fury signified nothing. Facebook and Google vociferously opposed the ratification of the NMBC, with the former going so far as to threaten to cease distributing news articles in Australia (a tactic the company redeployed during the JCPA debate in the U.S.). Those turned out to be empty bluffs; neither company notably altered its Australia-specific services offered in the aftermath of the NMBC. Overall, the financial effect thus far has been well over AU$200 million remitted from Facebook and Google to Australian news publishers, since the NMBC took effect.
The NMBC’s breadth, moreover, is staggering: Facebook and Google have reached deals with publishers representing an estimated 90-plus percent of all Australian journalists. A formal Australian government review of the effects of the law’s first year, published in November, found that the NMBC directly led to more than thirty total commercial agreements between publishers and either Facebook or Google. Crucially, these agreements represent not just Rupert Murdoch aligned conglomerates, but also smaller publishers; specifically, the NMBC provides an exemption permitting collective bargaining for any outlet with annual revenue of less than $10 million (USD).
The clear ex ante takeaway is that more investment dollars and more human capital talent alike will be deployed in Australian media, moving forward. Indeed, the Australian government’s November report makes this explicit: “At least some of the agreements have enabled news businesses to, in particular, employ additional journalists and make other valuable investments to assist their operations.” As for the digital advertising monopolists, those sprawling multinationals Facebook and Google—well, they are doing just fine. (To be more precise, some of the co-called “FAANG” companies have endured a difficult business stretch over the past year, but there is no reason to blame the NMBC; France even passed a similar law to the NMBC back in 2019, well before the post-Covid onset of the “FAANG” financial woes.) Overall, the NMBC has been so transparently successful that Aussie neighbor New Zealand is now poised to follow suit.
The JCPA, if enacted into law in the U.S., would operate similarly to the NMBC in Australia. The bill would provide an express antitrust carve-out, permitting traditional publishers—many of whose business models have infamously been decimated in the Digital Age, especially with the onset of contemporary social media—the ability to collectively bargain with Facebook and Google for a slice of their digital advertising revenue. In its most recent iteration from the tail end of the most recent Congress, the JCPA—thanks to Sen. Ted Cruz (R-TX)—would limit publishers’ antitrust exemption solely to bargaining over pricing, and would explicitly exclude any collective bargaining agreement terms pertaining to content moderation. For conservatives (properly) still concerned about Big Tech censorship and algorithmic chicanery even with Elon Musk at the helm of Twitter, that is an important point of clarification.
Facebook is yet again threatening to extricate itself from the news dissemination business if the JCPA passes into law, but the world has already seen this bluff unfold in real-time; after a brief shut-down, Facebook quickly returned to the news business in Australia following the enactment of the NMBC and participated in negotiations with Australian publishers in reasonably good faith. Google, which had similarly claimed the NMBC might “break” its search engine in Australia, has similarly steered the corporate course. It is thus safe to simply ignore these multinationals’ wailing this time around, when it comes to the JCPA; they aren’t going anywhere, and they will not be changing any of their relevant practices.
Some, such as the Google-funded libertarians at R Street Institute, have been suggesting that the JCPA might only help “big media conglomerates” and do nothing to help smaller and local media outlets—the clearest financial victims of Big Tech’s digital advertising depredations. This is pure disinformation, perhaps even deliberate deceit; the JCPA antitrust safe harbor, by its own explicit terms, only includes publishers with 1,500 employees or fewer. Thus, the blueblood legacy press and corporate media, such as ABC, NBC, CBS, the New York Times, and the Washington Post, are specifically excluded from the statutory ambit of the antitrust safe harbor. On the flip side, smaller conservative media outlets such as Newsmax, Salem Media Group, the Washington Examiner, and the Daily Caller have all publicly announced their support for the JCPA.
The intent and effect of the JCPA is to ensure that small publishers and those publishers customarily discriminated against by Big Tech—translation: right-leaning media outlets—can negotiate fair advertising deals for the dissemination of their content. The JCPA, much like the NMBC, is an attempt to partially restore the pre-social media status quo ante, before Facebook and Google successfully manipulated the digital advertising space, acquired monopolist status, and devastated local news outlets across the country. The ultimate beneficiaries of the JCPA’s successful passage would be small-town America—to wit, the small-town media consumers of a partially revived local news industry.
The JCPA is a sound statute, worthy of support and enactment into law. But beneficial though the JCPA may be, it is important to emphasize that it is merely an incremental statute that will marginally ameliorate the distorted status quo, seeking to restore a modicum of balance to a wildly unbalanced digital advertising space. The JCPA would have little bearing on broader societal issues pertaining to digital technologists’ sweeping assault on our daily economic livelihoods and the systemic curtailment of our most fundamental twenty-first-century digital civil rights, platform access and online speech. To meaningfully move the ball forward and circumscribe the astounding scope of Big Tech’s reach, stricter prophylactic regulation pertaining to algorithmic manipulation, content moderation, and viewpoint discrimination is necessary.
The obvious legal paradigm, as I and many others have argued, is the common carrier framework. Applying common carriage to the Big Tech platforms—“interactive computer services,” per Section 230—would solve many, perhaps most, of our Big Tech woes. Indeed, sprawling, industry-wide common carriage would probably even go a long way toward remedying some of the structural inequities in the digital advertising space, thus rendering the JCPA itself at least partially superfluous.
True industry-wide common carrier regulation for all “interactive computer services” would likely have to happen at the federal level, via either fresh congressional legislation or simple Title II regulatory diktat. But in the interim, the best short-term path forward is represented by state-level legislation such as Texas’s H.B. 20 viewpoint-nondiscrimination law, upheld last September by the U.S. Court of Appeals for the Fifth Circuit in the case of NetChoice v. Paxton. The states may properly use their police powers to directly impose such nondiscrimination requirements on private enterprises operating within their borders; indeed, as Professor Philip Hamburger of Columbia Law School has suggested, such direct statutory requirements may be conceptually viewed as the common carrier regulatory framework’s correlative “sticks” for the “carrot” of sweeping Section 230 legal immunity.
Section 230 itself, of course, is also in need of both statutory reform and a proper judicial reinterpretation. Nor should we give up on antitrust, as a remedy for rapacious technologists who have simply amassed far too much corporate power; for traditional monopolists such as Amazon and Google, good ol’-fashioned trust-busting likely is our best approach.
But common carrier regulation, previously floated by no less a conservative legal titan than Justice Clarence Thomas himself in the April 2021 case of Biden v. Knight First Amendment Institute, is the closest thing we have to a near-panacea for our digital enslavement via the whip of Big Tech. It would behoove policymakers to focus less on small-ball legislation, such as the JCPA and other incremental bills introduced last Congress by a band of happy anti-Big Tech warriors led by Rep. Ken Buck (R-CO), and more on the seismic paradigm shift that is common carriage.
The Partiality Trade-Off
Given the outsize role these platforms play in our contemporary lives and how indispensable they have become to countless Americans’ economic livelihoods, it simply defies common sense that “interactive computer services” are not currently regulated the same way that telecom companies, for example, are. Your phone company cannot discriminate against you, or charge you more, based on the substantive content of your oral communications; nor, for that matter, should Big Tech be able to discriminate against you based on what you post online. When it comes to digital advertising, the particular concern of the JCPA, this “net neutrality”-style regulatory approach would prevent the Big Tech oligarchs from treating conservative media outlets less favorably than they treat Regime-approved Pravda. That is no small victory.
But the single most important aspect of the NMBC/JCPA debate is less about the specific letter of the law(s) in question and more about the importance of the very questions that the debate presents, in terms of political statecraft, the ineluctable reality of legislative trade-offs, and the wielding of just political authority to promote the common good.
The right-liberal would look askance at this entire problem; indeed, he would be unlikely to consider the problem here much of a “problem” at all. Just let the economic chips fall where they may, the argument goes. Any guardrails or other deliberate policymaker thumb on the scale would evince Hayek’s “fatal conceit” and just gum up the works, after all; far better to just sit back and do nothing at all. Oren Cass calls this mentality “let the market rip,” and here the predictable result would be the perpetuation of the regnant status quo: the engorgement of Big Tech, the further entrenchment of Facebook and Google’s digital advertising duopoly, and the further decimation of smaller and more local media publishers.
But the implicit argument of the JCPA is that the policymaker does have a role to play in making such assessments as, for instance, weighing whether the distribution of resources between small-time publishers and Big Tech titans is, in the year 2023, either fair as an ex post matter or likely to incentivize sound outcomes as an ex ante matter. The argument JCPA proponents are advancing, whether they realize it or not, is that economic statecraft is an inextricable component of broader political statecraft for the simple reason that our economy will always be “partial,” as my Newsweek Opinion colleague Philip Jeffery recently argued at Public Discourse. True “neutrality,” in other words, is here, there, and everywhere a lie. The “partiality” trade-off between Big Tech and Small Media is reflective of the notion that everything in statecraft amounts to a trade-off, and that trade-offs necessarily entail the rendering of value judgments.
Ours is not an anarcho-libertarian “night watchman state”; there are governing rules for every institution and every instrumentality of daily life. The relevant tasks for policymakers is to assess those rules’ soundness, from both an ex post and ex ante perspective, and with a view to the common good. In the context of the JCPA debate, that militates in favor of targeted policy measures to help revive America’s moribund local news industry—the vitality of which naturally aids a polity’s ability to secure the republic from one generation to the next—and curtail the discriminatory power of the already-far-too-powerful social media platforms that in many instances are affirmatively destructive to our fraying social fabric. In short, a healthy republic should more highly value a robust, thriving small and local media industry than the financial vagaries of multinational technologists. In this case, the public policy analysis actually is that simple.
From this perspective, the JCPA debate is, however unintuitive it may seem, conceptually reflective of the industrial policy debate. There, just as here, policy advocates reject the illusion of “neutrality” and the siren song of “let the market rip,” arguing instead for a concerted economic “partiality” that manifestly favors some things (e.g., domestic manufacturing production) over others (e.g., service-sector consumption). Perhaps, if we are really lucky, Congress passing the JCPA into law and rendering an implicit value judgment about the imperative to restore smaller and local media outlets could produce some fortuitous spillover effects: maybe a revival of domestic manufacturing could be next in line for a beneficent legislative “partiality” only made possible by genuine economic statecraft oriented toward the common good. Wouldn’t that be something?