WASHINGTON (CN) — Even as they drive traditional media sources to the brink of extinction, internet giants like Google and Facebook do lucrative business by being the ones that draw news-hungry consumers.
The Senate Judiciary Committee's antitrust panel met Wednesday to consider a law that would give news outlets a seat at the negotiating table.
Democratic Senator Amy Klobuchar sponsored the Journalism Competition and Preservation Act, saying the legislation is critical to give outlets power over their own content and support the journalism industry as a whole.
"They are raking in ad dollars while taking news content, feeding it to their users and refusing to offer fair compensation," Klobuchar said of companies like Google and Facebook. "And they're making money on consumers backs by using the content produced by news outlets to suck up as much data about each reader as they can. So, it's kind of a double whammy right there."
Jennifer Bertetto described at the hearing the struggles of her company, Trib Total Media, to rake in online revenue for the slate of Pennsylvania newspapers in its portfolio.
"At our company, about $7 million is paid out in salaries to journalists on staff," said Bertetto who is CEO and president. "To give you some sense of what we earn presently from Google, it is $144,000 a year. So, I really feel I'm starting at zero."
Through the restructuring of its business, closing and selling of local papers, and laying off employees, Trib Total Media at the end of the day finds itself catering to readers who find news through curated online platforms. Without these consumers actually entering the websites of news organizations themselves, the outlets don't get the online traffic or revenue that would come with visit to their site.
"Tech platforms have become gatekeepers controlling access to news, and my company's original content on their sites," Bertetto said. "Sadly, most Americans get their news from these platforms, who are raking in record profits by simply curating content, a word that has subtly devalued the painstaking work of real reporting by journalists."
Klobuchar said her bill would allow outlets of all sizes to collectively bargain with technology companies, helping journalism organizations get a piece of the digital-revenue pie.
Other countries are increasingly turning to similar antitrust strategies to give news outlets and publishers more control over their reporting and content. After Australia passed legislation in this vein, Google and Facebook threatened to cease the use of some of their products and services in the country. They later relented, striking licensing deals with publishers.
Klobuchar's bill was introduced around that time and has received some bipartisan support, with Representative Ken Buck of Colorado and Senator John Kennedy of Louisiana, both Republicans, co-sponsoring the legislation.
The legislation is still going through revisions, however, amid criticism that there is no law that can singlehandedly save the journalism industry.
Daniel Francis, a lecturer at Harvard and former antitrust expert at the Federal Trade Commission, likened the current publishing climate to the transition period of video stores such as Blockbuster giving way to online streaming.
"That is not to say that we look with anything other than horror and sadness at the real difficulties that competitive change brings," Francis said.
While he did not deny the pains facing the journalism industry, particularly at the local level, Francis insisted that industry-wide collective bargaining against tech companies isn't the answer.
"It's a request to dramatically expand profit rights on the internet, and then to allow that property right to be sold by a new national news cartel with major media conglomerates at the helm," Francis said.
Senator Mike Lee, a Republican from Utah, also spoke about the cartel concern. He argued that, rather than promote a competitive media environment, negotiations would drown out local news outlets.
"We're not talking about the the idea that journalism itself can't be economically viable in the absence of it," Lee said.
Hal Singer, an antitrust expert and managing director with Econ One Research, pushed back such alarmists, saying that a free market strategy where local outlets go under is the best approach.
Singer asserted that the power of the coalition would come from all participating organizations being a united front.
"It would permit a coalition of news publishers to form a joint negotiating entity to alleviate the power imbalance. No news publisher would ever unilaterally shut down access to Google and Facebook, to do so would be suicidal," Singer said.
Senator Richard Blumenthal, a Democrat from Connecticut, said he supported the bill, but noted that several problems, including the prevalence of hedge funds and private equity firms buying and gutting local newspapers, pose threats beyond those addressed in the bill.
"I'm a supporter of this measure. But I wonder, are we too late? Can we still rescue American journalism?" Blumenthal asked.
While Bertetto said passing Klobuchar's bill would not be the magic pill to fix the future of the industry, she said it could give power, and likely money, her newsrooms desperately need.
"I'm presently making decisions every single day, about which communities we can afford to have a reporter in on a full-time basis, and where we have to decide to have a part-time report or no reporter at all," Bertetto said.
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