Here's a perfect example of conflicting goals. There are three alternative ways to look at the Journalism Competition Preservation Act (JCPA) that just passed a vote in the Senate Judiciary Committee with overwhelming support (15-7), but still has miles to go before it will become enacted by both houses of Congress. Each of those alternative takes on the current version of the bill aims at a laudable goal, and is espoused by a different one of my favorite three United States Senators:
Sen. Amy Klobuchar (D-Minn.), to whom the app developer community (of which I am a member) is indebted for her tireless efforts to combat app store abuse, says the bill will "save local journalism" by "allow[ing] news organizations to jointly negotiate fair terms for access to their content by Google, Facebook, and other dominant platforms."
Her concerns over "dominant online platforms’ power over news organizations" are well-founded.
Sen. Ted Cruz (R-Tex.) celebrates his personal achievement: he secured "secured significant protections against Big Tech censorship with an amendment to the [JCPA]." That safeguard "not only protects the content of the journalists whose outlets may be negotiating with Big Tech but it critically protects the speech of journalists and smaller media outlets who don’t have a seat at the table." It is indeed "a major win for free speech and it strikes a blow against the virtual monopoly that Big Tech has to limit the information that Americans see online." This is the Section 230-centric perspective. For app developers and others interested in fair competition in technology markets, some Republicans' focus on free speech actually paves the way for legislative as well as judicial decisions that will have very positive effects and that the GOP's antitrust skeptics of yore would have been sure to fight tooth and nail.
But there is an undeniable structural issue here that anyone with a principled perspective on competition enforcement must be worried about: cartels are a serious antitrust violation, not an appropriate remedy. Senator Mike Lee (R-Utah) states it very well in a video (excerpts from his Senate speech) he embedded into the following tweet:
The Journalism Competition and Preservation Act makes publishers more dependent on Big Tech, not less. Unfortunately, the bill's lofty intentions do not outweigh its unintended consequences. pic.twitter.com/4Qtp4sciWq
— Mike Lee (@SenMikeLee) September 22, 2022
As Senator Lee reminds us, there are--except when you pass legislation like the JCPA in its current form--even criminal consequences for creating cartels. About a year ago, Qualcomm's Fabian Gonnell remarked at an automotive patent licensing conference that everyone involved in a joint licensing negotiation group (over standard-essential patent royalties) should go to jail. This blog has consistently opposed licensee negotiation groups for well over a year, and was referenced in Acer's patent infringement against Volkswagen in the Eastern District of Virginia.
That's why I find it disconcerting to read in Senator Klobuchar's press release that the JCPA in its current form would "[e]mpower eligible digital journalism providers—that is, news publishers with fewer than 1,500 exclusive full-time employees and non-network news broadcasters that engage in standard newsgathering practices—to form joint negotiation entities to collectively negotiate with a covered platform over the terms and conditions of the covered platform’s access to digital news content."
There is, of course, at least one fundamental difference between automotive licensing negotiation groups (LNGs) and what the current JCPA envisions: in the car industry, they want the big guys to form cartels, like Volkswagen, Toyota, or Ford. With the JCPA, there is at least a limitation to smaller publishers ("fewer than 1,500 exclusive full-time employees"). I've previously said that I might view a joint licensing effort by a few small IoT startups differently than a VW-Toyota-Ford cartel--but only because of the threshold (market share of 15%) that already exists under EU competition law.
To allow cartels in order to redress an alleged or actual market imbalance sets a terrible precedent. Two wrongs don't make a right--and the second wrong that you condone in order to deal with the first will haunt you in other fields.
Getting Google to pay for links is quite a challenge. After the EU's 2019 copyright reform bill, Google initially just stopped displaying snippets and linking to publishers unless they waived their rights--but they need the traffic that Google generates. The French antitrust authority then fined Google, and Google quietly gave up on its appeal.
There must be a better solution, but this is is not the place to discuss alternative approaches. Legalizing cartels is not the answer, as a matter of principle. One can have more sympathy for a small local newspaper than for Google--frankly, that's easy--but still warn against an ill-conceived approach that legalizes cartels. As does Senator Lee. Thankfully so.
