News media bargaining bill in US

What’s in today’s article?

• Why in News?
• News Summary

Why in News?

• A legislative push in the United States, aimed at giving news organizations greater power to negotiate fees for the content shared on social media sites like Facebook, has run into rough weather.
• Meta (formerly Facebook Inc.) has threatened to remove all news content from its platform if the measure is passed.
• The proposal has also come under attack from other groups representing Internet giants like Amazon and Google.

News Summary

Proposed law

• The draft legislation is known as the Journalism Competition and Preservation Act (JCPA) of 2022.
• It would allow publishers greater powers to collectively bargain with companies like Facebook and Google for a larger share of ad revenue.
• The publishers have long complained of dwindling revenues as social media platforms cornered a large chunk of online advertisements.

Opposition from internet giants

• Meta has argued that contrary to publishers’ claims, platforms like Facebook actually help them with the distribution.
• As per them, the current legislation fails to recognize the key fact: publishers and broadcasters put their content on our platform themselves because it benefits their bottom line.
• No company should be forced to pay for content users don’t want to see and that’s not a meaningful source of revenue.
• These internet companies contend that the government is creating a cartel-like entity which requires one private company to subsidize other private entities.

Legislation from other countries

• Australia and France have enacted similar laws, following which companies like Meta and Google have agreed to pay publishers in those countries.
• Others like Canada and New Zealand are currently deliberating similar legislation.

The Australian law that compelled social media companies to pay publishers

• Australia had introduced a similar law in 2021, called the News Media Bargaining Code.
• The code aims to address the bargaining power imbalance between news media businesses and digital platforms and ensure that businesses are remunerated for the content they generate.
• In response to this code, the social media company had temporarily restricted news content from its news feed in the country.
• However, later these companies accepted the legislation and more than 30 commercial agreements had been signed between Australian news outlets and either Meta or Google.
  • Australian government review of the law’s first year in effect said the law had been a success.
  • As per report, the law enabled news businesses to employ additional journalists and make other valuable investments to assist their operations.

Why countries all over the world are bringing such law?

• A study carried on Australian market estimated that about 3,000 journalism jobs were lost in Australia in the past 10 years.
• This is due to the fact that the traditional media companies pay advertising revenue to Google and Facebook which paid nothing in return for news content.
  • It has been estimated that for every 100 Australian Dollar spent on online ads in Australia, excluding matrimonial and local advertisements, nearly a third goes to Google and Facebook.
• Hence, a need was felt to bring legislation to ensure increased competition, increased consumer protection and a sustainable media landscape.

Impact of such proposals

• The enacted proposals, by different countries have forced Google to launch News Showcase.
• Launched in October 2020, News Showcase is a global vehicle to pay news publishers for their content online.
• Under the program, Google pays participating publishers to “curate quality journalism for an improved online news experience that benefits readers and publishers”.
• Google’s News Showcase is available in a number of countries, including India.
  • In India, 30 news publishers including national, regional and local news organizations are part of it.

Q1) Which country is the first to make Facebook and Google pay its media outlets for news?

Australia was the first country to pass a law to make Google and Facebook pay for news content on their platforms.

Q2) What is news Showcase?

To help readers discover new content, Google News Showcase offers no-charge access to select paywalled articles on a participating publisher’s site that would otherwise only be available to subscribers.

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