Facebook Freeloads Off Newspapers. This Plan Might Stop It

Imagine you have an app that, when downloaded, does extraordinary things in your zip code. People with this app have higher median incomes , so you find yourself richer. It lowers air pollution , so it makes your air cleaner.

It reduces partisan polarization , so your town’s elections are more pleasant affairs. Among other things, it lowers your taxes . Such an app exists, in a sense: It’s called journalism.

At scale, it delivers enormous benefits to society—as a prophylactic on government waste, by weeding out corruption, and by helping democratic communities cohere—and especially at the local level. But the app, along with its benefits, is rapidly disintegrating from American life. In the past fifteen years, the news business has collapsed at a scale almost unrivaled in American society—an economic “decimation” described as “an extinction level event.

” Between 2005 and 2021, advertising revenue for newspapers fell 80 percent , from about $50 billion to $9. 6 billion. During roughly the same period, as the US population grew substantially, the number of newspaper reporters fell by more than half , from 71,000 to 31,000 .

Regional and local news publishers are at the heart of this bloodbath, shuttering or gutting at gobsmacking rates . By 2025, the US is on pace to lose a third of the number of newspapers it had in 2005. For these news publishers, and many others, “time is running out.

” Recently, an intriguing policy experiment began that would do something to stanch the bleeding. Introduced in the House and Senate in 2019 and again this Congress, the Journalism Competition and Protection Act (JCPA) would create an antitrust exemption to allow news publishers to collectively bargain, like a union, with Big Tech. The final goal is to cajole massive platforms into paying for news—meaning, sharing revenue in exchange for the right to host news content—thus transferring hundreds of millions of dollars (or more) to regional and local news publishers.

The proposal has key backing from tech reformers , antitrust advocates , media analysts , and even some Big Tech giants like Microsoft . It’s also supported by hundreds of small news publishers , who call it a “desperately needed lifeline” that would allow small news publishers to “ level the playing field . ” It’s also bipartisan, with a slate of Democrat and Republican cosponsors in both chambers of Congress .

Last week, the legislation surprised observers by clearing a key hurdle in the Senate , moving it closer to what congressional aides hope is a window for passage during the lame duck session after this fall’s midterms. But JCPA also has bipartisan critics, from tech libertarians to progressive open-internet advocates. Google and Facebook, the companies which JCPA most directly targets, are vehemently opposed to a legal requirement to pay for news.

Crucially, the proposal has a key proof point: Australia, where a version of the collective bargaining experiment has been playing out since 2021 . There, Facebook opposed the measure so aggressively that it temporarily wiped the news entirely off Australian Facebook —a hard-ball attempt to make Australians think twice before making Facebook pay up. What happened next, though, was telling: The Australian measure passed—and Google and Facebook did indeed pay up, remunerating Australian news companies for hundreds of millions of dollars .

The news experiment Down Under has spurred legislatures worldwide to adopt a version of their own—an EU directive has Google forging similar agreements, most recently with France —momentum that advocates say is making Google and Facebook nervous. “Google and Facebook don’t want to start a precedent where they have to pay for content,” says Mike Davis, director of the Internet Accountability Project, a conservative think tank that has joined liberals in Washington in pushing for antitrust reforms that would curtail Big Tech. “This is small potatoes for them—it’s a couple billion dollars, right? But it’s life or death for your hometown newspaper.

” The architects of the JCPA are motivated by a single, fiery accusation: Google and Facebook are “free-riding” off the news. It’s this free-riding, advocates contend, that perhaps more than any other factor has driven journalism into financial collapse. In the decade or so after the Great Recession, the blame for newsrooms’ decline was attributed broadly to “the internet”—and like encyclopedias, traditional journalism was dinged for failing to adapt to technological change.

But by the end of the 2010s, a new argument had coalesced from media scholars and economists: Google and Facebook were the real culprits. Alongside an extensive white paper from the News Media Alliance, the influential antitrust thinker Matt Stoller might be where this school’s clearest explanation comes from. A confluence of factors, Stoller argues, disguised what was really causing journalism’s collapse.

The argument makes three basic points. First, news is extremely valuable to Google and Facebook: The snippets, links, and excerpts of news they display keep users engaged with a stream of novel content. In the social media factory that sells your engagement to advertisers, the news has become an essential “commodity input” —what timber is to home construction, or steel is to shipbuilding—to use the metaphor of Microsoft President Brad Smith, one of the biggest backers of the collective bargaining concept.

Second, unlike other types of content—such as music and video streaming, terrestrial radio stations, and movie theater chains where platforms pay creators for the economic value their creations provide—Google and Facebook don’t pay to host news. (They don’t have to, thanks to a pivotal copyright decision that ruled in Google’s favor way back in 2007. ) “We would never expect a platform to stream movies without paying a film’s creators,” Representative David Cicilline, JCPA’s main sponsor in the House, said in August .

Google and Facebook, he added, are “seizing news content to enrich their platforms but never paying for the labor and investment required to report the news. ” (Disclosure: This past summer I interned on the House Antitrust Subcommittee, which is chaired by Cicilline. ) Third, JCPA’s proponents emphasize that news publishers are fundamentally adversarial competitors with Google and Facebook.

Although the two tribes are deeply symbiotic (note the “Share” button alongside this article) they also, at bottom, compete for the same resource—your time—that they must sell to the same limited pool of advertisers. Throughout the 2010s, just as Google and Facebook were devouring a gargantuan share of the world’s advertising revenue, news publishers began watching their advertising revenues crumble . Adding these together, advocates allege that platform giants are drinking journalism’s milkshake, using the very content newsrooms produce to lure away their own advertisers.

Describing a “massive free-riding problem,” NewsCorp’s general counsel said in 2019 that Google and Facebook “deploy our highly engaging news content to target our audiences, then turn around and sell this audience engagement” to digital advertisers—siphoning away “the overwhelming majority” of ad revenue “without making any investment in the production of the news. ” Media executives have seethed at a business model that has virtually zero content-creation cost but gets the bulk of the revenue—billions of dollars, as Stoller puts it, “some of which used to go to finance journalism but now goes to private jets in Palo Alto. ” Why can’t publishers just refuse to allow Google or Facebook to post its news links unless they paid up? Because such horizontal coordination is considered price-fixing under antitrust laws.

The JCPA, however, creates a eight-year window for qualifying news companies to legally negotiate with massive online platforms. If negotiations fail, an arbitration process will fast-track an agreement on a fair price for news. Those behind the legislation point out that this model has a ready comparison: the music industry, where an antirust consent decree allows collective licensing groups that represent musical artists (like ASCAP and BMI) to charge licensing fees to music publishers, radio stations, YouTube, and other sources of music.

“That model already exists,” one congressional aide explained, who spoke to WIRED anonymously to discuss key details of the bill. “It’s not perfect, but it works. ” For their part, Google and Facebook have long claimed that they do effectively pay for news: first through the traffic they direct to news sites, and second, through limited subsidy programs like the Meta Journalism Project and Google News Initiative.

News publishers fiercely contest these claims, noting that Google has devised clever ways to keep the majority of users inside its “walled garden. ” In any case, most publishers think the platforms’ efforts “are no substitute for billions of dollars in lost ad revenue and the power of opaque algorithms”—which is why revenue has plummeted despite an overall increase in web visitors to the top 50 American news publications. In a twist, another criticism has come from some left-of-center tech activists acting in unison with traditional conservatives and the tech lobby.

A public letter , signed by entities as wide-ranging as the Computer and Communications Industry Association, Public Knowledge, and the Wikimedia Foundation raises several of the most common arguments. One is the prospect that paid content amounts to a so-called link tax, atrophying the connective tissue that makes the web run freely. Another is that only the largest media companies will wrest money from Big Tech, with smaller publishers left in the cold , and that the money might go to CEO salaries instead of hiring journalists.

And they warn making Google and Facebook pay for news will complicate their efforts to moderate content. By and large, JCPA’s defenders have answered these critiques (a quick scan of Twitter shows the debate can get feisty). To address concerns that money would be diverted to boardrooms, congressional staff say they are working toward including a mandatory use provision—requiring newsrooms to invest a large percentage of settlement money toward hiring journalists.

And a key amendment, securing the support of Sen. Ted Cruz, would take content moderation off the table —meaning negotiations would be only about the price for the news the platforms want to use. An antitrust exemption isn’t the only way to level the playing field.

Some opponents of JCPA have long argued for a kind of public media fund , furnished by a tax on Big Tech. While a cartel might not be a pretty solution, JCPA’s advocates argue it is the only way to achieve a non-tax, market-based negotiation with Big Tech behemoths—like Power Rangers morphing into Megazord to battle Godzilla. Perhaps the most compelling response to these concerns come from a single source: Australia.

There, advocates point out, many of these opponents once made these same warnings —yet the country’s experiment is showing early signs of success. “Outlets throughout Australia are hiring new reporters,” write the authors of a new report —including The Guardian , which added 50 journalists. The agreements brought in more money than expected: $140 million, including 24 smaller media entities.

As Davis told WIRED, “Australia is a resounding success. ” The Australian agreement isn’t perfect. Some newsrooms were left out of the agreement.

And negotiations are murky to the public because both sides used nondisclosure agreements. Government officials say they are working to tweak the law. But then there’s a new kind of problem in Australia—one that journalism professors there have been teaching students how to navigate, and one policymakers might want to keep in mind: Suddenly, they say, there are too many job openings in journalism to fill.

.