NMA Proposal for Antitrust Exemption for Digital Ad Negotiations Could Face Headwinds
A News Media Alliance-backed lobbying push for legislation that would grant news publishers an antitrust safe harbor allowing them to collectively negotiate advertising deals with top U.S. digital advertising platforms is likely to face significant resistance on Capitol Hill, lawyers and lobbyists said in interviews. NMA, whose members include The New York Times and The Washington Post, called for the safe harbor to improve publishers’ ability to have “concrete discussions” with advertising platforms Facebook and Google amid perceptions those firms effectively form a “digital duopoly.”
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Legislation allowing the collective negotiations “will address pervasive problems ... diminishing the overall health and quality of the news media industry,” said NMA President David Chavern in a statement. “To ensure that [quality] journalism has a future, the news organizations that fund it must be able to collectively negotiate with the digital platforms that effectively control distribution and audience access.” In a Sunday Wall Street Journal opinion piece, he said “today’s internet distribution systems distort the flow of economic value derived from good reporting.”
The lobbying campaign is in “early stages,” with the industry not having identified specific lawmakers as important prospects to lead the drafting of an actual bill, said a NMA official. The group's members are moving to educate lawmakers on challenges the news industry faces amid a “confluence of challenges” as revenue streams shift, the official said. “People are going to be responsive” to the argument that “journalism depends on our ability to negotiate for a better deal,” the official said.
Fletcher Heald lawyer Kevin Goldberg is among the news industry observers who will be watching as the campaign progresses, before taking a position. “If something a little more concrete comes forward, I’d imagine there would be a lot of support” among news publishers because the industry “absolutely needs the revenue,” he said. Goldberg said he's “wary” of the proposal now, given its reliance on the news media getting a “special exemption” that would pit it directly against another industry, and some clients are “aware of this and have been discussing it.”
Critics of news publishers’ characterization of the state of the U.S. digital advertising industry said NMA and its members will find it difficult to get traction on the Hill. “It’s unlikely that Congress will see fit to provide an antitrust exemption for one industry to engage with another industry that is quite competitive,” said Computer & Communications Industry Association Vice President-Law and Policy Matthew Schruers: “The digital duopoly narrative the news companies have advanced ignores that there have been other entrants” into the U.S. digital advertising market, including News Corp. “Digital advertising alone is not in my opinion” a separate market and most publishers “are not selling digital ads alone,” he said, noting the presence of numerous ads in The Washington Post’s print edition not placed by digital ad services.
It’s generally difficult for antitrust exemptions to advance through Congress, and lawmakers of both parties will view it as a “tough sell” initially, said a lobbyist who represents media and internet companies. Democrats “have problems with antitrust exemptions in general” and congressional Republicans will also be resistant, the lobbyist said. NMA’s prospects may depend on the relative support the association, and California-based Facebook and Google have on the Hill, the lobbyist said. By that measure, it could be difficult for NMA given the power of California’s congressional delegation, which includes Senate Judiciary Committee ranking member Dianne Feinstein, D-Calif., the lobbyist said. “The Senate is such a collaborative body” that if Feinstein doesn’t support the NMA proposal, it would be tough to advance it, the lobbyist said.