Oregon is the latest state to introduce legislation intended to save “digital journalism providers.” A bill working its way through the Legislative Assembly has attracted the support of mainstream media outlets, such as The Oregonian and Oregon Public Broadcasting. Even Fred Flintstone chimed in, begging the legislature to “Keep Cave News Alive.”
Oregon Senate Bill 686 and its proposed amendments aim to address the financial struggles of news organizations in the digital age by requiring online platforms to engage in arbitration to pay digital-journalism providers or else to donate to the Oregon Civic Information Consortium.
But this approach, often referred to as a “link tax,” is likely to create more problems than it solves. The Legislative Assembly would be wise to let this bill die before it hits the floor.
The core issue with SB 686 is its fundamental misunderstanding of the relationship between online platforms and publishers. This relationship is mutually beneficial: platforms drive valuable traffic to news sites, and news content makes platforms more useful for users. Publishers actively seek to maximize their presence on platforms like Google and Facebook, demonstrating the value they receive from being linked.
The ‘Link Tax’ Problem
At its core, SB 686 creates a “link tax,” which would force platforms to pay for linking to or displaying snippets of news content. This approach misunderstands the relationship between platforms and publishers, where both parties derive value from the relationship.
Platforms direct valuable traffic to news sites, while news content makes platforms more useful to users. It’s been frequently noted that “publishers have always been able to opt out of appearing in Google search results, and they don’t. In fact, they do the opposite: they vigorously compete to maximize their presences on Google and on Facebook.”
Market Distortion and Concentration Effects
Australia’s experience with a link tax demonstrates that similar legislation primarily benefits large media conglomerates. Research finds that:
Within a few months of the link tax’s passage, Google and Facebook had forked over $200 million to news outlets, with 90 percent going to the three largest conglomerates.
Despite claims of supporting small journalism outlets, these laws tend to accelerate media consolidation and to benefit established players. For example, Free Press Action reports:
Some of the most sizable broadcasters in the state are owned by the likes of Sinclair Broadcast Group (KATU, KVAL, and KTVL, among others) and Nexstar Media Group (KOIN). In the newspaper world, some of the biggest outlets fall under the umbrella of the Advance-Newhouse media empire (The Oregonian), Gannett (The Register Guard and The Statesman Journal), Lee Enterprises (The Corvallis Gazette Times and The Albany Democrat-Herald), and Carpenter Media Group (dozens of papers across the state) — all out-of-state entities.
Lack of Transparency
The Australian News Media Bargaining Code has been criticized for its “lack of transparency around the deal amounts and processes.” Oregon’s bill does not require public disclosure of how much platforms pay individual news organizations or how that money is used. As my International Center for Law & Economics (ICLE) colleague Brian Albrecht points out, the arbitration mechanism is just another form of price regulation:
[T]he actual arbitration decision wouldn’t technically be made by the government, but by a third party. Fine. But ultimately, after stripping away the veneer, this is all just an elaborate mechanism built atop the threat of the government choosing the price in the market.
SB 686 and its amendments similarly lack meaningful transparency requirements, making it difficult to assess whether the legislation achieves its stated public-interest objectives.
Definitions of ‘Digital Journalism Provider’ and ‘News Journalist’ Are Simultaneously Under- and Over-Inclusive
The proposed legislation goes through enormous mental gymnastics to draw a box around defining journalism. The result is a mishmash that excludes essential news sources, such as “citizen journalists” who engage in deep research and often break news.
At the same time, the definition is so expansive under the “Dash 3” amendment that ICLE itself could be considered a “digital journalism provider,” and my colleagues and I could be considered “news journalists.”
I’m sure that is not the bill sponsors’ intent, but it is one of the many pitfalls when legislation attempts to define a profession that spans a wide range of workflows and organizational forms.
Constitutional and Legal Concerns
The bill likely raises significant First Amendment concerns by compelling speech and association. The Constitution of Oregon is recognized for having one of the most expansive free-expression provisions of any state constitution. Article I § 8 says:
No law shall be passed restraining the free expression of opinion, or restricting the right to speak, write, or print freely on any subject whatever; but every person shall be responsible for the abuse of this right.
SB 686 may not withstand constitutional scrutiny, in that it would force platforms to pay for linking to content—an activity broadly viewed as protected speech.
The bill may also conflict with Section 230 of the Communications Decency Act and federal copyright law, which have carefully balanced the rights of content creators with the need for an open internet that facilitates linking, sharing, and commenting on content.
Conclusion
SB 686 would create a novel quasi-property right in links and snippets that could disrupt the fundamental architecture of the internet. It would reward large, established media companies at the expense of innovative newcomers. And it could lead to years of costly litigation, with uncertain benefits for actual working journalists or news consumers in Oregon.
While struggling outlets may be cheering “Yabba Dabba Doo” in support of the proposed link tax, legislators would be wise to “Yabba Dabba Don’t.”
