What newspapers need, and why antitrust law may block it

Jonathan Rauch:

Unfortunately, however, it is probably illegal for newspapers to form a subscription consortium [enabling consumers to pay for web content through a one-stop subscription to hundreds of newspaper sites]. Antitrust law was written generations ago, when newspapers were local monopolies or duopolies. Today, of course, they compete with the whole Internet. The problem now is that they have too little market power, not too much.

Even so, antitrust law regards collective pricing as collusion. “There is a well-established tunnel vision in applying antitrust laws,” says Lee Simowitz, a media lawyer with Baker Hostetler in Washington. “Broader values don’t enter the equation.” Allowing newspapers to combine forces, he says, is “really up to Congress.” …

Sooner or later, newspapers will need to get their acts together — literally — and charge collectively for content, and it will be in the public’s interest to let them do so.

(“How to Save Newspapers–and Why”, National Journal, Jun. 14; will rotate off site).


  • If Jonathan wants to start PressPass.net, and has a source of venture capital, he can hire me as general counsel and I can get him around the antitrust laws.

    The PressPass entity would merely need to individually negotiate exclusive content arrangements with individual newspapers. To prevent the first-mover-takes-a-bath problem, there is a clause in the contract stating that the effective date does not take place until 30 days after X number of newspapers sign exclusive agreements.

    The real problem with the Rauch proposal is that this will fall flat on its face as a business model. With the exception of some small papers, no one is going to want to do it: they’ve invested too much money into their web sites to want to surrender control, and the eventual hold-outs think that they’ll be able to take on PressPass by themselves and gain market share to boot, a not implausible position to take if they’re the New York Times or Washington Post. Witness the failure of the Times model, and the WSJ has realized that its opinion journalism is much more valuable in front of the subscription curtain. So it would only work if newspapers were required to join PressPass through some sort of government coercion. Which seems like a bad idea.

  • Skip Oliva suggests that I may be wrong about whether my workaround would shield newspapers from antitrust problems.