New antitrust relief for newspapers opposed

Carl Shapiro, Deputy Assistant Attorney General in the Antitrust Division of the Department of Justice, rejected new immunity from antitrust laws for teetering newspapers struggling to compete with Internet providers of news, entertainment and advertising. Newspapers, however rare and financially weak, can adapt and ultimately conquer the threat posed by the Internet, he told the House Subcommittee on the Courts and Competition Policy and the Internet. Newspaper industry representatives told the House Judiciary Committee's competition policy subcommittee they need more legal flexibility than current antitrust law allows. Current laws limiting mergers are enforced as if newspapers still compete for advertising and readers only with each other, they said. In reality, they said, newspapers now compete with countless bloggers and online news sources. Industry representatives call that a losing business model, pointing to the rising numbers of newspapers slashing staff and filing for bankruptcy amid a reader exodus for online sources of news and commentary. At issue is whether to loosen laws governing joint operating agreements designed to save dying publications in two-newspaper cities. The agreements, permitted by the Newspaper Preservation Act of 1970, assumed that the costs of putting out a newspaper were so high that two newspapers wouldn't be able to survive in the same town. Under a JOA, two newspapers share business operations and costs with their in-town rivals while keeping separate, competing newsrooms. There have been more than two dozen JOAs, but as of Jan. 1, only nine remained. They included newspapers in Denver, Detroit, Seattle and Tucson, Ariz., all of which were limping under the crippling weight of what newspaper representatives described as an unwinnable fight against Internet sites. Some witnesses expressed fears that further relaxing controls on mergers could create monopolies and dilute the quality of journalism.