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The Antitrust Exemption for Joint Newspaper Operating Arrangements

The Newspaper Preservation Act, 15 U.S.C.S. §§ 1801-1804, provides a limited exemption from antitrust laws for joint operating arrangements between newspapers in a particular locality. The objective of the legislation is to preserve independent reporting and editorial operations of the two newspapers while allowing shared production facilities that through a lowering of costs would allow both newspapers to survive.

The Act allowed joint operating arrangements in existence at the time of passage of the Act in 1970 to continue if at the time the arrangements were entered into, only one of the newspapers in the arrangement was likely to have survived but for the arrangement. The Act also allows future joint operating arrangements if the arrangements first receive written consent of the U.S. Attorney General. That consent must be based on a determination that a newspaper in the arrangement is a “failing” newspaper and that not more than one of the newspapers in the arrangement was something other than a “failing” newspaper. In effect, a joint operating arrangement between two or more newspapers that were not “failing” may not be approved on the basis of the Newspaper Preservation Act.

The exemption from antitrust laws provided by the Act does not extend to “predatory practices.” The statute states, 15 U.S.C.S. § 1803(c), that nothing in the Act may be construed to allow predatory pricing or practices by the joint operating arrangement that would be illegal under the antitrust laws if engaged in by a single firm. Thus, an agreement between the joint operating arrangement and a competitor of the arrangement to fix prices or to monopolize a relevant market would be illegal. However, the agreement between the parties to the joint operating arrangement to enter into their arrangement is not illegal if it is approved by the Attorney General even if the effect of the arrangement is to achieve monopoly power in the market for newspapers in a locality.

The scope of activities that may be merged together in a joint operating arrangement between two newspapers is broad but does not include combining reporting or editorial staffs. The phrase “joint newspaper operating arrangement” is defined in 15 U.S.C.S. § 1802 to mean:

[A]ny contract, agreement, joint venture (whether or not incorporated), or other arrangement entered into by two or more newspaper owners for the publication of two or more newspaper publications, pursuant to which joint or common production facilities are established or operated and joint or unified action is taken or agreed to be taken with respect to any one or more of the following:

printing; time, method, and field of publication; allocation of production facilities; distribution; advertising solicitation; circulation solicitation; business department; establishment of advertising rates; establishment of circulation rates and revenue distribution:

Provided, that there is no merger, combination, or amalgamation of editorial or reportorial staffs, and that editorial policies be independently determined.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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