The New Zealand Initiative is urging the government to abandon the Fair Digital News Bargaining Bill, warning that the proposed legislation could harm the very news organisations it aims to help.

In a new research note, the Initiative argues that the bill, which would require large digital platforms to negotiate payment for news content with New Zealand media companies, is based on flawed premises and risks significant unintended consequences.

“This bill represents a misguided approach to supporting journalism,” said Dr Eric Crampton, Chief Economist at The New Zealand Initiative. “It ignores the potential for voluntary agreements and new business models to emerge as the market adapts to technological change.”

The Initiative’s research highlights several key concerns:

• The bill could reduce news availability if platforms respond by limiting or removing news content entirely, as seen in Canada.
• It may entrench existing players and stifle innovation in the media market.
• The legislation undermines the open nature of the web and sets a dangerous precedent for regulatory overreach.

“If there is a public interest case for supporting journalism, it would be more transparent and economically efficient to do so through direct subsidies rather than through forced transfers from one sector to another,” Dr Crampton added.

The Initiative recommends that instead of pursuing this legislation, policymakers should focus on targeted support for public interest journalism and creating an environment that encourages innovation and competition in the digital age.

The research note The Fair Digital News Bargaining Bill is available on the New Zealand Initiative website.

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