Competition and Truth in the Market for News

T he political traditions, legal doctrine, and regulatory policy of the United States have all been heavily influenced by the proposition that competition in news markets promotes truth. In colonial America, the idea that truth would prevail in a competitive “marketplace of ideas” was “used continuously. . . . Puritans, printers, and politicians among others used the concept to justify their assaults on authority” (Smith, 1981). This proposition has been called “one of the earliest and most influential contributions to First Amendment doctrine” (Williams [2002] 2006, p. 627) and “one of the basic tenets of our national communications policy” (Federal Communications Commission, 2003). Allusions to it appear in 126 Supreme Court opinions (Hopkins, 1996) and in 87 policy documents of the Federal Communications Commission (Napoli, 1999). It has also been used as a central justification in the promotion of press freedom abroad (Islam, 2002). However, many have questioned whether press competition is so obviously beneficial. Increased market pressure is sometimes associated with cutbacks in reporting and editorial quality (Zaller, 1999). Firms such as the BBC that are insulated from traditional product market competition are sometimes viewed as especially informative (Prat and Stromberg, 2005). Falsehoods can persist for long periods despite high levels of press competition (Schauer, 1986), and consumers may be unable to distinguish accurate and inaccurate reporting (Ingber, 1984). In the view of one legal scholar: “The assumptions on which the classic marketplace of ideas theory rests are almost universally rejected” (Baker, 1978).