The proposed immunity for struggling newspapers from antitrust law was rejected by the U.S. government, The Associated Press reported Tuesday.

Representatives from the newspaper industry asked the House Judiciary Committee for more flexibility for newspapers in antitrust legislation. The group said current laws limit newspaper mergers as if they are only competing with one another, while in reality they also compete with numerous online news sources. The representatives referred the judiciary subcommittee to the recent number of job losses, bankruptcy fillings and closures in the industry.
Carl Shapiro of the Justice Department told a House panel that the exception is unnecessary, and that newspapers are capable of adapting to a media landscape with online competitors, the AP reported.

Publishers disagreed, saying the antitrust law is outdated, and hurts their ability to compete.

"Newspaper publishers will need the flexibility to explore new approaches and innovative business models without the delay, burdens and uncertainty created by the competition laws," said Brian P. Tierney, CEO of Philadelphia Newspapers LLC, according to the AP. "The enforcement of the antitrust laws has not yet caught up to current market realities."

The discussions are based on the potential loosening of laws governing joint operating agreements aimed to save flailing newspapers in two paper cities. The Newspaper Preservation Act of 1970 permitted joint operations of the two newspapers allowing to share business operations and costs with their rival, while maintaining separate newsrooms and a competitive relationship.

Since 1970 more than two dozen joint operating agreements had been undertaken, however at the beginning of this year there were only nine left, according to the AP. Critics of the proposal fear the relaxation of antitrust laws could create political monopolies and damage the quality of reporting at the newspapers.

Efforts to change competition law were prompted by House Speaker Nancy Pelosi's letter to Attorney General Eric Holder, which asked for an update of competition related to newspapers, "so that the conclusions reached reflect current market realities."