Yves here. I’m leery of the term “free press” since it evokes libertarian themes like “free markets” that are intellectually incoherent as well as not very good for society at large. And the big problem is that the press is absolutely not free. It costs money to produce original news content. That the big reason why Naked Capitalism, as an itty bitty thinly resourced site, does way more news curation and commentary/analysis than original reporting: there’s still plenty of value to be added in mining facts found by others. But someone has to do the original information-gathering or else we’ll live even more in a world of dueling press releases than we do now.
The article does the useful service of debunking some of the attacks made on legislation in Australia and Maryland to try to curb the way Facebook and Google are hoovering Internet ad revenues away from the press.
By Steven Hill, director of the Political Reform Program for the New America Foundation. His book “Europe Rising” will be published by the University of California Press in 2009. Originally published at openDemocracy
From France to Australia to the US state of Maryland, the free press is waging a battle for survival against Facebook and Google. Besides being gushing firehoses of COVID-19 and election disinformation and QAnon conspiracies, another of Google and Facebook’s dangerous impacts is undermining the financial stability of media outlets all over the world. Where is the European Commission and the Biden administration in this fight? A lot is at stake, yet so far they have been quiet as church mice.
How do Google and Facebook threaten free press? These two companies alone suck up an astounding 60% of all online advertising in the US. With Amazon taking another 9%, that leaves a mere 30% of digital ad revenue to be split among thousands of media outlets, many of them local publications. With digital online advertising now comprising over half of all ad spending (and projected to grow further), this has greatly contributed to underfunded and failing news industries in country after country, including in Europe and the US.
Australia and Maryland
Australia’s situation is typical. Its competition commission found that, for every $100 spent by online advertisers in Australia, $47 goes to Google and $24 to Facebook,
even as traditional advertising has declined. Various studies have found that the majority of people who access their news online don’t go to the original news source, instead they access it via Facebook’s and Google’s platforms which are cleverly designed to hold users’ attention. Many users rarely click through the links, instead they absorb the gist of the news from the platforms’ headlines and preview blurbs.
Consequently, Facebook and Google receive the lion’s share of revenue from digital ads, rather than the original news sources receiving it. Note that Facebook and Google could tweak their design and algorithms to purposefully drive users to the original news sources’ websites. But they don’t.
So Australia decided to fight this duopoly with some rules of its own. A new law will require large digital media companies to fairly compensate Australian media companies for re-packaging and monetizing their proprietary news content. Media outlets around the world are watching to see how this plays out.
Google initially fought the proposal, but finally negotiated deals with Australian news publishers, beginning with media magnet Rupert Murdoch’s News Corp, to pay them some compensation. But Facebook flexed its digital muscles by cutting off Australia entirely from its platform for several days, preventing Aussie news publishers as well as everyday users, including important government agencies like health, fire and crisis services, from posting, viewing or sharing news content.
The result was jarring, the proverbial ‘shot heard ‘round the world’. Facebook censored Australian users more effectively than the Chinese communist government ever could, prompting charges of ‘big tech authoritarianism’. Facebook finally relented to Australia’s requirement, in return for some vague and uncertain concessions. But the message of raw, naked platform power was unmistakably clear.
Before coming to its own settlement with News Corp and other publishers, Facebook set out to portray the Australian law as an insider job by Murdoch, to shake some money from the Big Tech Media tree. While there is undoubtedly some truth to that, this issue is much bigger than Murdoch, since media outlets in countries all over the world, both big and small, are seeing their financial well-beings drained away by Facebook and Google’s ad dominance. And a number of Australian media outlets besides News Corp have negotiated ad revenue-sharing deals with the digital platforms, including the Australian Broadcasting Corp, Seven West Media, Nine Entertainment, Schwartz Media and Solstice Media.
Now a similar battle is playing out in the US state of Maryland. Between 2008 and 2018, US newspapers’ advertising revenue declined by 62%, and without that funding, newsroom employment dropped by nearly half. Squeezed by these economics, Maryland approved the US’s first tax on digital ad revenue (earned inside its state borders), targeting companies like Facebook, Google, and Amazon. The measure is projected to generate as much as $250m in its first year, dedicated to schools.
But this battle has only begun. Lawsuits against Maryland are being threatened by the tech giants, even as legislators from the states of Connecticut and Indiana have introduced similar measures.
The Bigger Picture: What’s at Stake
Nelson Mandela once said, “A critical, independent and investigative press is the lifeblood of any democracy…It must have the economic strength to stand up…[and] sufficient independence from vested interests to be bold and inquiring without fear.”
One of the most important, unsettled debates of the internet age is whether digital media platforms like Facebook, Google/YouTube and Twitter are the new ‘public square’, a kind of global free speech Agora, or just the latest techno variety of old-fashioned publishers and broadcasters. Or a hybrid in between.
Over the past year that debate has intensified, as there has been crisis after crisis. Following the US Capitol ransacking on 6 January, Facebook, Google, and Twitter all decided to discontinue ‘publishing’ the president of the United States. Before that, as the platforms tried to deal with their toxic pipeline of disinformation regarding the COVID pandemic, racial tensions and the presidential election, they slapped on warning labels and removed the inflammatory content of certain users.
Now, in response to Australia’s law, Facebook pulled the plug on an entire country! That’s something only a giant monopoly publisher can do. In 2014, when Spain enacted legislation requiring Google to pay Spanish news outlets for the article snippets in its search results, Google bullied the government and closed its news service there.
Even before the past year’s seminal events, Facebook, Google and Twitter acted as publishers by turning over crucial decisions to their ‘engagement’ algorithms about which content is featured at the top of users’ news feeds, and what is promoted and amplified. Its sophisticated ‘long tail’ publishing machine uses precise content-targeting to niche users, showing different content to different people, including political ads. These are not passive online chat boards. They are ‘robot publishers’, in which algorithms perform the essential duties of an editor. From a legal or accountability standpoint, it should matter little that there is a supercomputer behind the curtain instead of a human.
So it’s pretty difficult at this point to argue credibly that these platforms are not in some sense publishers. Big Tech platforms are increasingly using their considerable publisher power to decide what content, sources and values should disappear or be amplified. These companies have more in common with The New York Times, Bild and Rupert Murdoch than they do with an online wikiboard or free speech corner in London’s Hyde Park.
Indeed, Facebook’s and Google/YouTube’s algorithmically curated machines, with 2.6 billion and two billion users respectively, are the largest publisher and broadcaster in human history. Yet existing law does not treat these companies like a publisher or broadcaster, especially when it comes to liability or accountability. The digital media platforms hide behind the fact that they have billions of users generating content, which resembles a ‘common carrier’ or public square role. But that should not obscure the centrality of their publisher role.
From that perspective, Facebook, Google and Twitter are completely within their publisher’s rights to decide it does not want to publish Donald Trump any more, just as The New York Times would be. Or just as Rupert Murdoch has an editorial right to feature Boris Johnson on the front page of The Sun or at the top of a Fox News broadcast. Facebook’s Oversight Board should take note.
Threat to the Open Internet?
Critics of the Maryland and Australian approach claim it threatens the principle of an open internet. They also insist that traditional media outlets actually benefit when Facebook/Google/Twitter send user traffic back to the news outlets. The latter claim is easily debunked, since ad revenue at traditional media outlets has plummeted in the digital media platform era, while it has zoomed for the platforms. One study found that digital media traffic supplied less than 0.2% of total revenue to the news companies examined (while producing 24% of their total visitor traffic). So whatever revenue the traditional media outlets have received, it’s a drop in the bucket compared to what they have lost.
And the ‘open internet’ principle must be balanced by the ‘copyright principle’, which was established years before the Internet was even invented. Copyright law mandates that any individual person or organization cannot swipe someone else’s content and monetize it without paying for it. The open internet principle essentially demands that traditional news sources bear the financial burden of continuing to produce quality news without fair compensation – much as it demanded that Napster be allowed to distribute copyrighted music for free without compensating musical artists and record companies.
The open internet principle is contributing to media financial instability throughout the world and taken to its logical conclusion will cannibalize what’s left of the news media. With no credible news sources to rely upon, the digital media platforms would be even more overrun by the barbarian disinformation for which the platforms have become notorious. They are eating their own seed.
Already the digital media platforms have turned thousands of publishers and broadcasters into little more than ghostwriters for their platform content. Facebook has transmogrified from its initial hip mission of being a convenient place to post your vacation and puppy pics, and re-find your long lost college roommate, into a ‘re-publisher’ that re-packages and monetizes product from the original producer without paying for it. In other industries, that’s called theft.
Democracies must stop this Big Steal before these companies do away with our democracies. France and Austria have passed similar laws, Canada says it will adopt the Australian approach, and possibly India too.
But the EU and US have been noticeably silent. Both are known for encouraging competition and a vibrant media, so you would think their regulators would jump into action to aid the free press. Unfortunately, the reaction from the Biden administration has been non-existent, though understandably it has a lot on its plate in its first months.
The European Commission’s silence has been more disappointing. Its two-year old Copyright Directive has been barely implemented, and now it’s championing its recently unwrapped Digital Services Act and Digital Markets Act. But those anodyne proposals lack regulatory teeth and, like the GDPR, do not fundamentally challenge the digital platforms’ toxic business model.
It’s time for governments on both sides of the Atlantic to step up their games, and ensure that Big Tech media respect the sanctity of copyright and stop undermining the world’s media and news outlets.