Every galah in the regulatory pet shop right now is talking about big tech. But will it lead to the sort of big break-up that Facebook’s Mark Zuckerberg says he fears or the light-touch rap on the knuckles he’s been pleading for?
Well, it may be bad news for Mark.
Hidden in the tsunami of budget and Trump news last week were two reports from key committees in the US Congress and European Union. These called for draft legislation to “structurally separate” the big platforms (that is, break ‘em up) and restrain them from operating in adjacent lines of business.
Sure, it’s just another step in the process — more tech slog than tech-lash, says The Economist — but each step makes possible a future that seemed unimaginable just a year ago.
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In the short term this makes some financial arrangement between Google and global news publishers, as per last year’s report on digital platforms by the Australian Competition and Consumer Commission (ACCC), more likely.
In France, last week, the court of appeal ordered the search engine to talk money with publishers. The US Congress anti-trust report reflected favourably on the ACCC report and recommended that news publishers be given the right to negotiate collectively with the giant over money.
To avoid a two-front war with both old media and regulators, Google has tabled a $1.4 billion offer to news publishers “to create and curate high-quality content for a different kind of online news experience” to be known as Google News Showcase.
With the money Google already pays through its News Initiative, it’ll be paying about 1% of its global advertising revenues. (Australia’s publishers have demanded 10% of revenues, which News Corp estimates is $1 billion, Nine at $600 million.)
News Corp’s initial response raised eyebrows when New York-based CEO Robert Thomson responded with a gentle: “We applaud Google’s recognition of a premium for premium journalism … There are complex negotiations ahead but the principle and the precedent are now established.”
As largely foreign corporations, News Corp (and Guardian Media Group) will be wondering whether they would get more from a global agreement with money on the table that takes account of its US and UK assets, than a purely — and contested — Australian arrangement.
Nine may end up finding that when it comes to News Corp. The enemy of their enemy is not necessarily their friend.
While Google looks to settle with old media, Facebook continues to struggle with the deep social damage its algorithm continues to cause through amplification and micro-targeting. Last week, it banned (or tried to ban) all QAnon groups and finally threw in the towel on political ads, announcing it would stop after the US election on November 3.
2020 really has been a long year: it was only January that Facebook was refusing to fact-check political ads.
On the other side of the ledger, 18 months after Zuckerberg promised “a privacy-focussed vision for social networking”, Facebook announced it would be amplifying posts within public groups to “help more people find and connect with communities”. Remember it was Facebook groups where, it turned out on Friday, the right-wing militia planned (in part at least) the kidnapping of Michigan Governor Gretchen Whitmer.
Like the ACCC report last year, the report from the Democrat majority on the US House Anti-Trust Report calls out the monopoly structures of big tech and the threat they pose to democracy and the economy.
As well as structural separation, the US report calls for draft legislation that prohibits further mergers, bars self-dealing (e.g. Apple promoting its own apps in the App Store) and blocks the platforms using their market power to force conditions on users and suppliers.
Similarly, the Internal Markets Committee of the European Parliament is pushing for specific ex ante rules for platforms that act as “gatekeepers” to prevent the market failures they cause and open markets to new entrants.
There’s not often pushback against the market distortion of monopoly. These are powerful, well-connected companies and there’s still a long way to go to existentially challenge the world’s Facebooks.
But, step by step, the tech slog is heading in the right direction.