The only way to control tech giants like Facebook may be for governments to gang up

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It used to be that the most influential media companies in Canada had to keep at least one eye on the Canadian public interest whether they wanted to or not.

Broadcasters are regulated through the Broadcasting Act, and while newspapers face less oversight, a restriction on foreign ownership means there is always the potential that a determined Canadian government could do something, like change tax rules, that could nudge them into line.

But now, as internet mega companies including Facebook and Google have taken over much of the ad revenue and eyeballs that mainstream media used to enjoy, there have been only nascent efforts to make them answer to the public interest. 

This week, as Australia considered laws to make them pay for news, the new communications giants have demonstrated they can thumb their noses at mere national governments.

But with a growing sense around the world, including Canada, that Facebook, Google and the like have grown too big and powerful, there are those who say an international effort is necessary to take on the titans of tech.

Facebook’s warning shot to Australia

So far, Australia’s tactic doesn’t seem to be working as planned — although Canada is now vowing to follow their lead and make Facebook pay for news content.

Following a proposal by Australia to force the technology giants to pay for Australian news stories, stories that the tech companies distribute and use to earn their own profits, Facebook has fired a warning shot across the bow of the country’s Parliament.

“They’ve created chaos, and it’s quite deliberate,” Daniel Angus, a professor in digital communication at Queensland University of Technology told Bloomberg news.

Facebook not only offered a flat no, but effectively ejected Australian news stories from its site both down under and worldwide, preventing users from viewing them.

The company even removed access to things like government health notices and weather information, something they later said was a mistake.

Google, however, has entered negotiations with News Corp in a way that signalled a possible accommodation with the new rules. News Corp’s Rupert Murdoch, a conservative, has been one of the titans’ biggest critics, in 2019 joining an unlikely pact with U.S. Senator Elizabeth Warren, a progressive Democrat, to weaken Google’s power.

Thursday, Canada’s Heritage Minister Steven Guilbeault said Canada may adopt the Australian model, or follow the lead of other countries trying to get tech giants to pay for content.

After his start in Australia, Rupert Murdoch has become a global media mogul and a strong critic of the power of the internet giants that profit from the news his companies produce. (Mike Segar/Reuters)

Calls for regulation

Besides the complaint that the companies like Facebook and Google are earning their profits at the expense of the struggling news industry that is so crucial to the democratic system, there have been many other reasons for demanding greater regulation.

In the U.S., the calls grew louder after Russian interference in the 2016 election of Donald Trump, along with data mining and privacy scandals. 

Many object to the uncontrolled misinformation campaigns tech giants seem unable to manage, increasingly harmful conspiracy theories — including the false narratives about the 2020 U.S. election.

Others complain they are simply too big, able to avoid taxes and acting as monopolies in areas such as search and personal communication.

Facebook CEO Mark Zuckerberg, speaking at a company conference in 2015. Facebook has increasingly come under scrutiny from regulators who consider it too powerful, but efforts to regulate haven’t done much. (Robert Galbraith/Reuters)

So far, attempts by large international organizations to convince the tech giants to play nice have been weak or ineffective.

There are international bodies, including the United Nations Global Compact, to set standards and to encourage “business as a force for good” but participation is voluntary and Christina Koulias Senior Manager, Global Governance said in an email that Facebook is not a participant.

The Organization for Economic Cooperation and Development has a policy on Corporate Social Responsibility. But an ambitious plan by the OECD to coordinate global tax policy that I wrote about back in 2014 has yet to bear fruit for a series of reasons, most recently, say those in the know, due to a brush-off from the Trump administration.

In fact, according to Canada’s own Centre for International Governance Innovation (CIGI), based in Waterloo, Ont., the faceoff between Facebook and Australia illustrates a gap that needs to be filled. And they have a proposal for how to do it.

Tech giants make the rules and the profits

In the case of Facebook, the company claims the Australian rules don’t fit its business model, since it would be forced to pay up when third parties post newspaper articles.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” Facebook regional managing director William Easton told the Associated Press.

But CIGI’s managing director of digital economy, Bob Fay, said the problem is that corporations know they can set rules to maximize profits without thinking about the interests of other players, including governments.

“We have these very large, very powerful, global companies that set their own rules, based on what’s best for their own business model,” said Fay.

“We’ve seen very recent examples of where these companies, based on their business models have created substantive harm.”

As well as the new Australian conflict that interfered with people’s health and well-being, Fay specifically cites the use of social media to incite violent and anti-government action in the U.S. — culminating in the invasion of Congress.

There is currently no global forum to regulate cross-border digital giants but Canada’s CIGI wants to create one, says Bob Fay, managing director of digital economy. (Submitted by Bob Fay)

The digital giants are influential in individual countries like Canada and Australia, but in many places they have virtually no physical presence. That makes them hard to influence back.

And while international treaties on standardization or international trade agreements exist, the phenomenon of internet tech giants that cross national boundaries is so new and changing so rapidly, that national governments simply were not prepared.

“There really is no global forum [where] countries come together on these types of issues,” said Fay.

That’s why CIGI has proposed something it calls the Digital Stability Board an international body, with decision making powers, to constantly monitor and regulate global digital platforms in real time as they transform.

The name and model come from the Financial Stability Board, which has a mandate from the G20 to “promote the reform of international financial regulation and supervision,” Fay writes.

The CIGI proposal is not an instant solution for the current problem in Australia. Constituting the body and getting everyone to participate will take time.

But now that Trump, who disliked international co-operation, has been replaced by President Joe Biden, and now that the world has seen how willing Facebook has been to use its power, Fay hopes governments will be spurred into action.

“There are enormous benefits that come from these platforms, but the harms have become increasingly obvious, and they touch every aspect of our lives,” said Fay. “Governments need to take action.”

Follow Don Pittis on Twitter @don_pittis


CBC / Radio-Canada has business partnerships with Facebook for content distribution, and with Google for services that encompass mobile distribution, data storage and communication tools.i





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