Friday, March 05, 2021

Liberals Angling On Freeing Narrative Hegemony From The Ruthlessly Parasitic Clutches Of Google And Facebook

nakedcapitalism |   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 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 Biden administration and European Commission in this fight? A lot is at stake, yet so far they have been quiet as church mice.

How do Google and Facebook threaten the Free Press? These two companies alone suck up an astounding 60% of all online advertising in the world (outside China). With Amazon taking another 9 percent, that leaves a mere 30% of global 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 spendng (and projected to grow further), that has greatly contributed to underfunded and failing news industries in country after country, including in Europe and the US.

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 (71%), 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-setting of its own. A new law will require large digital media companies to compensate Australian media companies fairly 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 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.

Now a similar battle is playing out in the US state of Maryland. Over the last 10 years, US newspapers’ advertising revenue has 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 $250 million in its first year, dedicated to schools.