Facebook’s ham-fisted response to paying for news

While Google’s response to plans by the Australian government to force social media giants to pay for news has been nuanced, Facebook’s response has been provocative.

Imgage: MobileAppDaily

Facebook announced last Wednesday that it would block news-sharing on its Australian site.

I suppose Facebook hopes to generate outrage from Australians so that the government will change its mind, but it’s not going to work. The social media titans are facing similar moves by governments around the world, including Canada. Australia is the just the latest battleground. Google has reached deals with publishers in Britain, Germany, France, Brazil and Argentina.

News is vital to a functioning democracy and it must be funded. But How? We pay for news one way or another; either with our attention through advertising or by subscriptions. The news that you receive through CFJC Today and Kamloops This Week is paid by advertisers. The Globe and Mail requires a subscription.

As newspapers folded one by one, one laughable solution to the news drought was an army of “citizen reporters” who blog the news. What we got instead was an army of ill-informed bloggers with bull horns, each shouting louder to be heard over the din.

Print publishers complain that social media giants make money on their news.   Facebook and Google respond that they only post stories that publishers freely distribute and that publishers are the ones who benefit through increased circulation. But postings by publishers are a loss-leader: they hope that readers will be attracted to their sites and eventually subscribe to their news.

You’d think that this would be a win-win situation. Facebook and Google make money from news posted on their sites and publishers reap the benefits of increased exposure.

Facebook argues that that the Australian government is trying to fix a problem that doesn’t exist. Facebook said that the proposed legislation “fundamentally misunderstands” the relationship between itself and publishers, arguing that news outlets voluntarily post their article links on Facebook, which helped Australian publishers earn about $400million in 2020 through referrals.

The trouble is that the traditional business model for news publishers is broken. Paying reporters to dig up relevant news is expensive. Facebook and Google don’t pay for the news and yet get they receive revenues from it.

However, Facebook has a point: they are doing news publishers a favour and if they didn’t post reliable news stories, fake news would fill the vacuum. But their response has been ham-fisted compared to Google’s. Even though their complaint is the same, Google reached a global deal with Rupert Murdoch’s News Corp., owner of The Wall Street Journal and two-thirds of Australia’s major city newspapers, to develop a subscription platform and share advertising revenue.

The difference in approach mirrors the culture of the two social media titans. When Mark Zuckerberg said of Facebook, “Move Fast and Break Things,” it reflected the provocative culture of the company.

Google’s original motto was “Don’t be evil” which later became “Do the right thing.”

Canada is watching as the battle unfolds globally. Canadian Heritage Minister Steven Guilbeault will be introducing legislation that will require Facebook and Google to compensate news publishers. Will the response of be one of retaliation or cooperation?

(NOTE: Since this column was published, Facebook has reached an agreement to pay news publishers)

Ottawa’s plan to force digital giants to pay for news is doomed

image: Search Engine Journal

You might have missed it in the recent Throne Speech but the federal government intends to tax the digital giants Facebook and Google (FG).

The feds are reacting to complaints by newspapers that FG steals their news and profits from it.

That would be a legitimate complaint if newspapers didn’t give their content away in the first place. They do so to attract readers to their sites where readers will be exposed to advertising and hopefully subscribe.

If newspapers didn’t want you to see their product online, they wouldn’t put it there.

The business model for newspapers like the Globe and Mail operates on paid subscriptions and advertising. Obviously, they can’t afford to give away news that subscribers pay for, so they give away content selectively.

That being the case, the owners of the Globe and Mail were being disingenuous when they took out full page ads in May complaining that FG steals their content and makes money from the links.

If the Globe and Mail didn’t want FG to share content, they wouldn’t ask readers to “share this” on Facebook and they wouldn’t optimize their content so as to be found on Google searches.

Newspaper owners can’t promote sharing on FG and then complain when they do.

Globe and Mail columnist Andrew Coyne took issue with the owners of his newspaper:

“Indeed, most of the industry’s traffic these days, millions of readers and billions of page views annually, comes to us from Facebook and Google. Those readers are worth hundreds of millions of dollars to us annually. It would probably cost us a good chunk of that to find and attract them on our own. Facebook and Google send them to us … at no charge (September 19, 2020).”

Not all media are selective in what they share. CFJC Today places columns such as this one (please share it), and news online.

FG’s business model is quite different. They take content that others create and place ads on it. But, again, FG is not stealing content. People happily post pictures of cats and links like to the ludicrous far-right conspiracy theory QAnon which alleges a cabal of Satan-worshiping pedophiles is running a global child sex-trafficking ring and plotting against President Donald Trump.

The speech from the Throne was vague:

“Web giants are taking Canadians’ money while imposing their own priorities. Things must change and will change.”

But Heritage Minister Steven Guilbeault was clear when he said: “the Canadian government stands with our Australian partners and denounces any form of threats.”

Guilbeault was referring to Australia’s proposed law which would force FG to hand money over to media when users click on links to the media source that created the content, a so-called “link tax.”

But Facebook would simply deleting the links to avoid the tax. A Facebook spokesperson said:

 “This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

Ottawa’s plan to force digital giants to pay for links will backfire. Link taxation will mean that FG will stop sharing the content that legitimate media produce. The news vacuum so created will drive readers to fake news sites.

Is that really what the feds want?

The titans of technology have feet of clay

Technology seems unstoppable. The accumulated wealth of the Big Five: Apple, Alphabet (Google’s parent company), Microsoft, Facebook and Amazon, have a combined value of $4 trillion. That’s more than twice Canada’s annual GDP.

     image: Minneapolis/St.Paul Business Journal

Wall Street also looked unstoppable before the crash of 2008. Cryptic investments made amazing returns but finance wizardry also has feet of clay. Conor Sen, business columnist for Bloomberg Views, summarizes that vulnerability:

“Markets became irrational about how profitable the financial sector could become relative to the underlying economy, and in response to these market pressures, finance came up with increasingly elaborate schemes to make money that weren’t sustainable (Globe and Mail).”

Facebook and Google have the advertising world wrapped up. The clever duo don’t have to hire reporters to dig up news because users generate their own content.  Facebook and Google and benefit in three ways: by encouraging users to generate content, collecting detailed profiles of users, and then selling advertisements to those very users. Users happily post pictures of adorable kittens, videos, inflammatory and sometimes interesting comments (but not much actual news).

While Facebook and Google couldn’t care less about the loss of newspapers and other news sources, they should be worried about the financial health of their advertisers. Companies can afford to advertise only because they are viable. Amazon is profitable because third-party vendors choose to sell on Amazon.

“In other words,” says Sen, “for the most part, the big five tech companies exist at their current size and scale only because they serve a larger underlying economy of profitable companies.”

Tech giants exist in an economic ecosystem. There has to be a balance between the top predators and the health of the ecosystem which they feed. There’s going to be trouble for the big fish once the little fish stop feeding them.

Tech giants don’t just suck only advertising revenue from traditional sources. They also provide services that didn’t exist when newspapers ruled; like the cloud computing services provided by Amazon, Google and Microsoft. Cloud computing also depends on a viable economy.

The titans of technology could harm the very businesses they depend on. For example, Blue Apron, a meal-delivery company, has been a prolific online advertiser. What if Amazon were to establish a company and put Blue Apron out of business? It’s not inconceivable. Last year, Amazon bought Whole Foods for $17 billion and even the world’s biggest retailer Walmart took notice. Target is cutting advertising to stay in the game.

Fossil Group has been struggling lately. Sales of their watch have been dropping, perhaps because of the popularity of Apple Watch. If Fossil Group starts to cut back on advertising, Facebook and Google would lose ad revenue. Amazon would lose sales of the Fossil watch as well.

Owning a newspaper used to be a licence to print money. The marriage of news and advertising seemed solid. Now readers get “news” from the internet. Selling advertising on a medium where the content is generated by the target audience seems like a sure thing.

Amazon, Google and Facebook have a parasitic relationship to the economy. Other than advertising and marketing the products of others, their contribution to the economy is minimal.

Removal of links and the death of history on the internet

Convicted killer Clifford Olson would probably have preferred that any account of his murder of eleven children and young people in the 1980s removed from the internet. Links such as this Wikipedia article which detail the grisly horror.

Courtesy of Gizmodo

Courtesy of Gizmodo

A B.C. technology company also wants links removed for a completely different reason. Equustek’s wants Google to remove links to a competitor’s website. Equustek successfully sued that competitor for theft of their hardware design but the competitor persisted on selling it online. The B.C. Supreme Court ruled in 2014 that Google had to comply with Equustek’s request and remove the links. Google complied reluctantly.

However, the court order lays bare a much bigger problem than murder or industrial theft –the erasure of history on the internet. At issue is whether anyone, of motives pure or corrupt, should be able to remove records of significant historical events. Katherine Maher from Wikipedia worries about the jurisdiction of any court to remove history.

“If any country can demand the worldwide removal of search results, vast sections of history, science and culture could disappear from the global Internet. This could infringe on our ability to learn about the history of Tiananmen Square, the potential medical properties of cannabis, the discoveries of Darwin, or unsavoury allegations against the U.S. president-elect (Globe and Mail, Dec 9, 2016).”

Google doesn’t think it’s fair either and has taken their case to the Supreme Court of Canada where issue is currently being deliberated.

But Google is just the messenger. They don’t make webpages, they just find them.  While I’m reluctant to defend global corporate giants, I’m on Google’s side on this one. So are lawyers Ivo Entchev and Jeremy Opoplsky. Not only has the Google been “deputized” to carry out duties of Canadian law but Google is not even incorporated in B.C.

“Google did nothing wrong, but is being forced to bear the cost and responsibility to fix the problem.” “Moreover, Google is concerned by the prospect that court orders from a single jurisdiction can require the search engine to change its worldwide results Globe and Mail Dec. 11, 2016).”

So far, the Supreme Court sees only the little picture. Dissuaded by the threat to history and Google’s argument that the court doesn’t have global jurisdictions, Justice Rosalie Abella was sympathetic to arguments from Equustek’s lawyer.

“Just looking at it from the public interest point of view and the public perception point of view, you really think the public is going to line up behind the right to distribute internationally illegal contraband?” Justice Rosalie Abella asked, “What’s the harm to Google in preventing illegal activity in its wide distributive reach (Globe and Mail, Dec. 6, 2016)?”

If I may respond, Madame Abella, the harm in preventing illegal activity through the deletion of links is that search engines are not the problem. Google is simply shining a spotlight on the grimy nooks and interesting crannies of the world; some of them are illegitimate businesses that well-intentioned Equustek would like to eliminate; others that murderers, tyrants and presidents-elect would prefer remain unseen.

The Right to be Forgotten

Some struggle to be remembered. For others who wish to be forgotten, there is hope.

Before the internet, people lamented that they were faceless numbers. Now, with government surveillance, instant reporting by global news, we long for the good old days of obscurity.

forgotten

We are often victims of our own vanity. We willingly, and sometimes foolishly, throw compromising photos and private details all over social media.

The top European court has a solution, it would seem. The court ruled recently that Europeans have the right to be forgotten. That bad photo of you or news story of your drunk-driving conviction can be erased. In fact, anything, including flattering references can vanish from search results. If you don’t like it, it’s gone.

On closer examination, however, controlling your public image is more complicated than first imagined.

First, while the unwanted search results are gone, the original material is not. The court ruled that unwanted results be removed only from search engines. Obviously, the European court doesn’t have jurisdiction over global websites.

The consequence of the court ruling is like having a library in which the catalogue cards from certain books have been removed because someone didn’t like what was being said about them.  The books are still on the shelf and the objectionable webpages are still there for anyone to uncover.

The court ruling does not apply to public persons and rightfully so. Politicians chose public lives and their decisions affect the course of governments. To erase such references would be to erase history. But just who is public and who is private enough to escape scrutiny?  Should prominent businessmen, celebrities, popular citizens, notorious criminals or activists escape from view?

The whole thing is an administrative nightmare for Google who has to process the flood of requests for obscurity. They have the thankless task of possessing the millions of claims.

Then there is the right to know versus the right to obscurity. Do individuals in society have the right to hide information from everyone else? A Google administrator puts it this way:

“A simple way of understanding what happened here is that you have a collision between a right to be forgotten and a right to know. From Google’s perspective that’s a balance. Google believes having looked at the decision, which is binding, that the balance that was struck was wrong.”

As well, the court attempts to fix a problem that attrition would naturally take care of says Professor Meg Ambrose from Georgetown University. Only about 20 per cent of web content can be found a year later because Google algorithms rank pages according to popularity. “How do you hide a dead body?” goes the joke. “On the third page of search results.”

A lot of stuff on the web is simply too boring or irrelevant to endure the test of time (mine excepted, of course).

Lastly, this is the wrong way to go about implementing policy, Professor Ambrose told CBC radio. Laws should be enforced by the executive branches of government not through one-on-one negotiations between private citizens and corporations.