Tuesday, May 28, 2024

OPINION AND ANALYSIS | 24-09-2022 06:00

A Holy War is raging between Google, Facebook, and the media industry

The power that Google, Facebook and a few other companies hold over the information ecosystem, where they’ve become the de facto gatekeepers, is troubling. Ultimately they've taken over an editorial role that used to be controlled by media companies, in particular news publishers.

For several years now the mainstream view regarding major technology companies like Alphabet (Google) and Meta (Facebook) is that they’ve become too powerful and that governments and regulators must do something about it. One of the major sticking points has to do with self-dealing that generates monopolistic moats that become so entrenched that essentially cannot be challenged. There’s also a deep concern regarding user privacy and the use of massive troves of data the likes of which humanity has never seen. 

The power that Google, Facebook and a few other companies hold over the information ecosystem, where they’ve become the de facto gatekeepers, is troubling. Ultimately they've taken over an editorial role that used to be controlled by media companies, in particular news publishers. The confrontation between the media industry and certain Silicon Valley giants has pushed the debate regarding the power of Big Tech to the foreground, in great part because of the loss of potential revenue suffered by publishers and absorbed by these firms, but it has fuelled a healthy conversation that puts the role of technology in the 21st century under a critical eye. Yet, while regulation has moved forward in several countries, it seems like we are nowhere nearer to figuring out what and how to regulate. In Argentina, for example, the aftermath of the assassination attempt against Vice-President Cristina Fernández de Kirchner has led to calls to stifle hate speech online, but the political actors pushing for this have no idea what they’re talking about, essentially looking to censor media companies who hold opposing views.

The pressure has been mounting on major tech companies in great part because of Europe. What began with the EU Copyright Directive – which gave journalistic producers in the Internet an ancillary right that gave value to their content – has now expanded to an all-out anti-trust war. In charge of this onslaught is Margrethe Vestager, the European Commission’s Commissioner for Competition. “Europe is open for business, but there is a rulebook, and it’s for everyone,” she recently told Wired. “We have had three Google cases already, we have another Google investigation pending on Google’s advertising technology, we’ve had two Amazon cases already, and now have a third, we have a Facebook case pending, and three Apple cases,” she enumerated. Alphabet just suffered a tough setback after the European Court of Justice’s General Court upheld a US$4-billion fine, while Meta was recently fined over US$400 million - a record for violating Europe’s GDPR privacy law. Yet, these figures are mere drops in the ocean for corporations that have sales that are multiple times the GDPs of smaller-to-medium sized countries. Alphabet clocked sales for US$260 billion in 2021 (92 percent of it in advertising dollars) while Meta raked in US$120 billion (97 percent from ads).

This debate made its way to the Annual Assembly held by ADEPA, the Argentine media association, in Calafate this year. Diego Garazzi, La Nación’s chief legal counsel, used Newton’s laws of motion to make an analogy of where the situation stands. First, a body must be put into motion, it will reach a speed proportionate to the force applied to it, and it will generate an equal and opposite reaction once it hits another body. Thus, the showdown between Big Tech and the media industry was first set into motion by calls for regulation, gained speed and then resulted in a confrontation that has brought the Googles of the world to the negotiating table. The passing of laws forcing negotiations or lawsuits between platforms and media companies in the European Union, Australia, and Canada, to name a few, has triggered certain agreements, such as the Showcase (Alphabet) and News Tab (Meta) development announcements in several countries.

Moving forward, it seemed like these companies were building working relationships with the media industry by which they would begin to pay for the use of journalistic content, but a storm may be brewing. A few months ago The Wall Street Journal reported that Meta told major US publishers it would cut funding for News Tab amid a generalised context of malaise in the advertising market. This comes hand in hand with a general paradigm shift in global markets as a consequence of recessionary tendencies and a rise in interest rates by major central banks, which suggests an end to easy money and cheap credit that will definitely affect private sector profitability. Big Tech has been on a spending frenzy for years, partially interrupted by the 2008 financial crisis – now, it appears it is time to focus on the bottom line. Already throughout Latin America there have been rumblings between media associations and Google and Facebook’s parent companies, which could presage a more generalised move away from the current stance of throwing a little money at major publishers to keep them at bay.

These companies are more afraid of bad press and potential future legislation than fines. That’s why the issue of hate speech hits at the heart of their business models and future projections. The use of algorithms to serve content has created certain vicious cycles that have exacerbated hate speech and led to a rise in extremism and even mass shootings, as mentioned in a previous column about Cristina’s attacker, Fernando Sabbag Montiel, and the QAnon movement in the aftermath of the Capitol Hill riot in the United States during the last days of Donald Trump’s Presidency. 

Google, Facebook, YouTube, Twitter and other platforms use a mix of artificial intelligence and human moderation to limit the proliferation of dangerous content. But it is almost impossible to deductively ascertain what is hate speech, as constitutional law expert Carlos Laplacette explained during his talk at the ADEPA assembly. Not only that, there seems to be a certain feedback loop between the spreading of fake news, the surge of clusters of hate speech and the call for something to be done, which almost always results in some sort of body that determines what is and what isn’t allowed. Freedom of expression is always under attack whenever someone can determine what is valid and what isn’t. Thus, if major platforms are blamed for the content that is distributed and accessed through their products, and asked to censor certain content or face major fines, they will be in a pickle. What if they can’t figure out what content to block out quick enough? And what if they are later accused of violating freedom of expression for it?

The world’s tech elite is composed of a handful of companies including Alphabet, Meta, Apple, Amazon, Microsoft, Alibaba, and a few others. (In Latin America we could include Mercado Libre). These firms are hugely profitable and have added incredible value to our lives, but they wield massive amounts of power like no corporations ever before, from transnational status to control over products that are directly connected to how we make decisions. The stakes are incredibly high, but current uncertainty ultimately plays in favour of preserving the status quo, and their inherent advantages.

Agustino Fontevecchia

Agustino Fontevecchia


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