Murdoch and the tech Goliaths

BY SHUMA RAHA| IN Media Business | 12/10/2017
Helped by their role in muddying in the US election, Rupert Murdoch’s campaign to whittle away Google and Facebook’s supremacy is showing results.
SHUMA RAHA reports on this colorful story
Print screen: Buzzfeed

 

On November 1, Facebook, Google and Twitter are to testify before a US Congress Senate Intelligence Committee which is probing Russia’s alleged interference in the 2016 US elections.

For Facebook, the hearing could be particularly embarrassing. After months of strenuous denial that the social media network may have been used to influence the elections, it recently admitted that Russian-backed fake profiles bought about 3,000 ads around the 2016 election to stir up political unrest in the US. Facebook also said that the ads were viewed by about 10 million people in the US before and after Trump’s victory.

This week Google too revealed that Russian-linked entities bought thousands of dollars of politically-motivated ads on its platform around the time of the elections.

Coming as it does on top of the fake news scandal that muddied the elections, these revelations lend weight to a growing perception in the US, Europe and elsewhere that Facebook and Google are failing to control and weed out the evil that swirls about on their platforms. And while old media is clearly gleeful about big tech’s current discomfiture, one man, Rupert Murdoch, is probably doing a little celebratory dance, saying “I told you so.”

Murdoch, the big daddy of old media, and the octogenarian head of News Corp, which owns The Times, The Sun, Wall Street Journal, Fox News and a host of other print, broadcast, movie and publishing companies around the world, has been waging a relentless campaign against Facebook and Google. The Times in particular has run a series of investigative stories this year highlighting the internet giants’ dark, often unseen, underbelly.

"While old media is clearly gleeful about big tech’s current discomfiture, one man, Rupert Murdoch, is probably doing a little celebratory dance, saying “I told you so"

 

On February 9 this year, The Times Page 1 screamed: “Big brands fund terror through online adverts”. The story revealed that advertisements for brands such as Honda, Waitrose, Mercedes Benz, HSBC, Marie Curie (a hospice charity) and many others were appearing alongside YouTube extremist videos that propagate Islamic terror or neo-Nazi sentiments.

“An advert appearing alongside a YouTube video, for example, typically earns whoever posts the video $7.60 for every 1,000 views. Some of the most popular extremist videos have more than one million hits,” said the report.

It led to a furore and around 250 brands pulled their commercials from YouTube, incensed that their ads were being seen with inappropriate content. Google, which owns the video-sharing site, was using “programmatic advertising”, an algorithm-based system of loading commercials for viewing by seemingly suitable audiences. However, thanks to the flaws in the system, an ad for a car or a charity could also end up running alongside an Islamic State jihadi video.

Google apologised and claimed to have fixed the glitches in its programmatic advertising. Indeed, most of the advertisers who stormed out of YouTube have now returned to it.

But The Times has kept up its offensive against big tech. In story after story, it has hammered home the point that with great power comes great responsibility, and that both Google and Facebook were falling severely short when it comes to responsible oversight of their platforms.

Here’s a sample of The Times’sbarrage of stories on the crimes of Google and Facebook. A March 15 story,  headlined “Google: We won’t remove video that attacks Jews”, reported that Google had refused to take down a video entitled “Jews admit organising white genocide”.

Google said that though it was “borderline”, the video did not amount to hate speech. On April 13, a report titled ‘Facebook’s darkest secret: A Platform for paedophiles,” detailed how easy it was to access the raft of sexually suggestive images of children on its platform and get into paedophile discussion groups.

A June 7 report said that the UK’s three main political parties had withdrawn their election campaign ads from YouTube because they were found to appear next to Islamic extremist videos.

Facebook publishes torture used to extort ransom” (August 25, 2017) was another damning report which described how human traffickers were using the social media platform to broadcast pictures of migrants being tortured so as to extract ransom from their families; a story titled “Anti-Semites targeted by Facebook ads” (September 15, 2017) described its use for propagating anti-semitism.

This is hard-hitting journalism, no doubt. But the truth is, the reports also drive a hard business agenda. Facebook and Google together corner most of the global digital advertising pie. According to some surveys, in 2016 the two tech giants accounted for 89% of the growth in digital ad revenue in the US. Some put their combined share even higher.

News Corp - and indeed, every other media company which has seen its ad revenue erode -  would like nothing better than to break up this digital duopoly which sucks up the online advertising dollars and leaves the rest with little.

Showing them up as irresponsible profiteers who (unwittingly) promote hate, pornography and social and political damage is obviously one way of making public opinion turn against them.

However, Facebook and Google are not just gobbling up the news industry’s digital ad revenue. Most mainstream media depend on these platforms for the bulk of their audience and give away a lot of their content to them for free.

News Corp stands out among those who have resisted the blandishments of big tech. And for years Murdoch and his men have railed at the way these internet giants redistribute original content created by others without paying for it.

In a speech given in 2015, News Corp CEO Robert Thompson ridiculed Google’s newly christened parent company Alphabet, and said: "That Google's newly conceived parent company is to be called Alphabet has itself created a range of delicious permutations: A is for Avarice, B is for Bowdlerize, through to K for Kleptocracy, P for Piracy and Z for Zealotry."

Keeping up the anti-big tech rhetoric, last week Murdoch said that he would continue to fight against the “abuse” of the marketplace by some big tech companies. In a message to shareholders published in the News Corp annual report, he said, “This is an era where publishers - and the economy and society at large - are affected by the behaviour of a small number of technology companies.” These companies were “using their dominance to the detriment of many,” he added.

"Showing them up as irresponsible profiteers who (unwittingly) promote hate, pornography and social and political damage is obviously one way of making public opinion turn against them"

 

The drip drip of negative opinion against Google and Facebook started last year after it became clear that it had facilitated the spread of fake news in the run-up to the US elections. It seems to be gathering steam now.

In June this year, the European Union fined Google a record $2.7 billion in an anti-trust case after finding it guilty of having promoted its own shopping service above those of others in search results. News Corp was one among many other media companies which wrote a letter of support for the EU verdict.

Google has also been accused of blocking rivals in online search advertising.

Ahead of the congressional hearings, there is talk in Washington that the internet giants need to fess up to their responsibilities. Steve Bannon, alt-right megaphone and former White House chief strategist, recently said that they ought to be regulated like public utilities. Voices on the left too have long expressed concern that Facebook, Google or Amazon were throttling competition.

The opacity of online advertising is also a cause for concern, especially now, after disclosures that thanks to big tech, Russian-backed ads got a free pass to fish in the troubled waters of the US elections.

It is too early to tell if Google and Facebook will face regulatory heat. And if they do, it’s too early to say what form that could take, and how it could impact the way they function. Bear in mind that the big guys of Silicon Valley spend millions of dollars on lobbying the powers-that-be in Washington to make sure that their dominance remains unchallenged.

But Rupert Murdoch is likely to continue the fight to see them brought to heel. Indeed, News Corp’s tide of bad press against Facebook and Google may have had a small but significant payoff already. Sensing that public opinion may be turning against them, both internet companies are making conciliatory moves to win back the love of the news industry.

Last week Google announced that it was jettisoning its “first click free” policy where publishers who wished to appear on its search engine had to give readers free access to three articles a day. It said that in an effort to grow the digital subscriptions of publishers, it would introduce a more flexible system in which the publisher gets to decide how many free articles, if any, the reader can access.

Facebook too is adding a paywall to its Instant Articles facility which showcases articles from publishers. And for now at least, Facebook has said that it will not take a cut from the subscription payments.

The war between the news industry and the internet companies that have so disrupted it is about to hot up.

 

Shuma Raha is a senior journalist based in Delhi

 

 

 

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