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Do We Need to Regulate Facebook and Google?

Stan Ward

Stan Ward

August 8, 2017

“Google and Facebook are utilities, full stop – as fundamental to modern life as telecommunications, energy, banking, water and milk.” So says a business article in The Australian. The article laments the fact that “real” journalism is being supplanted by the “hobbyist” version thanks to millions of people “writing” what passes for news on Google and Facebook. Google and Facebook have become so pervasive that many bodies are calling for them to be treated and regulated as utilities.

Currently, President Trump and his acolytes are working to deregulate big broadband companies in the US. Meanwhile, a key Trump White House operative and trusted advisor, Steve Bannon, is posturing to regulate the Silicon Valley giants as utilities. His rationale: they have become essential elements of 21st-century life, which places them on a par with regulated necessities like water, electricity and even sewer systems.

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According to Bannon, there is something about an online social network or a search engine that lends itself to becoming a natural monopoly. This is something from which the public must be protected. In Google’s case, now that its parent Alphabet has broken it up into parts, only the search engine would be considered for regulation as a utility.

Under Obama, the FCC proceeded to regulate Internet Service Providers as utilities. This thwarted them from slowing down traffic to certain sites in order to pressure them into paying higher fees. Since the Trump administration is seeking to reverse that, it runs counter to Bannon’s argument to regulate internet companies such as Google and Facebook. Of course, chaos and confusion are nothing new to this White House.

Bannon’s argument is supported by the viewpoint of Facebook founder and CEO Mark Zuckerberg. He referred to his company as a “social utility” (as opposed to a social network) going back 10 years or so. It even became part of the company’s panache and slogan. Could those words come back to bite him?

In a 2007 interview, Zuckerberg stated that, “We always try to emphasize the utility component.” Facebook has shifted away from such characterizations over the last decade. Its explosive growth has enabled it to hire an army of attorneys to dissuade such talk. However, the genie is out of the bottle – and not just from Bannon’s mouth. The aforementioned article in The Australian concurs, though with the caveat that utilities by their very nature are not under pressure from competitors, while Google and Facebook are.

If you consider pricing alone, the two tech titans need no regulation based on fears of rising prices. The danger as experts see it (as well as the government tax authorities) is they are price cutters. Thanks to supply and demand, the price that advertisers can charge is constantly decreasing, as content inexorably increases. Much to government’s chagrin, less ad revenue means less tax revenue. However, revenues going into the government coffers aren’t the big worry.

The concern is that posters on Facebook and Google are “reporting” on “news” that may not be news, but by virtue of it being published somewhere it finds itself on the search engine and treated as news. This is at the expense of what the article refers to as legacy journalism, or real news. This legacy journalism is being priced out of the market by the price-cutters – Google, Facebook, and their ilk. Legacy journalists got rich off advertising revenues, but at least they published meaningful, honest, “real” news.

Hence the push to regulate Google and Facebook like utilities. The problem is: How do you regulate price-cutters? Also, as in the net neutrality debate, what steps do you take to throttle free enterprise?

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Much has been made of President Trump resorting to tweets to get his message out because he feels the legacy media – the mainstream media – isn’t fairly reporting stories, or is overly biased against him. What will happen if “honest” legacy journalists become even more marginalized? Maybe Trump isn’t so dumb after all for bypassing them with tweets. Perhaps he is merely staying one step ahead of them.

Personally, I think that regulating the Googles and the Facebooks of the world has as much chance of happening as net neutrality has of remaining untouched and in its present form. That is to say, none.

Opinions are the writer’s own.

Image Credit: NextNewMedia/Shutterstock.com

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