How to cut the tech behemoths Facebook and Google down to size

You go away for a few hours to host a Reaction event for readers – with Professor Niall Ferguson, on his ace new book, at White & Case in the City on Friday lunchtime – and two of the best writers on our site launch kamikaze attacks aimed at opposite ends of the ideological aircraft carrier.

Walter Ellis wrote for Reaction that because the UK productivity figures were spun to the FT as having been wrong for years (under George Osborne) that means that, having got the figures wrong for years, their predictions of future doom must be right. This means that Britain is buggered, concludes Walter.

Meanwhile, Gerald Warner, in his latest piece for Reaction, after a counter-intuitive opening paragraph sympathising with Mrs May over her cough, launched a full-scale assault on the Tories in general and David Cameron in particular. Cameron hates the Tory party, he says. No, he doesn’t, Cameron devoted years to getting it elected, and succeeded in that effort until the referendum…

Jacob Rees Moog, the Tory star of the moment, also seems very down on the Tory modernisers. His party went down hill from 2010 he said in one of his packed out fringe meetings at the Tory conference in Manchester this week. Was Jacob around between 1992 and 2010 at all and paying attention while Labour won three election victories before Cameron turned up? Gerald goes even further than Jacob Rees Mogg. Gerald writes that the Tory party is at death’s door (it may be, if it does not attract more voters below the age of 45) and the country is, from a different perspective to that argued by Walter, utterly buggered.

Come on… take a chill pill, or pour yourselves a large gin and tonic…

For I am here with a strong dose of good news. No, it is not a special news filter for your phone and television that blots out any mention of the shambolic shenanigans of the Tory party or of President Trump. Neither is it news of a taxi for Grant Shapps MP, leader this week of the worst political coup since Labour’s Geoff Hoon tried to take down Gordon Brown after he misheard “you must stop, Geoff” as “over the top, Geoff.” Nor is it a thunderbolt for ultra-loyalist Tories pretending that all is okay with their leader, because it was Shapps having the first go, when it is obvious to anyone with the slightest political judgement that Theresa May is a decent person who is nonetheless currently stuck in the departure lounge of politics.

No, my good news is for those of who care about a key battle to come in the titanic tussle between, on the one hand, democratic forces and media, and on the other the American tech giants who have become far too big and powerful.

Niall Ferguson’s new book, about which he came to speak to Reaction readers, is about networks in history. It is a terrific read. But, as he makes clear, those who think that the process of disrupting hierarchies, as tech has so stunningly done in the last 20 years, will somehow have a lovely impact are in for a major disappointment.

Facebook and Google have carved up the massive and growing online advertising business between them. They hoover up 90% of new ad dollars. For anyone who cares about the survival of a properly resourced and independent media, that plays a part in holding politicians and the powerful to account, this is a catastrophe. Their rise has shuttered newspaper across the US, and depleted newsrooms. In Britain, whole swathes of life – the goings on and personalities in local government, justice, prisons, education, charities, the arts, the armed forces – are now chronically under-reported because only a few titles with owners committed to journalism fund sufficient reporting. Elsewhere, power gets a free pass while tens of millions of people share utter piffle and moronic memes on their phones.

Let’s be blunt. Facebook and Google only managed to pull off this coup because they get their content for free, from users and stolen from established media that’d to pay for it, and then sell advertising on the back of it to their customers by following them around and spying on them.

There is much talk lately about how higher tax and the comically slow efforts of the EU will rebalance the situation and cut big tech and the “Valley” down to size. This spectacularly misses the point.

I think the key fight is going to involve forcing the recognition that these companies are not networked platforms on which others publish. They are publishers, and they should be responsible for the information and images they spread as surely as if they chopped down trees, printed stories on paper and sent them round the country in lorries.

The awareness that they have made so many hundreds of billions because of a daft anomaly, in the US the 1996 communications legislation, which permits them to deny any responsibility for what they carry, explains the terror of the tech giants when they come under pressure on terrorist material. As Niall Ferguson put it during our conversation: if they admit they have a responsibility not to show gruesome ISIS videos, they have crossed into the realm of editing and are acknowledging they are publishers. In that case why not check everything else to ensure it does not contain libel, or defamation, or breaches of ethics?

The good news? Pressure is building on the chino-clad, utopian, tech billionaires to play by the same rules as other publishers. Michael Bloomberg, the former mayor of New York and creator of the financial news publisher that carries his name, suggested recently that Facebook should read everything before it is published. But… but, responded Facebook fans… that’s crazy, who does that? We do, all proper publishers read and edit for the law and ethics before publishing because publishers are legally responsible, responded Bloomberg.

Expect test cases in the US, as lawyers and victims go after the tech giants for damaging material posted on their platforms. And an awakening appears to be underway in Washington, on both sides of the political divide. The Democrats got hacked and lost in 2016 in part thanks to digital chicanery made possible by Facebook. The Republicans realise, too late, that Silicon Valley and the tech crowd hate them, and big tech having let in Trump by accident last year it will tweak the algorithms for next year’s mid-terms and 2020’s presidential contest against the interests of the Republicans. Washington is coming after big tech. Look out in London’s courts too. It is going to be a festival for lawyers when they wake up to that has been going on.

What does this mean? A potential reversal or course correction that rebalances media. Combined with new micro-payment systems, and subscription, it may create a chance for the flourishing of more good journalism in established outlets, and in many new outlets, by taking down Facebook’s ad-based business model and opening up the ad market to others once again. Facebook and Google will fight like mad to resist because they risk getting caught in a legal tangle from which it will be hard to escape without significant changes to the way in which they and the media market operates. This is potentially very good news if you want a diverse and responsible media and less fake news funnelled through Facebook.

See, some good news.

There will be more analysis from me over the weekend on the Tories and their leadership travails as I hear it. Sorry, in advance.