Category Archives: Society

Arts, Britain, Culture, Government, Media, Society

Probe launched into online giants

CULTURE & MEDIA

GOOGLE and Facebook are facing two new probes into their “opaque” advertising business amid Government fears that they are making it impossible for online news publishers to survive.

. See also The demise of the printed press?

Culture Secretary Jeremy Wright said he had written to the Competition and Markets Authority (CMA), asking the watchdog to investigate the “digital advertising market” and see whether it prevents “fair competition”.

And he announced a formal probe by the Department for Digital, Culture, Media and Sport into how online advertising is regulated.

He also took aim at the BBC, calling on regulator OFCOM to consider opening a formal investigation into the size of its online news website. He asked the media watchdog to look at whether the broadcaster is “striking the right balance” between pushing its own content and driving traffic to commercial news websites.

The investigation comes after a damning report said online journalism is “at risk” because of the stranglehold the web giants have on the online advertising business.

The Cairncross Review, commissioned by the Prime Minister, and led by Dame Frances Cairncross, called for the CMA and OFCOM inquiries as it warned that Google and Facebook have become too powerful and too secretive.

At the moment, online news providers struggle to make ends meet because Google and Facebook hoover up so much of every pound spent on advertising on news websites.

The web giants keep their algorithms – the computer codes that dictate the order of search results – closely guarded secrets, but even the smallest changes can have a huge impact on the amount of traffic news websites receive and their ability to make money from their content. Google and Facebook control so much of the online advertising market that they can simply “impose terms on publishers”, Dame Frances said.

Mr Wright has now thrown his weight behind her report. In a Commons debate about the review, he said: “Online advertising represents a growing part of the economy and forms an important revenue stream for many publishers.

“But this burgeoning market is largely opaque and extremely complex, and therefore it is at present impossible to know whether the revenue shares received by news publishers are fair.”

He said the CMA probe would “examine whether the online marketplace . . . enables or prevents fair competition”.

Mr Wright added that his own department will conduct a review into “how online advertising is regulated”.

Some Conservative backbenchers have called for even more draconian measures. Former Tory leader Iain Duncan Smith said the social media giants need to be “broken up”. “This kind of monopoly cartel is damaging to people as individuals, and damaging to the functioning democratic society”, he said.

Sir Edward Leigh MP, said: “I think we’re being weak with these American tech giants . . . they are a monopolistic, anti-competition force in our society.”

In her review, Dame Frances said the web giants should have to sign up to a new code of conduct – overseen by a regulator – to ensure they deal with publishers fairly, and Google and Facebook should disclose how much of every pound spent on online advertising reaches the publisher.

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Arts, Britain, Culture, Government, Media, Society

The demise of the printed press?

CULTURE & MEDIA

JOURNALISM, whether in print or online, is in the grip of a crisis. Local newspapers are especially vulnerable, but the national press, too, is badly affected.

As a result of the inexorable rise of the internet, print circulation has fallen, in most cases dramatically. Most publishers have launched online newspapers, some of which have built up vast new readerships.

Yet, revenue streams have decreased significantly across the board. However successful some online news operations may be, they have been unable to make up the shortfall caused by the rapid decline in circulation of the printed press, which have traditionally enjoyed revenue from both advertising and print sales.

It has been against this background that Frances Cairncross was asked to write her report. Even in government, some are alarmed by the prospect that a weaker Press, whether national or local, will find it harder to fulfil its democratic role of holding the powerful to account.

As Dame Frances has noted, for example, there are already some towns where court proceedings, or the behaviour of unscrupulous and dodgy businessmen, are unexamined because the local newspaper has closed.

In analysing the huge problems being faced by the Press, this review – in terms of its understanding of the crisis and its causes – can scarcely be bettered. Dame Frances has brought to bear all her forensic skills as a distinguished former journalist.

She is acutely aware that publishers with reduced resources will be unable to undertake time-consuming and costly investigative journalism. It remains a fact that newspapers break many more important news stories than the habitually cautious BBC. What will happen if they are no longer able to?

One area within the review that doesn’t go far enough is in recommending curbs for the web giants – in particular Google and Facebook, although Dame Frances does put forward some proposals.

While traditional publishers struggle, these behemoths are laughing all the way to the bank. One of their obvious advantages is that they pay much less tax than established media companies.

But they also enjoy massive advantages in global and national advertising markets, which they increasingly dominate to the detriment of newspapers. Crucially, “programmatic advertising” which is sold through multiple intermediaries – many controlled by the all-powerful Google – operate via online auctions where they are sometimes both a buyer and a seller.

News is also filtered by Google and Facebook through the opaque use of algorithms that’s little understood in the wider world. An online publication may be discriminated against by these web giants – in other words, its website may effectively be censored or difficult to find.

And, of course, Google and Facebook refuse to pay for disseminating papers’ news coverage. While they make money out of this operation, publishers who bore the original cost of newsgathering get nothing. On all these tangled but vital issues, Dame Frances gives a mixed response. Unfortunately, she rejects the idea that publishers should be paid for having their stories recycled by the likes of Google and Facebook, on the grounds that such a process would be too complex.

To be fair, she does address the vexed subject of programmatic advertising by powerfully proposing that the Competition and Market Authority (CMA) should take a long-overdue look at it.

But as far as the algorithms are concerned, she suggests a pledge “might” be made by Facebook and Google “to give publishers early warning of changes to algorithms that may significantly affect the way in which their content is ranked”. That’s fine as far as it goes, but it’s not far enough.

Her report is also too indulgent of the BBC, whose publicly-funded, all-singing website is read by 43 per cent of the adult population every month. This inevitably undermines online newspapers and other publications. Dame Frances prevaricates on the issue by suggesting that media regulator OFCOM should consider it.

 

ONE worthy suggestion is that government subsidy of local and regional newspapers be increased. That sounds fine until one reflects that it’s far from ideal for newspapers to be dependent on the State, however benevolent the reasoning. Wouldn’t they benefit more if Google and Facebook and the other web giants were cut down to size?

And that really is the logical conclusion of this report. Despite what some may say, the future of the printed and online Press need not be one of contraction.

Decline is not a certainty. Newspapers can still have a successful and profitable future. But only if the Government has the courage and single-mindedness to stand up to these utterly unscrupulous and multinational tech giants.

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Britain, Economic, European Union, Government, Politics, Society

The EU has a natural propensity to haggle

BREXIT

LONG before the people of the UK voted to leave the EU in the 2016 referendum, before the term Brexit had even been coined, it was Grexit that was preoccupying the minds of Eurocrats.

Greece came close to crashing out of the single currency on at least four separate occasions after a vast black hole opened up in the country’s accounts in 2009.

At one stage in 2012, the British banknote printers De La Rue was asked by the government in Athens to make contingency plans to print new drachma notes (Greece’s pre-euro currency) in preparation for what many called the “Double D” solution to the economic problems Greece was facing: default on the country’s debt and devaluation with the return of the drachma.

Today, Greece remains one of the 17 members of the eurozone – and this fact alone should lift the spirits of the UK negotiators. Armed with her newly acquired Parliamentary majority, Theresa May returns to Brussels seeking at the very least to put a time limit on the Irish backstop deal she signed up to.

Each time a Greek default loomed into view, threatening the stability of the eurozone and raising the possibility that Italy or one of the other member countries might also head for the exit, the main protagonists – the hard-line German-dominated European Central Bank (ECB) in Frankfurt and the European Commission in Brussels – caved in and authorised a bailout.

Last-ditch negotiations, usually conducted over a weekend when the financial markets were closed, would typically go into the early hours of Sunday morning.

Late-night deals were hatched against a backdrop of TV screens showing central Athens on fire and anti-austerity protesters ripping up flagstones in the capital’s Syntagma Square.

The first £38bn bailout was agreed in the dead of the night on April 23, 2010, by the troika of the ECB, the European Commission and the International Monetary Fund. It was one of several rescue packages for Greece, some of which required a change of government to get them over the line.

 

WHAT happened to Greece is typical of the Eurocrat tendency to fudge, to muddy the waters and eventually to seek compromise in a crisis situation.

Indeed, the history of the EU is littered with examples of Britain locked into eleventh-hour talks with eurocrats as the UK has sought changes in our terms of membership.

John Major worked through the night in 1991 to secure Britain’s opt-out from the social chapter of the Maastricht Treaty which would have dictated working conditions in Britain and could have undermined the labour market reforms pioneered by his predecessor Margaret Thatcher. Indeed, she herself was a fierce negotiator in organising rebates from Brussels from the UK’s oversized contributions to the EU budget. In 1984, in the imperial grandeur at the historic palace of Fontainebleau in France, European leaders painfully conceded the famous British EU budget contribution rebate – or as the French sarcastically called it “le chéque Britannique”.

And let’s not forget that in the teeth of his promise to hold an in/out referendum, David Cameron returned from Brussels in the early hours one day in February 2016 with draft reform proposals agreed by European Council President Donald Tusk which he claimed would give Britain “special status”.

In the event, the pledges made by Brussels were so anaemic that they failed to convince British voters that sovereignty could be maintained by voting remain – a huge mistake by the eurocrats who failed to recognise the strength of anti-EU feeling among large swathes of the UK population.

Both in national negotiations and in commercial transactions, reaching an accord more often or not comes down to the wire.

With the clock now ticking inexorably to March 29, the desperation of the leaders of the other 27 EU countries to avoid an economic and financial crisis at the very moment that Germany and the eurozone are facing the bleak prospect of recession may be Theresa May’s best hope. This is regardless of how unyielding Brussels negotiators have been to date and their willingness to play havoc with business confidence and financial stability by its brinkmanship.

 

THE potential loss to Brussels of a £39bn one-off payment to a Commission cash starved as it is following years of economic slowdown, could potentially be a bargaining chip for the Prime Minister in the last-chance saloon.

In the final analysis, the anecdotal evidence of what the late-night sessions in Brussels, Nice, Maastricht and other destinations should tell us, is that it’s Germany and, to a lesser extent, France which decide.

Besieged by increasingly hostile populist movements, neither Berlin or Paris will want to make political life tougher than it already is.

The politics of the EU, at their most raw, are little different to those of the bazaar. The natural tendency should be now to relish an aggressive haggle but then, eventually, to compromise.

. See also Should we really despair over Brexit? Europe is in a mess.

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