(qlmbusinessnews.com via theguardian.com – – Wed, 13th Feb 2019) London, Uk – –
UK government backs investigation into dominance of Facebook and Google
Facebook and Google could be forced to open up their businesses and share details of how their advertising model works, after the government backed an investigation into concerns that their dominance of the online advertising business is hurting news publishers.
News outlets have long complained that Facebook and Google, which together account for the vast majority of digital advertising in the UK, have sucked out billions of pounds of revenue that previously supported the cost of journalism.
The culture secretary, Jeremy Wright, told the House of Commons on Tuesday that he had asked the Competition and Markets Authority to launch a study of the “largely opaque and extremely complex” world of online advertising.
The study could lead to a full-blown investigation, which would allow the competition regulator to use its legal powers to obtain information from the secretive technology companies.
The recommendation to launch the inquiry was included in Dame Frances Cairncross’s report on the future of the press, which was released on Monday.Advertisement
News outlets have struggled to compete with the scale and targeted advertising offered by the technology companies, which have an enormous amount of data about their users.
Wright, who has previously insisted he does read newspapers, also said he had asked the Charity Commission to investigate Cairncross’s recommendation for a form of charitable status for news outlets that focus on local and investigative journalism.
The cabinet minister told the Commons that civil servants in his department would also conduct a separate investigation into the regulation of the wider online advertising market, which posed “social and economic challenges” in its current state.
This Whitehall investigation could result in a regulator being given new powers to oversee the online advertising marketplace, in line with the government’s wider policy of ensuring the rules and regulations that apply to offline institutions also apply to their internet equivalents.
Wright also said he would ask the media regulator, Ofcom, to examine whether the BBC was harming for-profit local newspapers by invading their turf and publishing material for free.
However, he appeared to be less enthusiastic about Cairncross’s recommendation that the government should establish an institute for public interest news to promote investigative and local journalism, which would distribute money from the state and other donors to support local reporting.
Labour broadly welcomed Wright’s announcements, although the shadow culture secretary, Tom Watson, urged the government to avoid targeting the BBC as part of its overhaul, suggesting that in some communities the public broadcaster was the only outlet that still employs journalists to do basic reporting of local politics.
Watson also told the Commons he was tired with the reluctance of the major technology companies to submit themselves to parliamentary scrutiny.
“Even in these dark days of Brexit and increasing division in politics, there is one man who is uniting this house: Mark Zuckerberg,” the Labour MP said. “He insulted us all when he refused to attend the [Department for Digital, Culture, Media and Sport] select committee. He may think the UK market and our institutions are not a priority for him. But I hope he knows there is now a new resolve that transcends our party differences to deal with the abuses by his company and others.”
Several Conservative MPs criticised Facebook and Google, with the former cabinet minister Iain Duncan Smith calling for the “monopoly cartels” to be broken up because they were “damaging to people as individuals, and damaging to the functioning democratic society”.
However, the National Union of Journalists general secretary, Michelle Stanistreet, pointed out that many local newspaper cuts were a result of publishers slashing costs to maintain their profit margins.
By Jim Waterson