By Dr Gavin Ellis*
Opinion - Prime Minister Jacinda Ardern is rightly being praised for her handling of the Covid-19 pandemic but she needs to get over her millennial attitude to social media and join Australia in making them pay their way.
Canberra has announced a tough mandatory code to make Facebook, Google and others pay for the news content that have been pillaging from news media's digital platforms. New Zealand should do the same, preferably adopting the same code for a trans-Tasman approach to regulating companies that thought they were beyond the reach of mere governments. So far, our government has gone no further that saying 'we're looking at it' but characterising it as 'a longer-term measure'.
Australian Treasurer Josh Frydenberg wants a code developed by July and, if the tech giants do not negotiate payment rates in good faith, rates will be imposed. There will be heavy financial penalties for non-compliance. Expect the code to be in place before the end of the year.
Frydenberg is reflecting the frustration that the Australian Competition and Consumer Commission expressed in trying - and failing - to implement a voluntary payment system. The ACCC was tasked with facilitating a voluntary regime last year after the federal government's social platform enquiry found Facebook and Google were using an unregulated space to cannibalise and proﬁt from content produced by the news media. Google and Facebook only paid lip service to negotiations with the media companies. Now they have no choice but to come to the table or face the consequences. And it's about time.
Internationally, the social media giants contrive to avoid both tax and regulation, to say nothing of providing platforms for the spread of disinformation - most recently about Covid-19.
Jacinda Ardern talked tough after the live streaming of the Christchurch mosque shootings and made some headway in encouraging the large social media platforms to more closely monitor such content. However, they agreed only to act in ways that had the least impact on themselves. Otherwise, it was business as usual.
And that business is doing harm - perhaps terminal harm - to New Zealand's mainstream media companies now reeling from the vertical drop in advertising revenue during the Covid-19 lockdown. Foreign social media companies are siphoning off a minimum of three-quarters - some say 90 percent - of the $1.26 billion spent on digital advertising in this country.
Yet the Prime Minister's reaction to calls - mine included - to redirect to local media the Government money spent advertising on Google and Facebook was a flat rejection: "We need to be present where people are".
Of course the government needs to reach people, especially in perilous times. It does not need Facebook and Google to do that.
Oh, it might need Facebook, Twitter, Instagram, Snapchat, WeChat and TikTok to 'talk' directly to supporters and potential supporters. The president of the United States does so every day on his medium, of choice - Twitter.
Such use, however, has less to do with 'reach' and more to do with the fact that the platforms can be used to deliver political messages without the irksome intervention of journalists who might ask awkward questions.
When it comes to advertising the functions of government, and messages associated with them, local media can provide all the 'reach' the government needs.
The fact that all news media report unprecedented demand during the Covid-19 pandemic did not seem to impress the Prime Minister, doubtless seduced by the belief that 18-54 year olds don't access traditional media. However, if the 'target audience' does not pick up a newspaper and watch or listen to news bulletins, they are certainly exposed to traditional news content through digital media.
In the week the lockdown was announced, the five traditional media organisations - Stuff, NZME, TVNZ, MediaWorks and Radio New Zealand - together reached 32 million unique browsers on their own websites. To that can be added the same content shared on social media and, of course, their traditional forms of delivery.
There is no reason why government advertising cannot be embedded in those news stories and carried wherever they may go - but the money stays with the organisation that created the content. As it stands, the amount the government spends on sites like stuff.co.nz and nzherald.co.nz (the two largest news sites) is a pittance.
And, if we go back before the pandemic, was the money spent on Facebook in search of 18-54 year olds well-spent anyway? A recent New York Times article (on Facebook's Covid-19 resurgence) described its pre-pandemic status in these terms: "Facebook could feel at times like the virtual equivalent of a sleepy bingo parlour - an outmoded gathering place populated mainly by retirees looking for conversation and cheap fun". In other words, it wasn't the audience everyone was paying for. That's a good reason for re-directing of government spending into our own news organisations.
Re-direction, and forward spending on government advertising were two suggestions for immediate aid to a vital industry that is sinking to its knees in the lockdown.
The Australian initiative on payment for content use is a longer term and potentially more rewarding measure. It should embrace public and well as private sector media as both pay to generate content that is appropriated by social media. And, on the face of it, the social media platforms will have no choice to comply. The threatened financial penalties for non-compliance are likely to be onerous (even for them).
There is, however, one worrying dimension to the tech giants' behaviour that could yet thwart Josh Frydenberg's entirely equitable plan: Their ability to use every trick in the book to avoid compliance.
And the trick they have up their sleeve is encryption. In 2014 Facebook acquired the end-to-end encrypted messaging service WhatsApp for $US19 billion. That service now has more than two billion users globally and monitoring of its content is well-nigh impossible. It has become a prime mechanism for spreading disinformation, in spite of moves to limit the number of direct contacts. Network connections allow for exponential growth from small beginnings.
Facebook has signalled its desire to widen its use of encryption which, it says "is helping to protect you from hackers and criminals". Could it also protect Facebook from the effects of a mandatory payment code? US Attorney General William Barr has voiced concerns about encrypted messaging being used by criminals and terrorists, but this may not stop a move to encrypt it. There are no certainties over policy in the Trump Administration. A perception that an American company was being picked on by 'foreign powers' might lead, for example, to turning a blind eye to its attempts to avoid 'being picked on'. The Administration might justify such an attitude by pointing out that the Dark Web, not mom-and-apple-pie social media platforms, is already the preferred delivery system for terrorists and criminals.
If Facebook did become an encrypted service (no doubt on the pretext of user security) it should mark the parent organisation as an outlaw - someone beyond the law - because that is where, effectively, it would be. And the only business a government has with outlaws is to call them to account.
*Dr Gavin Ellis is a media researcher. This commentary appeared on his website www.whiteknightnews.com