Facebook restricts Live streaming access

Facebook has introduced new restrictions on its video streaming platform, Live, suggesting those who break other Facebook policies will be banned for a period of time.

The move comes in response to the live broadcast of the terrorist attack in Christchurch, New Zealand. The social media platform broadcast the incident for 29 minutes, with around 200 people viewing the content, before it was cut. After heavy criticism, Facebook needed to act in an attempt to prevent a repeat of such a broadcast.

“Following the horrific terrorist attacks in New Zealand, we’ve been reviewing what more we can do to limit our services from being used to cause harm or spread hate,” said Guy Rosen, VP Integrity at Facebook.

“As a direct result, starting today, people who have broken certain rules on Facebook – including our Dangerous Organizations and Individuals policy – will be restricted from using Facebook Live.”

Although some might suggest this is a potential limitation of free speech principles, Facebook has had to do something about the grey areas. It is unreasonable for moderators to view and approve every piece of content, while artificial intelligence technologies are still not advanced enough to tackle the problem. Taking a merit approach, removing privileges from those who already break the rules, is a less-than adequate approach but one of the few options without shutting down the feature completely.

The ‘one strike rule’ is a tightening up of rules which already existed. Facebook has been limiting the access of those who break the platforms rules, though this is a much more stringent approach specific to the Live feature.

“From now on, anyone who violates our most serious policies will be restricted from using Live for set periods of time – for example 30 days – starting on their first offense,” said Rosen. “For instance, someone who shares a link to a statement from a terrorist group with no context will now be immediately blocked from using Live for a set period of time.”

This is an incredibly difficult equation to balance, and this is not a perfect approach. It is still reactionary not preventative, but it should limit the risk. Unfortunately for Facebook, and everyone in general, whatever is done to attempt to limit these abuses, and technological abuses in general, will only be hurdles; there will always be a way to get around the safeguards.

The only way Facebook can prevent a repeat of this incident is to shut down Live completely, however, the vast majority of those using the feature are doing so as intended. More work needs to be done, but Facebook is attempting to make progress.

Facebook financial foray flops face first

Facebook has killed a feature which allowed users to pay connections through its Messenger app due to a lack of uptake.

The idea was a relatively simple one; Facebook’s Messenger app could be used to transfer funds between connections. The banks clearly thought it might be a goer, all the major institutions in the UK signed up, though a lack of consumer interest led the social media giant to pull the plug.

“The Facebook messenger functionality got all of the major UK banks on board when it was launched in 2017, but consumer uptake never took off,” said Oliver Wintle, Banking Analyst at GlobalData. “GlobalData’s 2018 Retail Banking Insight Survey found that 55% of users in France and 71% of users in the UK have never used Instant messaging to complete banking tasks.”

Why this feature failed to capture the attention of consumers is down to interpretation, GlobalData is suggesting it is simply down to breadth and depth. Considering how accessibly banking apps are nowadays, and the additional features which are available in the banking apps themselves, Facebook seemed to be addressing a problem which didn’t exist in the eyes of the consumer.

Another factor which you have to consider is the credibility of Facebook. Over the last 18 months, the social media firm has been central to a number of scandals, all of which has damaged the reputation of the brand. Asking consumers to trust Facebook in handling financial transactions, dealing with real money, might have been a step too far.

Facebook might be able to ask for user’s birthday or for data on their interests, but this is different to asking for financial information. In facilitating payments, Facebook is asking users to trust it with their hard-earned cash. To do this you have to have a lot of credibility in the bank.

While Facebook has certainly tarnished its reputation, it might also be the case no social media brand has the repute to introduce such an initiative yet. 55% of users in France and 71% of users in the UK have never used instant messaging to complete banking tasks, suggesting users do not view these platforms in this way.

Alongside the credibility issue, numerous telcos have launched features which allow customers to pay their contacts through text. Although this has the potential to fail in the same way Facebook has done, a lack of functionality compared to banking apps, customers trust telcos with their credit card details.

Social media censorship is a public concern and needs a public solution

With much of public discussion now taking place on the three main social platforms the time has come to take editorial control away from their owners.

Even before the Cambridge Analytica scandal it had become apparent what a major role social media was already playing in public life. Politicians use Twitter to communicate directly with the electorate and spend billions on Facebook’s targeted advertising. Meanwhile a new generation of political and social commentators have been given their voice by YouTube and now attract audience numbers mainstream media can only dream of.

But all three of these platforms are commercial operations with obligations to maximise returns to their investors. In all three cases the business model is the classic media one of charging for access to their audience, which means they rely on advertisers for their revenue. This in turn can lead to conflicts of interest.

These have always existed in traditional media too. It is far more common than you might imagine for publications to receive pressure from advertisers to change editorial decisions under threat of advertising revenue being taken away if they don’t. They then face a simple choice: the short-term fix of capitulation to blackmail or the long-term investment in the trust of their audience and the credibility of their title.

The dilemma is different for social media, however, since they don’t produce the content they sell advertising against. Instead their business model has been to make is as easy as possible for anyone in the world to publish on their platforms, a model so successful that much of the advertising traditional media used to rely on has now moved to social media, such that digital ad spend is forecast to overtake traditional spend in the US this year.

Inevitably social media are facing the same kind of advertiser pressure traditional media always have, but their response is usually to capitulate. The reason for this is simple: they have no investment whatsoever in the content they host and no specific editorial theme or angle to protect. Because of this they seem much more ready to remove content and even ban users if they think is will keep the ad money flowing.

One other by-product of caving in to commercial pressure is that it sets a precedent, with advertisers emboldened to be ever more demanding with their requests. In the case of social media this has resulted in increasing pressure to ban from social media any contributors advertisers fear may harm their brands by association. This capitulation has also emboldened activists to call for bans of anyone they disagree with, sometimes even alerting advertisers to the PR danger to increase the pressure further.

This PR pressure came to a head for Facebook last week when it decided to ban several accounts it had unilaterally decided were ‘dangerous’ and to pre-brief a number of media about it before even notifying the users themselves. While opponents of the people bans applauded the move, there has been wider concern about the arbitrary nature of the action and the power of Facebook to decide who gets to take part in the public conversation.

A common argument at times like this, often made by people otherwise deeply suspicious of the motives of big corporations, is to insist that private companies like Facebook are free to police their platforms as they see fit. But the fact that those platforms is where most public discussion takes place and that those companies tend to just buy competitors when they get too big means this is a public concern both from a freedom of speech and a competition perspective.

Probably the most famous social media user is also arguably the most significant politician in the world: US President Donald Trump. He was deeply concerned by Facebook’s actions and, appropriately enough wasted little time Tweeting about it.

  He went on to refer to one of the banned people – Paul Joseph Watson, a UK citizen – directly in subsequent tweets and retweeted a number people objecting to the move, noting it appeared to target people on the conservative side of the political spectrum. Watson responded by calling for him to revoke the protection internet platforms have from the consequences of what is posted on them, since it was now acting as a publisher.  

Elsewhere one of the founders of Facebook published an op-ed calling for the break-up of Facebook on the grounds that it had grown too powerful and too much of that power is held by Mark Zuckerberg alone, who personally holds the overall majority of voting power in the company. Others have argued, however, that since Facebook isn’t a monopoly in any of its markets any attempt to break it up would be illegal and that better regulation would be much more effective.

Again it’s common for accusations of hypocrisy to be levelled at those who call for regulation to protect freedom of speech, but in this case the position is entirely consistent. If speech is being restricted by a private oligopoly then public intervention may be the only way to combat that. As any telecoms company could tell you, regulation of oligopolies in markets with high barriers to entry is commonplace and vital to ensure consumers aren’t held to ransom.

The father of the free market Adam Smith famously wrote the following in his definitive book ‘The nature and causes of the wealth of nations’, in reference to the necessity of regulating cartels:  “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

In this case we’re not talking about cartel behaviour, although sometimes their activities can seem suspiciously coordinated, nor is the primary concern a contrivance to raise prices. The commodity at stake is not money but the ability to take part in public discussion. This is arguably no less important a utility then water, electricity or telephony, but to date the companies that control it have faced far less scrutiny than utilities.

Such is this burden of responsibility that even Zuckerberg himself has publicly called for increased regulation. His underlying motives may be self-preservatory, but the logic is sound. Nobody thinks access to public conversation should be controlled by private companies, but currently there are now regulation in place to take that decision away from them. Zuckerberg seems to have concluded that if there were that would take a lot of the heat off him.

Decisive regulation may also pre-empt the litigation that is bound to hit social media companies as they continue to restrict their users. Watson indicated he’s tempted to take legal action, especially since the discovery phase would require Facebook to reveal the rationale behind his banning, possibly exposing the political bias he suspects is behind it. Watson also recently tweeted about a possible legal precedent that may be set in Poland, that would prohibit social media companies from acting against anything legal.

This would appear to be the best solution for everyone. Social media companies would be able to tell pushy advertisers that such decisions have been taken out of their hands, while users would have the law is their sole guide to acceptable public speech. There would still be the matter of different laws in different countries and deliberately censorious and ill-defined legal terms such as ‘hate speech’, but things would be a lot clearer than they are now.

Essentially this would mean that, in order to retain the protections afforded to platforms, social media would not be able to censor anything legal. Alternatively , if they want to take a more active editorial role they should be treated as publishers and be liable for all content published on them, right now they’re somewhere in between and that’s unsustainable. Here’s independent Journalist Tim Pool with a US take on the matter.

 

Facebook selectively bans ‘dangerous’ users

Social media giant Facebook has significantly stepped-up its censorship efforts by banning seven accounts, six of which are often described as ‘far-right’.

Alex Jones, his publication Infowars, Milo Yiannopoulos, Paul Joseph Watson, Laura Loomer, Paul Nehlen and Louis Farrakhan. Jones and Infowars, of which Watson is an editor, are known more for general conspiracy theories than any specific political stance, while Yiannopoulos is a notorious provocateur, Loomer a political activist, Nehlen a fringe US politician and Farrakhan the leader of The Nation of Islam.

“We’ve always banned individuals or organizations that promote or engage in violence and hate, regardless of ideology,” said a Facebook spokesperson in response to our query. The process for evaluating potential violators is extensive and it is what led us to our decision to remove these accounts.” The ban also applies to Facebook-owned social networking service Instagram.

Further enquiries revealed that all were banned for violating Facebook’s policies against dangerous individuals & organizations. Among the things Facebook considers to be violations include:

  • Calling for violence against people based on factors like race, ethnicity or national origin
  • Following a ‘hateful’ ideology
  • Use of ‘hate speech’ or ‘slurs’, even on other social media sites
  • Whether they’ve had stuff removed from Facebook or Instagram before

There are also two tiers of ban. Facebook told us it usually censors all other users from even praising these banned people and organisations, regardless of context, which implies it does allow criticism of them or indeed neutral commentary. But there’s another tier that covers people who haven’t transgressed according to the criteria above but are still considered ‘dangerous’ by Facebook according to unspecified criteria. They get banned but everyone else is still allowed to say nice things about them if they want and it’s unclear which category each of the banned people fall into, hence whether or not users should avoid saying nice things about them.

Facebook did indicate to us some of the signals that prompted it to take action in these cases. It looks like many of them are being punished for associating with Gavin McInnes, founder of Vice magazine and a provocateur in the Yiannopoulos mould. Jones recently interviewed him, Loomer ‘appeared with’ him and also praised another banned person, Faith Goldy, while Yiannopoulos himself also praised McInnes as well as banned activist Tommy Robinson. Farrakhan has been banned for multiple public statements disparaging Jews.

While all of the people banned have doubtless broken the state rules at some time or other, questions remain about the specificity of those rules and how indiscriminately they’re enforced. According to Wikipedia (not necessarily the most authoritative source but we have to start somewhere) hate speech is defined as ‘a statement intended to demean and brutalize another’.

On the surface this would seem to apply to the majority of discourse over social media, but the definition is typically narrowed to such statements that are deemed to be influenced by race, religion, ethnic origin, national origin, sex, disability, sexual orientation, or gender identity. As the Wikipedia page illustrates, every country has its own hate speech legislation, but Facebook has decided to draft its own.

‘A hate organization is defined as: Any association of three or more people that is organized under a name, sign, or symbol and that has an ideology, statements, or physical actions that attack individuals based on characteristics, including race, religious affiliation, nationality, ethnicity, gender, sex, sexual orientation, serious disease or disability,’ explains the Facebook community standards page.

If we take these guidelines literally, therefore, you can be abusive on Facebook, as people frequently are, so long as you don’t call for violence or make any reference to the person’s identity. This is obviously a very difficult thing to enforce, leading to concerns that there may be a degree of political or other bias in doing so.

A common example of this cited by those who perceive political bias is the case of Antifa. The name is an abbreviation of ‘anti-fascist’ and it’s a group set up to counter perceived far-right activity. There are, however, numerous reports of this activity involving violence, especially against a group founded by McInnes called the Proud Boys. Antifa has even been labelled a domestic terrorist group in the US and yet many of  its Facebook pages remain unbanned.

The matter of actively campaigning politicians is another hot-button issue. Nehlen seems to be the only member of this newly-banned group to describe themselves as a politician, but in the UK at least two candidates standing in the imminent European elections have had their campaign accounts banned from Twitter due to the individuals in question having already been banned from that platform.

A common response to concerns about selective banning by social media platforms is that they’re private (although publicly-listed) companies and are thus free to ban whoever they please. The biggest problem with this argument is that they have also become the new public square, and the platform from which political campaigns are now largely based.

The Cambridge Analytica scandal hinged on concerns that Facebook had been used to manipulate elections and US President Donald Trump famously uses Twitter as his primary means of public communication. By selectively banning certain accounts social media companies not only open themselves up to accusations of political bias, they also run the risk of directly undermining the entire political process.

Facebook’s privacy conundrum

Facebook CEO Mark Zuckerberg has to do something about his firm’s reputation for data privacy, but it could it require destroying its own core business model.

At the F8 developer conference this week, Zuckerberg has been making claims no-one is surprised to hear. Facebook is all about user privacy, its not about making money anymore, just about offering a service its users care about. The PR machine is shifting through the gears, Facebook has to save its reputation before it’s too late.

This is perhaps the worst kept secret in Silicon Valley; Facebook does not care about data privacy, or at least it hasn’t cared in the past. It cares it was caught flamboyantly prancing around, above and all over the concept, but few will be surprised executives prioritized profits over privacy.

But here is the crossroads the firm faces; be disrupted or destroyed.

This of course sounds very dramatic, and perhaps we are taking poetic licence, but there is at least an element of accuracy to the statement. Zuckerberg needs to fundamentally redefine the business, moving away from the tried and tested business model, before regulators and legislators take Facebook out at the knees.

At the conference, Zuckerberg has been outlining Facebook’s journey forward. Updates will focus on creating a more ‘private’ experience, ushering users towards groups and chat locations which, theoretically, will prevent Facebook from fuelling its data machine. It seems the new business will be focused around two of the companies most popular applications, Messenger and WhatsApp, though this could potentially kill the tried and tested Facebook business model; hyper-targeted advertising.

One example of this is an update which will allow users to invite connections to watch videos in a private message or group. In years gone, this would be sacrilege to Facebook executives. If it is private, how can it be used to tune the advertising machine? Where is the opportunity to make money?

This is the risk Facebook is facing up to; its traditional business model is under threat. Its reputation for handling privacy is in tatters and the world is turning against Facebook. If it continues on the path of collecting and harvesting data in this manner, someone will eventually step in and stop it. Governments and regulators are cracking down on the data sharing economy, and Facebook has been made enemy number one.

But all is not lost. Facebook still has a couple of tricks up its sleeve. Firstly, the core social media platform is salvageable. It might look like a digital Yellow Pages today, but it by-gone years, it was a genuinely engaging platform. Somewhere along the line executives got grabby and started prioritising advertising over engagement, and the platform suffered as a result. If Facebook can rediscover the magic of old, all will be forgiven, such is the short-term memory of many consumers.

This might mean having to sacrifice the hyper-targeted advertising model, but if Zuckerberg’s claims on privacy are to be believed, Facebook might be moving away from it anyway.

Fortunately, with a reinvigorated platform, which people trust and enjoy, Facebook can bolt services on and beside it, as opposed to through it. This is perfectly feasible business model; running the platform as a loss-leader, maintaining a more transparent advertising business and also using the credibility to monetize premium services. And it might be a sensible direction for Facebook to go. It has worked before and will work again.

To make this idea work, Facebook will need a few things. Firstly, the ambition to explore news ideas. Secondly, smart people. And finally, R&D funds. Facebook has all these things in abundance.

Facebook has already shown its ambition with the launch of AR/VR, video platforms, online market places, dating applications and enterprise services (just to name a few). It has and will continue to attract some of the worlds most intelligent engineers and business people. And finally, Facebook has bags of cash.

This of course is taking Zuckerberg at his word. This might be nothing more than a ploy to generate positive PR. The hyper-targeting advertising model might simply be evolving with the help of small print and clever distractions. But, Zuckerberg surely is smarter than this. Another case of misleading the general public would surely be a step too far.

Zuckerberg might be waking up to the fact he cannot hide from this horrid and distasteful reputation he and his firm has developed. Perhaps Facebook has realised it needs to fundamentally change its business model. Maybe Zuckerberg wants to disrupt his own business before governments and regulators try to destroy it.

Europe approves new internet rules designed to rein in Amazon and co

As part of the overall Digital Single Market programme, the European Parliament has voted to approve new regulations claiming to protect European businesses and consumers when using online platforms to trade.

The “Regulation on platform-to-business trading practices” has been almost two years in the making since the publication of a document titled “Online Platforms and the Digital Single Market: Opportunities and Challenges for Europe” by the European Commission in May 2016.

The EU executives were understandably happy with the passing of the new rules. “We are delighted by the overwhelming support to the new rules on online platforms’ trading practices among the members of the European Parliament. As the first-ever regulation in the world that addresses the challenges of business relations within the online platform economy, it is an important milestone of the Digital Single Market and lays the ground for future developments. Not only will it improve trust, predictability and legal certainty, it will also offer new and accessible options for redress and resolution of disputes between businesses and platforms,” said the official statement, jointly signed off by Andrus Ansip, the Commission’s Vice-President for the Digital Single Market, Elżbieta Bieńkowska, Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, and Mariya Gabriel, Commissioner for Digital Economy and Society.

What drove the Commission to undertake such an initiative two years ago was the understanding that there is a lack of a redress mechanism when the European SMEs encounter problems when trading on the global platforms (companies singled out include Booking.com, Facebook, eBay, and Amazon), for example, “delisting without statement of reasons or sudden changes of Terms and Conditions”. The Commission has also assessed the effectiveness of legislative vs. non-legislative measures, but believed an EU-wide legislation is necessary.

The Regulation is aimed to achieve three main objectives as are outlined in the Impact Assessment Summary published a year ago:

  1. To ensure a fair, transparent and predictable treatment of business users by online platforms
  2. To provide business users with more effective options for redress when they face problems
  3. To create a predictable and innovation-friendly regulatory environment for online platforms within the EU

Although it has been approved by the European Parliament, the regulation still needs to be formally passed by the Council of the European Union, which represents the governments of the member states and can be roughly seen as another “chamber” of the union’s legislature. There is no definite timeline on when the Council will make the decision. However, by the reading of the press statement where the Commissioners thanked the member states “for their great efforts to reach a good compromise in a very short period of time. This is yet another positive development ahead of the upcoming European elections,” the Council may not be able to vote on it before the European Parliamentary election in May. After the final approval, the regulation will enter into force 12 months after it is published in the Official Journal.

This is the latest internet-related legislation the EU has made recently. On 15 April the Council passed the updated Copyright Directive “fit for the digital age”, which has proved controversial.  There are also legislation and regulation updates in member states. France has started levying 3% income tax on digital companies with sales in excess of €25 million in France and €750 million globally, without waiting for an EU-wide tax regime as part of the Digital Single Market. The UK, still an EU member state at the time of writing, has not only considered setting up a new regulator to oversee the digital world and started the consultation process of a “code of practice for online services” to protect children, but will also formally introduce the “porn block” on 15 July, which has been called “One of the Worst Ideas Ever” by some critics.

As Facebook fails once more Zuck faces rebellion from activist investors

All Facebook sites were down once more yesterday, which coincides with Facebook shareholders calling for its founder to have less control over the company.

According to Bloomberg this marked the third time this year the social media giant has suffered a major outage. Not just Facebook, but Instagram, WhatsApp and Messenger were all affected by the outage, reminding everyone just how much social goodness is controlled by just one company. Facebook doesn’t seem to have said anything other than a brief, generic apology.

It has been widely observed that this increased incidence of outages coincides with Facebook’s decision to merge its various messaging apps onto one platform and put a greater emphasis on privacy a month or so ago. There is definitely some merit in that revised strategy and it wouldn’t be surprising if it caused some service disruption, but if so why not just come out and admit it?

One reason may be Facebook’s increasingly restive shareholders. In a recent filing ahead of its annual shareholders meeting Facebook listed a proposal calling for all stock to have equal voting power. The central issue is that Class B stock, which isn’t publicly traded, has ten times more voting power than regular Class A stock. By bizarre coincidence Founder Mark Zuckerberg owns enough, apparently, to have a majority in any shareholder vote.

“Since July 2018, Facebook value dropped as much as 40% due to management and Board decisions that have not protected shareholder value,” opened the supporting statement. “By allowing certain stock more voting power, our company takes public shareholder money but does not provide us an equal voice in our company’s governance. Founder Mark Zuckerberg controls over 51% of the vote, though he owns only 13% of the economic value of the firm.”

Facebook’s share price went down the toilet after it reported rubbish numbers in in the middle of last year. Having peaked $217 just before those earnings it plunged to a nadir of $124 by Christmas, but has since recovered to $179 – an 18% drop – which is close the pre Cambridge Analytica peak. So the claim that bad management decisions have diminished shareholder value seems weak.

And while the disproportionate influence of these Class B shares does seem unfair, they have been in place since the IPO and anyone buying Class A shares will have been aware of them, so it seems somewhat disingenuous for such stockholders to suddenly start crying now. Having said that if Facebook keeps dropping the ball we can expect to see such calls increase in frequency and intensity, however futile they may be.

Facebook placates Europe for now

In a bid to keep the European Commission off its back social media giant Facebook is admitting to its users that they’re the product.

Despite this being the media business model since the first newspapers were printed, the EC seems to think making Facebook spell out its business model represents some kind of progress. Those few users that even care will now be able to find some kind ‘digital media for dummies’ guide buried somewhere in their Facebook details. This is probably a product of all the faux outrage expressed when it was revealed that politicians can use Facebook for targeted advertising before elections.

This thrilling new section of Facebook will also clarify the nature of the implicit contract users enter into with Facebook when they post stuff, as well as clarify the rules for removing posts and suspending accounts. Facebook has vowed to be a bit more reasonable when it comes to unilaterally changing its Ts and Cs, and to admit its liabilities when it comes to things like Cambridge Analytica.

“Today Facebook finally shows commitment to more transparency and straight forward language in its terms of use,” said Commissioner Vera Jourová. “A company that wants to restore consumers trust after the Facebook/ Cambridge Analytica scandal should not hide behind complicated, legalistic jargon on how it is making billions on people’s data. Now, users will clearly understand that their data is used by the social network to sell targeted ads. By joining forces, the consumer authorities and the European Commission, stand up for the rights of EU consumers.”

If this is all Facebook has to do to get the EC off its back then Mark Zuckerberg must be laughing himself sick right now, pausing only to sign off a massive pay rise for Nick Clegg. Companies like Google and Microsoft have probably already written to the EC, asking why they weren’t given the ‘publish some clarifications’ option before getting fined into next week. While this seems to have temporarily placated the EC, Facebook’s minimal gesture seems useless to its users.

France and Britain are embracing state control of the internet

France has appointed a new minister for digital, while the UK wants to set up a new regulator for the internet. Both governments want to play more active roles in controlling the online world.

Emmanuel Macron, the French President, nominated his political advisor Cédric O to the position of Secretary of State for the Digital (Secrétaire d’État chargé du Numérique), a post vacated when the predecessor quit to prepare for next year’s municipal election. O has been instrumental in running the president’s agenda to engage the digital heavyweights, including arranging the meeting for Zuckerberg, and organising the French senior civil servants to observe in Facebook’s headquarters.

O opened his story to the journalists from AFP and L’Express by claiming that he was in “100% agreement” with Zuckerberg regarding the stronger role the states should play in regulating the internet. “There is the demand from citizens, ‘please guarantee that when I’m on the Internet, my right is respected’. But the right should not be defined by the platforms (e.g. Facebook, Google, etc.), ” O said. The government will also update laws to give it the legal foundation to play such a role, including bringing the current regulations on audio-visual sectors to the digital age, O told the interviewers.

The French government has recently revived the traditional measures to play a more assertive role in the economy, and has extended the approach into the digital domains in particular. Recently it decided to go ahead with the 3% tax on the internet heavyweights, the nicknamed “GAFA tax”, without waiting for the EU to reach consensus on the common digital market.

On the other side of the Channel, the British government, already having a department overseeing digital as its portfolio, is mulling over the set-up of a new regulator, either being part of the existing government structure or a new government body altogether.

This is necessary to consider the current problems surrounding the internet giants. On one hand, these companies have not been regulated properly either as a platform or content publisher. On the other hand, these platforms have been used to facilitate crimes including terrorist attacks. However, there is also the danger that the government is overstepping the lines to become a moral arbiter. The first “problem” of internet identified in the “Online Harms White Paper”, jointly endorsed by the Digital Secretary and the Home Secretary, states that “illegal and unacceptable content and activity is widespread online”. While “illegal” can be properly defined, “unacceptable” is a subjective judgment and a judgment that should not made by the government.

To couple such subjective assessments with the government’s demand that ISPs and ICPs should have the obligation to block content or face heavy fines smells similar to the measures adopted by the censorship regimes of China, Russia, Iran, and a few other countries. A side effect of such assertive measures could be driving some internet users down the route to evading government monitoring, for example this could be a boost for the VPN business.

As we said when Zuckerberg asked the governments to share his burden and blame, having governments control internet content, be it French or Chinese, would be a double-edged sword, and one edge would run against the internet’s spirit of liberating access to information and freedom of expression, and against what Sir Tim Berners-Lee demanded that governments should “keep all of the internet available, all of the time; and respect people’s fundamental right to privacy.”

This almost rolls back the years to what the late Christopher Hitchens once called “an all-out confrontation between the ironic and the literal mind: between every kind of commissar and inquisitor and bureaucrat and those who know that, whatever the role of social and political forces, idea and books have to be formulated and written by individuals.” (“Siding with Rushdie”, 1989) It would be the biggest irony of internet’s brief history if, after beleaguering the Chinese government for its heavy-handed approach towards internet, the western governments are all going down the China route, albeit 20 years later.

Austria and Australia join the march against Silicon Valley

The days of the wild-west internet seem to be coming to a close with Austria and Australia becoming the latest nations to update the rules governing the business activities of the internet giants.

At the foot of the Alps, the Austrians are proposing a new 5% sales tax on digital revenues which are realised in the country, another European state to tackle the ‘creative’ accounting practices of Silicon Valley. Down under, the Australian Government plans on introducing tougher rules which will place greater accountability on social media platforms for extreme and offensive content.

For years the world watched in amazement as the likes of Google, Facebook and Amazon climbed higher up the ladder of influence. We gazed in wonderment as Silicon Valley seemed to pluck profits out of thin-air and their CEOs hit celebrity status. But then the scandals started to roll-in and we all realised these companies had abused the privilege of self-regulation.

The Cambridge Analytica scandal was the watershed moment, a saga which dominated headlines around the world for months and hauled politicians away from free lunches and back into the debating chambers. All of a sudden everyone realised the likes of Zuckerberg, Bezos and Page were not our friends, but incredibly intelligent businessmen who were exploiting the grey areas sitting idly between the mass of criss-crossing red-tape.

What followed this scandal was a more forensic look at the business models of the internet giants. Those looking close enough found trickily worded terms and conditions, confusing processes, ransom opt-ins and abused freedoms. Users were being tracked without their knowledge, personal information was being traded as a commodity and tax havens were being exploited. Opinion on Silicon Valley turned sour.

On the other side of the coin, it wasn’t just the craft and cunning of Silicon Valley lawyers to blame, but inadequate rules for today’s digital era. Politicians and regulators woke up to the fact rules and legislation needed to be updated to create a fair and reasonable policy landscape to hold the internet giants accountable. Experts were brought in to account for the vast gulf in competence and the march towards Silicon Valley began.

A perfect storm has been brewing around the internet giants and as the weeks pass more countries are taking a more stringent approach to the business of the internet. Australia has been trundling along with incremental progress, and now Austria has entered the fray.

“Through the digital tax package, we are closing tax loopholes and thereby ensuring that large digital corporations, agency platforms and retail platforms are called to account,” said Austrian Finance Minister Hartwig Löger. “Through fair taxation of the digital economy, we are establishing equity in taxation.”

Moving forward, a digital tax of 5% will be introduced for large digital corporations, those with global sales of € 750 million, of which €25 million originates in Austria. The new rules will also take away VAT exemptions for deliveries from foreign countries. Previously, orders valued below €22 were exempt from the tax.

“Through this measure, we are taking digital agency platforms to task,” said State Secretary of Finance Hubert Fuchs. “No one is entitled to evade the obligation to pay tax.”

Austria is of course not alone in this tax assault. As the member states of the European Union cannot agree on a bloc-wide tax mechanism, plans were blocked by nations who benefit from the status quo such as Ireland, individual states have gone on alone. France and the UK have already set plans in motion, but we expect such proposals to start snowballing before too long.

Australia is targeting a different area of contention however. Following events in Christchurch, New Zealand, and the simultaneous live-streaming of the incident, the Australian Government has introduced new rules which will hold social media and other social media platforms accountable for the dissemination of offensive material.

The Sharing of Abhorrent Violent Material bill creates new offences for content service providers and hosting services who fail to act expeditiously to remove videos containing “abhorrent violent conduct”. Such conduct is defined as terrorist acts, murders, attempted murders, torture, rape or kidnap.

The technology community and legal experts have slammed the new rules, and while there are some valid points, the social media and hosting platforms might have to be forced forward. It is an incredibly difficult task to identify these videos, such is the complexity of identification in such as vast swarm of uploaded content nowadays, but without the threat of penalty there is a risk progress will not move at a desired pace.

Following the incident, Facebook pointed out that it did take down the video quickly, though it was not able to use AI to identify the content. This is where it becomes incredibly difficult for the technology industry; these applications need abhorrent content to be trained to identify abhorrent content. It’s a bit of a catch-22 situation, but harsh penalties for non-compliance will force the industry to find a solution.

“We have heard feedback that we must do more – and we agree,” said Facebook COO Sheryl Sandberg in a letter to the New Zealand Herald. “In the wake of the terror attack, we are taking three steps: strengthening the rules for using Facebook Live, taking further steps to address hate on our platforms, and supporting the New Zealand community.”

Sandberg has promised new restrictions on how live videos can be uploaded and streamed to the platform, though details were incredibly thin. Facebook will not want to introduce too many restrictions, making the process too convoluted and tiresome will impact user experience, though it clearly has to do something. The opportunity to broadcast horrific acts has become too accessible.

This is the problem which Facebook and everyone else in the digital economy is facing. The promise is to open up the gates and allow people to express themselves, but unfortunately there are people who will take advantage of this situation. It is an incredibly difficult equation to balance.

Technology will eventually help the internet companies get to a suitable position, with the potential of AI grafting through the millions of uploads, however the training period is going to be a difficult process. The risk of going too sensitive is restricting free speech, though with content uploaded from shows such as Game of Thrones, there is plenty of room for error.

The internet giants will want to resist change, despite giving the impression of encouraging more regulation and government intervention, but it won’t be able to hold back the tides forever. With privacy concerns, fake news, tax evasion, political influence, anti-trust accusations and the unknown power of data analytics, the internet giants are simply fighting on too many fronts.

These are companies who have incredible financial power and immense armies of lobbyists, but Silicon Valley is the bad guy right now. Politicians have spotted an opportunity to make PR points by unloading on the punching bag, and you can guarantee there will be many lining up to take a swing.