Justice Department eyes up social media probe over competition

Department of Justice spokesman Devin O’Malley has raised the prospect of an investigation into whether the social media giants are impacting competition through ‘intentionally stifling the free exchange of ideas’.

In a statement following the Senate Intelligence Committee grilling, O’Malley outlined plans to meet with state attorneys general to discuss the concerns over the next couple of weeks in Washington. While this does not necessarily mean a full investigation or any legal action, the social media giants are receiving plenty of unappreciated attention currently.

“The attorney general has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms,” said O’Malley.

Attorney General Jeff Sessions has apparently taken on President Trump’s battle against the social media giants. Aside from the Senate Intelligence Committee questioning the effectiveness of social media giants in providing an unbiased and uninfluenced platform for free speech and news, Trump is going tweeting crazy as well.

Trump’s latest target is Google as the President accuses the search platform of political bias. The remarks have escalated the conservative campaign against the internet industry, accusing the technology company of burying Republican orientated news in search results while offering more prominence to the opposition. While the ‘everyone is evil except me’ rhetoric from the President is starting to become boring, we are waiting to see whether the irony of one of the social media giants creating unprecedented exposure for his vile opinions will ever hit home.

Of course, while these are sub-plots, yet to emerge as major thorns for the social media companies, the current saga is focused on the Senate Intelligence Committee. Yesterday saw Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey face the grilling, attempting to justify their actions. The questions focused on efforts to keep Russia, Iran and others from disrupting elections and causing other problems. Some Senators found it difficult to believe there isn’t a political bias on the platforms, but that is to be expected.

The current political climate is such that temper tantrums will be thrown and accusations dished out if there is any minor disagreement to propaganda. The concept of the press questioning claims and presenting their analysis to allow citizens to make up their own minds seems to have disappeared. And we thought government was run by mature adults.

While these two internet heavyweights seemingly performed admirably in defending their positions, Google’s empty chair took more than its fair share of criticism. Rather than facing the questions of the Senators, Google decided to skip the hearing after alternative representatives were rebuffed. Instead of defending itself, Senators took aim and fired. Google has largely enjoyed a good relationship with both parties in the US political shark tank, though how this snub impacts the relationship remains to be seen.

With the Senate Intelligence Committee attacking the social media giants from the front, the Oval Office using their own platforms to attack in the virtual world and the Department of Justice gathering support on the horizon, it is looking like another couple of uncomfortable months. We suspect the US political system has already decided who is to blame, but a series of investigations and hearings are needed to justify the accusation. You know, the normal way to identify guilt.

The trend of social media news feeds is starting to become dangerous

Social media is turning a one-stop-shop, with consumers using the platform for every aspect of their lives, including news. At some point we have to question whether this is healthy way for an individual to stay informed.

Following the questioning of Facebook CTO Mike Schroepfer, where the executive was asked to go into detail on the way the social media giant targets users with advertising and content, we’ve been questioning whether consuming news through the platform is a good idea.

Last year the Pew Research Centre in Washington produced a report which estimates 45% of US adults use Facebook for news, with half of Facebook’s news users get news from that social media site alone. As more digitally native consumers enter adulthood, this reliance on social media will almost undoubtedly increase.

The basic concept of social media platforms like Facebook or Twitter is to put the right information in front of you at the right time. This can be achieved through various different means, whether it is the user signing up to notifications or advertisers proactively contacting them through preferences set by the user, but in both cases content the user wants is consumed. This is not healthy.

Some news is not nice. It isn’t pleasant, enjoyable or engaging. Sometimes it shocks, offends and horrifies. Current affairs are not supposed to make you feel good about yourself all the time, or put you in a good mood. But this is no reason to shut the door to bad news. Being aware is critically important.

Another worrying aspect is the reconfirmation of a position. This is the problem with social media, it shows you what you want to see. Users sign up to pages, or follow certain individuals and organizations, which informs the platform about your interests. These interests are used to create profiles which the platform uses to create a personalised content stream. It produces an echo chamber where your opinion is enforced and you are protected from opinions or events which you do not agree with.

Unfortunately this is not how a mature individual should develop. Conflicting opinions help an individual form a position, and an individual’s opinion should only be formed when all positions are considered. This might sound condescending, but it is true. Why should someone’s opinion be valid when it is only developed by one side of the argument? Such scenarios create blind followers and an ill-informed population.

Creating an individual who is so entrenched in a specific opinion is a dangerous game. Just to clarify, if that individual is entrenched because they have evaluated all the available information and strongly position themselves on one side of the argument is fine, but that is not what social media is. Social media panders to the whims of the user, offering a partisan view on current affairs. This in itself could be considered undemocratic.

Social media has done wonderful things for society on the whole, but the detrimental impact of certain aspects are yet to be considered. For those who consider Facebook or Twitter an effective means to remain informed, have a think about whether your Facebook preferences would have including the Me Too campaign, Charlie Hebdo shooting or any news relating to the Windrush generation. These are important news stories that might not have fit neatly into the content algorithm when this weekend’s football scores, Prince Louis of Cambridge or other frivolous articles better suit your preferences.

Apple looks to news to supplement obscene smartphone profits

On the day Counterpoint Research estimated Apple collected 86% the total handset market profits in Q4, rumours have resurfaced about the firm wandering further into the world of news service subscriptions.

According to Bloomberg, the iChief is preparing to launch a new subscription-based offering for its Apple News service, integrating the recent acquisition of Texture into the mix. The new venture will form part of a greater push from the firm into online content and services, to generate additional, sustainable revenue.

Apple has had a news service application for some time now, but like most of the iLeader’s efforts to crack the content game, it has been pretty substandard. Last month the firm agreed to acquire Texture, a news aggregator platform which allows users to subscribe to more than 200 magazines for $9.99 a month. Apple is yet to comment on the upgraded app and service, though people familiar with the project estimate the service should be available within a year.

Previous attempts to bring news to the iFollowers have not been great. Newsstand was previously launched as an aggregator platform, though users had to subscribe to the titles on an individual basis. Apple News was launched in 2015 with a similar approach, and the fact no-one really talks about it tells you how much of a success it is. The Texture model, a subscription point for multiple titles, is a much more cohesive approach and will have greater appeal to today’s users.

Titles currently included in the Texture catalogue include All About Beer, Bloomberg, Wood, Diabetes Self-Management, National Geographic, Veranda, Forbes and Fit Pregnancy and Baby. There is certainly something for everyone.

The services unit at Apple accounted for 13% of total revenues in the last quarter, but what should be noted is that this isn’t simply the content and subscription businesses, insurance takes up a large chuck of the revenues. Other products include the App Store, iTunes Store, Apple Music Subscriptions, Apple Pay, iCloud Storage Costs, as well as AppleCare. Getting into the recurring revenue business is certainly a good bet, and positioning itself as an aggregator would seem like the best strategy when you look at the original content it has developed so far.

The team are supposedly aggressively producing new content, perhaps to gloss over previous attempts. The first attempt was ‘Planet of the Apps’, essentially a ‘Dragons Den’ rip-off for apps, and it was truly shocking. Carpool Karaoke was equally as cringe-worthy, as the Apple team took liberties with the definition of ‘original’. More recent attempts have seen Stephen Spielberg drafted in for a reboot of ‘Amazing Stories’, as well as a futuristic drama from the director of the Hunger Games films Francis Lawrence.

These efforts look more promising, but Apple isn’t doing anything revolutionary or new, just re-scripting stories which have already been told. This isn’t how the content production world works; risks have to be taken to find the next ‘Breaking Bad’, ‘West World’ or ‘Stranger Things’.

Apple has long spoken about the objective of cracking the software, services and content space, as a means to supplement the hardware business, but when you look at market estimates it certainly comes across as long-term planning; there is no need right now!

That said, while profits in the global handset market declined by 1% year-on-year, according to estimates from Counterpoint Research, Apple accounts for 86% of profits made across final quarter of 2017, with the iPhone X accounting for 35% alone. In terms of the profit share by handset model, Apple accounted for eight out of the top ten worldwide. The team also claim the iPhone X generating five times more profit than the combined earnings of 600+ Android OEMs during Q4 2017.

Competition seems pretty thin on the ground for Apple, as while Samsung has the dominant market share position, it simply can’t compete with the luxury positioning of the Apple brand. The brand has been a delicate and intricate development over the last decade, however it is certainly paying off. It seems it doesn’t matter what the iLeader asks for, its army of loyal, iCultist followers will pay it. Some might be locked into the ecosystem, but the majority are the blind followers, worshipping at the altar.

The smartphone space is becoming less profitable as more users are holding onto devices for longer, before searching for cheaper deals with second-hand and refurbished phones, but that will mean little to Apple. As long as it is taking the vast majority of profits from the industry it will be in a healthy position; it will still make billions upon billions. If it does manage to figure out how to do content and services, the decreasing profitability of the handset market will matter even less.

CMA blocks Murdoch’s Sky high ambitions

The Competition and Markets Authority (CMA) has blocked Rubert Murdoch’s and Fox’s $11.6 billion attempt to full control of Sky on the grounds of media plurality.

In short, the CMA doesn’t want any one individual or organization controlling too many press outlets in the UK. It would not be in the public interest, according to the watchdog, due to the importance of diversity of publicly consumed information to the democratic process. Murdoch’s assets are already read, heard or watched by a third of the UK population, which is already a questionable amount in our own opinion.

“The CMA has provisionally found that if the deal went ahead, as currently proposed, it is likely to operate against the public interest,” the CMA said in a statement.

“It would lead to the Murdoch Family Trust (MFT), which controls Fox and News Corporation (News Corp), increasing its control over Sky, so that it would have too much control over news providers in the UK across all media platforms (TV, Radio, Online and Newspapers), and therefore too much influence over public opinion and the political agenda.”

This will certainly come as a blow to Murdoch and the Fox business, as this is a deal which has been in the making since December 2016. It was referred to the CMA in September by the Department of Digital, Culture, Media and Sport, over the concerns of media plurality, and this has been realised today. It is a clear message; no one individual or group should be able to influence public opinion to that extent.

Of course, there was a lot of hedging in the statements. The CMA praised Sky, Fox and Murdoch on its ability to inform the general public on the important issues of today, but irrelevant of precedent the CMA has to be on the lookout for nefarious intentions. Should one individual has such control over this many popular outlets, there is a risk of some stories being over hyped and some down played. Fake news might be a problem on social media, but it would be nothing if this many mainstream media titles started playing the same tune of euphoria and distraction.

This is not the end of the road however, as the CMA has put out a couple of suggested remedies to maintain media plurality, the first of which is simply banning the transaction and maintaining the status quo. The problem here is that should the CMA prevent the deal, there is a risk Sky News could be shut down. CMA has banned the closure of Sky News during the investigation, but there is a possibility of it happening. This is not a realistic solution, so we’re not too sure why the CMA is considering it.

Another possibility could be spinning off Sky News as its own standalone business. This might prove to be an interesting option for Murdoch considering the threat of extinction has been used as a bargaining chip to force through the deal. Why threaten the destruction on an asset when money can be made selling it off, achieving the desired result.

The final area is the deal with Walt Disney Company. During December, The Walt Disney Company announced that it was to acquire 21st Century Fox, after the spin-off of certain businesses, for $52.4 billion in stock. According to the CMA, this deal would weaken Murdoch’s hold over Sky, the root concern for media plurality, and therefore put the Fox/Sky deal back on the table. The door is not closed on this deal, but the CMA is not letting Murdoch do things his own way. One person having that much control over the media in one country is not a situation which should be allowed.

The Disney/Fox deal is of course subject to its own criticism and scrutiny from market watchdogs, so there might be a few nervous executives. A deal of this size usually hits hurdles in one or two markets around the world, so pinning the hopes of a controversial acquisition, on the success of another is certainly not an idea situation.

Facebook’s public panic attack continues

Mark Zuckerberg, Founder and CEO of social media giant Facebook, is trying to work out which news sources are more trustworthy than others. This sets a worrying precedent.

Zuck’s latest commandment in the name of purifying your Facebook feed is to make sure the news you see is ‘high quality’. “I’ve asked our product teams to make sure we prioritize news that is trustworthy, informative, and local. And we’re starting next week with trusted sources,” he proclaimed.

Already you can see the slippery slope embarked upon when social media platforms seek to actively edit not just what is uploaded to the platform, but which of it you end up seeing. “There’s too much sensationalism, misinformation and polarization in the world today,” continued Zuck, warming to his self-imposed editorial role. “That’s why it’s important that News Feed promotes high quality news that helps build a sense of common ground.”

Is it now? That’s one perspective but the definition of ‘high quality’ is highly subjective and what if people don’t want to build a sense of common ground? To insulate Facebook from the charge of imposing its own institutional narrative on its users Zuck has decided to “ask people whether they’re familiar with a news source and, if so, whether they trust that source.”

So the result will be a community-driven component to the algorithm that promotes content according to its trustworthiness. Sounds like a great idea until you scratch the surface and look into how that all-important trust metric is calculated. This piece published by The Atlantic, which may or may not be a trustworthy source, sums up some of the concerns over this move well.

This is just the latest in a round of significant tweaking to the Facebook platform apparently brought about by anxieties from a number of sources. Facebook has long been associated with the spread of misleading and agenda-driven content, often collectively referred to as ‘fake news’ these days. On top of that its dominant position inevitably puts it under greater public scrutiny and there are growing concerns about levels of user engagement.

Facebook recently announced a change to its algorithm such higher priority is given to content deemed to provide ‘more meaningful social interactions’, which means a slight downgrade for news and an upgrade for photos of little Johnny’s first day at school. It seems likely there will be more tweaks to come but they feel at least futile and often counter-productive.

Does anyone think Facebook is more user-friendly now than it was a couple of years ago? Thanks to this increasing level of editorial intrusion in the ‘news feed’ posts by close friends and family often fail to appear at all. What’s wrong with just serving up posts from everyone you follow in simple chronological order? If Facebook really wants to remain useful and relevant to its average user it might want to consider just getting out of the way.

Aussies ask important questions about online media consumption

The Australian government has tasked one of its agencies to investigate what impact digital platform providers such as Facebook and Google are having on competition in media and advertising services markets.

For the moment, the scope of the enquiry is relatively unclear, though the ACCC has stated part of the investigation will be to see whether the new platforms are affecting traditional media’s ability to fund the development of content. The last thing any democratic government is the end of media outlets who educate and inform the general public, but how much influence government should have on the commercial activities of any business is a difficult equation to balance.

“The ACCC goes into this inquiry with an open mind to and will study how digital platforms such as Facebook and Google operate to fully understand their influence in Australia,” said ACCC Chairman Rod Sims.

“We will examine whether platforms are exercising market power in commercial dealings to the detriment of consumers, media content creators and advertisers. The ACCC will look closely at longer-term trends and the effect of technological change on competition in media and advertising.”

Facebook and Google are of course doing nothing wrong. They have popular platforms were they push what they consider to be relevant and attractive content to the consumer. Most of the time this content is more conversational or entertainment related, as this is more popular with the consumer. Heavier news stories are much less likely to catch the attention of someone on the train who is just trying to kill five minutes until the next stop.

As these more entertainment driven content titles are more attractive to the online consumer, they are also attracting the lion’s share of advertisers budgets. As a result, titles which are more news related content are operating on slimmer budgets, and are therefore not able to take advantage of the commercial news platforms offered by the likes of Google and Facebook. For the more traditional content providers, it is a negative trend, which is only fuelling another negative trend.

Some might say we should let market conditions dictate the future, but recent events have shown what happens when commercial platforms, where content visibility is essentially pay-to-play, have such powerful influence over the consumer. The election of President Trump has been criticised due to the distribution of fake news and what some might call misleading propaganda, while some have also argued a misinformed electorate led the UK towards Brexit.

Unfortunately, those with the most cash are sometimes the ones who lean on sensationalist claims which fuel misinformation, or perhaps bankrolled by parties which have a bias. The latter is of course very difficult to prove, and Telecoms.com is not stating recent events have been influenced by such nefarious activities, but it is an idea which should not be lightly dismissed.

Traditional media is dying a slow and painful death at the hands of online platforms, and more entertainment-orientated titles. But this is the choice of the consumer, and the internet giants are simply addressing a need with a solution. Should this be considered wrong? Of course not. But will this lead to a general public which is less informed?

As you can see, it is a very difficult challenge for the ACCC, and one which could have global implications; governments tend to learn from each other. How do you preserve the capitalist freedoms which Western society is built on, with the need to ensure the general public is appropriately informed on topics which might not be the most click-baity?