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Feb. 12, 2019, 2:54 p.m.

A major British government review proposes some light regulation of Google and Facebook (and perhaps new limits on the BBC)

“For a society to have ready access to high-quality news is essential not just for the moment, but for the long-term sustainability of democracy.”

It’s become something of a trend for national governments to convene a commission of some sort to review the status of their countries’ news industry — and to recommend what policies or regulatory changes might help sustain a vibrant free press. Australia had its Senate Select Committee last year and a new review that came out earlier this week; Canada held up its “Shattered Mirror” the year before. (The closest we get in the United States is probably the various Knight Commissions that, though not government-sponsored, do a similar job rounding up a broad set of stakeholders.)

Now it’s the United Kingdom’s turn. Last year, the Conservative government announced an “independent review into the future of high-quality journalism in the U.K.,” to be led by Dame Frances Cairncross. (Perhaps more important than her damehood were her 30-plus years working in the newsrooms of The Guardian, The Economist, and The Times as both a reporter and editor.) Earlier today, the Cairncross review, as it’s become known, released its findings and recommendations.

Cairncross didn’t land too far away from where these commissions usually do: a mix of tax incentives for media companies or their customers, some form of direct government funding for either innovation or targeted media sectors, and a lot of fist-shaking in the general direction of Facebook and Google. But there are few interesting twists. Here’s a brief summary of what the Cairncross review, which you can read in full here, recommends:

1. New codes of conduct to rebalance the relationship between online platforms and publishers: Those online platforms upon which publishers increasingly depend for traffic should be required to set out codes of conduct to govern their commercial arrangements with news publishers, with oversight from a regulator.

2. Investigate the workings on the online advertising market to ensure fair competition: The Competition and Markets Authority should use its information-gathering powers to conduct a market study of the online advertising industry.

3. News quality obligation: Online platforms’ efforts to improve users’ news experience should be placed under regulatory supervision. Platforms have already developed initiatives to help users identify reliability and the trustworthiness of sources.

4. Media literacy: The government should develop a media literacy strategy, working with Ofcom, the online platforms, news publishers, broadcasters, voluntary organisations and academics, to identify gaps in provision and opportunities for more collaborative working.

5. The BBC’s market impact and role: Ofcom should assess whether BBC News Online is striking the right balance between aiming for the widest reach for its own content on the one hand and driving traffic from its online site to commercial publishers (particularly local ones) on the other. The BBC should do more to share its technical and digital expertise for the benefit of local publishers.

6. Innovation funding: The government should launch a new fund focussed on innovations aimed at improving the supply of public-interest news, to be run by Nesta in the first instance, and in due course by the proposed Institute for Public Interest News.

7. New forms of tax relief: The government should introduce new tax reliefs aimed at (i) improving how the online news market works and (ii) ensuring an adequate supply of public-interest journalism.

8. Direct funding for local public-interest news: The Local Democracy Reporting Service should be evaluated and expanded, and responsibility for its management passed to, or shared with, the proposed Institute for Public Interest News.

9. Establish an Institute for Public Interest News: A dedicated body could amplify existing and future efforts to ensure the sustainability of public-interest news, working in partnership with news publishers and the online platforms as well as bodies such as Nesta, Ofcom, the BBC and academic institutions.

For those who don’t speak British, Nesta is a government-created “innovation foundation” (“We exist to back innovations for the common good. We balance the distortions that drive too much investment in innovation either to harmful or trivial ends”), and Ofcom is Britain’s chief broadcasting regulator.

As one might imagine, it’s those first three recommendations — the ones that seek to reshape and reduce the power of Google and Facebook — that have gotten the most attention. First, those “new codes of conduct”:

Those platforms on which publishers increasingly depend should be required to each set out codes of conduct to govern their actions towards news publishers. These codes should be subject to the oversight of a regulator (which must have access to economic and digital expertise). In the first instance, the relevant platforms should develop their own codes, but with guidance from the regulator on what should (and should not) be included. If the regulator believes the codes are not sufficient, or do not conform to its guidance, it should be empowered to develop a statutory code that applies to all of the relevant platforms.

The review compares this idea to a regulatory scheme already in place for supermarkets, which should be appealing to the future-of-news/future-of-grocers crossover crowd.

What might these codes include? Some of the review’s suggestions:

— A commitment not to index more than a certain amount of a publisher’s content without an explicit agreement to do so (i.e. how much of a publisher’s article should be included in search results, on Google News or on Facebook’s news feed). While Chapter 4 suggests indexing has, to date, increased traffic to publishers’ websites, there is a risk that platforms could include “too much” of publishers’ content on their websites, and thereby reduce click-through rates.

— A commitment from platforms not to impose their own advertising software on news publishers when they use platforms’ publishing software (e.g. AMP and Instant Articles). In other words, a platform should not use its position in one market to strengthen its position in another.

— A pledge to give publishers early warning of changes to algorithms that may significantly affect the way in which their content is ranked.

— A commitment to provide transparent terms in relation to shares of online advertising revenues, and for these to be verified by third parties.

— A pledge to work collaboratively with publishers in determining how news content is presented on their platforms (for instance, design and branding).

— A promise to help publishers better understand a platform’s rules for ranking content.

— An offer to share with the publisher some information on the behaviour of its readers on the platform to enable the publisher
to understand their behaviour — within the limits of data protection law.

These are proposed only as ideas for future negotiation, but you can probably see the potential points of friction. (I’m also not sure how much these would help publishers, honestly. A number of them reflect the status quo, and while converting that into a stated commitment would be welcome, it wouldn’t change much, either.) The review rejected the idea of setting aside antitrust concerns to let the British press negotiate terms with Google and Facebook as a whole — but that means it’s recommending each publisher negotiate its own terms individually, which does not seem like a standard those companies would be eager to sign on to.

And if these negotiated codes don’t work out? The review says it expects the platforms “to engage constructively. If they do not, or this approach does not sufficiently constrain their behaviour, government should implement stronger measures.” That’s the stick here.

How about that “news quality obligation”?

This Review recommends that government should place an obligation on the larger online platforms to improve how their users understand the origin of an article of news and the trustworthiness of its source, thereby helping readers identify what “good” or “quality” news looks like. As the platforms understand best how their users engage with news content on their websites, they are uniquely well-placed to help improve their users’ ability to discern accurately the quality and type of information they see. But while each platform should devise solutions which best fit the needs of their particular users, their efforts should be placed under regulatory scrutiny — this task is too important to leave entirely to the judgment of commercial entities. This is a role that the platforms are already starting to accept as a public responsibility — and indeed as a business interest. Now, with the involvement of a regulator, they need to be asked to define objectives and measure improvements.

Initially, the only requirement on platforms would be a reporting one. The sole responsibility of the regulator would be to gather information on the steps the platforms are taking to improve people’s awareness of the origins and quality of the news they are reading. The regulator’s information-gathering powers should, over time, allow a better understanding of what platforms can and cannot do to improve on the status quo. If it becomes clear that efforts have not increased the reach of high quality news, or had a measurable impact on the quality of people’s engagement with online news, (as measured for instance by Ofcom’s News Consumption Survey), it may be necessary to impose stricter provisions.

In the longer term, armed with a better understanding of what is possible, the regulator should seek to develop, in collaboration with platforms and with input from publishers, a set of best practice guidelines for how news content should be presented on online news distribution platforms. This should include consistent indicators or measures, which can be used to judge improvements in the public’s understanding of what constitutes quality news, and what is disinformation. Government will need to undertake further work to develop and test effective mechanisms to do this.

Ultimately, there is a much broader debate to be had about the level of responsibility that ought to be accorded to online platforms in relation to the content they host. It will be important to ensure that this Review’s proposals, which relate specifically to the treatment of news content, fit within the wider policy context.

In other words, it’s about putting the platforms on notice that they should be working on this stuff — not a set of specific prescriptions. At least at first.

The strength of the BBC also makes the sort of questions this review considered distinctive in the U.K. — certainly when compared with the United States, but also with places like Canada and Australia. (As of 2014, the U.K. spent twice as much per capita on its public service broadcasters than Australia does — along with about 4 times what Canada spends and 38 times what the United States spends.)

The Cairncross review did not review the BBC itself (“the biggest public intervention in the UK media market,” it notes), but it does recommend that Ofcom formally investigate a longstanding complaint of for-profit British publishers — that the BBC produces so much content online that it crowds out private-sector competitors.

The Review…heard arguments that the BBC’s provision of online news, bolstered by “soft” and magazine-style content, was crowding out other news providers, and causing particular harm to publishers which wanted to build subscription businesses. In addition, some of those who submitted evidence maintained that the BBC does too little to drive traffic from its online site to commercial publishers and especially to local papers, particularly when these were the original source of a story…

It seems unlikely that [the BBC’s] news provision — free at point of use (and completely free to anyone who has not paid the licence fee) — has much effect in undermining people’s willingness to buy subscriptions. After all, it is not alone in offering high quality news without directly charging for access. Sky News online, The Guardian, the online Independent and indeed most regional and local papers also do exactly that. As for “soft” content, the BBC argues that a diverse spread of material is essential in order to serve all audiences, especially the young, and may indeed lure readers to public-interest news, which might not be their first priority.

This Review finds merit in these arguments. Given its unique role and unparalleled reach, the BBC’s continued ability to attract and retain engagement from all ages and groups in society, at this time of rapid change in media consumption, is extremely important. However, it is in the BBC’s interests, as well as that of licence-fee payers and commercial news publishers, that the BBC’s role in the market is clearly defined…

The Review recommends that Ofcom should review to what extent BBC online content acts as a substitute for, rather than a complement to, the offerings of commercial news providers, and what measures might reasonably be required of the BBC to reduce substitution. Ofcom should ask whether, in its pursuit of younger audiences, BBC News Online goes beyond the BBC’s core public purposes, and inappropriately steps into areas better served by commercial partners. In the light of its conclusions, it should clarify and confirm appropriate boundaries for the future direction of BBC online content. This should address the arguments put forward to this Review that, if the BBC moves too far into “softer” news, it jeopardises the wider market’s ability to make money from news. In addition, Ofcom should consider how far the BBC can create links with local news publishers in ways that do not conflict with its Charter obligations, and how far it supports the wider news sector, by attributing content and linking to other news sources.

It remains to be seen what findings an Ofcom review might make. But in many ways, this feels like a much more significant part of the review than its rather limited provisions regarding the tech giants. Even a strong and vibrant BBC is not sufficient to meet all British information needs, of course — but its power and position in British life is a huge counterweight to the private-sector news industry’s troubles, one many other countries would love to have. It’d be a real shame to weaken the BBC in the name of propping up for-profit companies — most of which will still have very uncertain futures even after such a move.

The review also recommends both sorts of tax relief these reviews often do: incentives to encourage donations to news organizations (“news organisations are finding it almost impossible to acquire charitable status under the current framework”) and incentives to subscribe to online news (“zero-rating of VAT to digital newspapers and magazines, including digital-only news publications”).

Then there’s that new “Institute for Public Interest News”:

Its strategic objective would be to ensure the future provision of public-interest news. It should build strong partnerships with the BBC, with Facebook, and indeed with Google, which has been one of the bigger contributors to innovation in local news and told the Review it was keen to see such a body coordinate and guide interventions and experiments.

(I think some might argue that “one of the biggest contributors to innovation in local news” part.)

Among the things this body would do:

— Evaluate the Local Democracy Reporting Service, and then take over administration of the scheme, including monitoring and assessing its impact, ideally in partnership with the BBC.

— Collaborate with partners on funding proposals, and provide a central focal point for the many institutions seeking to contribute funds, organisation or ideas: not just the BBC but also the platforms, industry bodies, and philanthropists. The Institute, constituted to be independent of government interference and commercial interests, should act as a channel for funding to the sector.

— Provide direction to, and in time manage, the new innovation fund once it has been established by Nesta, as set out above.

— Become a centre of excellence and good practice for public-interest news, carrying out or commissioning research, building partnerships with universities, and developing the intellectual basis for measures to improve the accessibility and readership of quality news online.

— Use its convening power to encourage the adoption of proven good practice across the industry. For example, all publishers, including those producing local and popular or tabloid news, should understand and consider the value of having registered users who log on to their product. Acquiring this data has the potential to bring substantial benefits both for developing reader services and for selling advertising.

— Work with relevant partners in developing ways to increase media literacy and trust in journalism among the adult population in particular.

— Conduct research and collect information about the challenges faced by the newspaper industry to inform consideration of mergers, especially among local and regional publishers, by the Competition and Markets Authority.

— Liaise with public bodies, to help them present information in ways that are more accessible to public-interest journalists. This might include reforms to the way courts and inquests report their work and their decisions.

Reaction to the report has generally been positive in the news industry. Local and regional publishers like it. (“We hope that the recommendations are taken forward on a cross-party basis as quickly as possible.”) The News Media Association and the Society of Editors like it. The Times seems to like it, though most of the story’s behind the paywall, so I can’t be sure. (“A healthy democracy relies upon a healthy media. Yet the Cairncross review into the future of the news industry, published today, confirms that there is nothing healthy about the state of British journalism.”) The Telegraph says it “deserves a cautious welcome”:

Dame Frances sees the goal of any intervention as not to protect publishing companies themselves but “to advocate measures that will ensure the market in which they operate is efficient, and to defend their most democratically significant outputs”. She rightly says society should care about the disruption of journalism, and of high-quality journalism in particular.

This is a wide-ranging report whose conclusions need to be absorbed by the industry and the Government. We would need to be convinced, for instance, about the need for an Institute for Public Service News, which would channel finance into those parts of the industry “deemed most worthy of support”. Deemed by who and on what criteria?

The review needs also to be read by managers at the BBC, the biggest player in the news dissemination world. Dame Frances asks the regulator Ofcom to consider whether BBC News online, subsidised by the licence fee, “inappropriately steps into areas better served by commercial partners”. It is time the BBC took this more seriously.

But voices further left raised a few objections — mainly to defend the BBC and to wish the review had been much harsher to Google and Facebook. Here’s the Labour Party’s shadow culture secretary, who said going after the BBC is “barking up the wrong tree.”

While [Dame Frances] has recommended an inquiry into BBC news online, the real problem that the government must deal with is the duopoly in digital advertising, with over half of all revenues going to Facebook and Google. As long as tech giants continue to completely dominate the market it’s difficult to see how a sustainable financial footing for journalism can be achieved.

And here’s the National Union of Journalists:

The tax concessions and other measures she recommends are to be welcomed, but I hope this has not been a missed opportunity. An institute for public interest news is an interesting idea, which recognises the market’s failure in providing public interest journalism, and an innovation fund looking at new models to redress this is welcome.

But letting the tech giants off the hook sidesteps the real issues of how they get a free ride with the content they suck up online and disseminate on their platforms. We wish Dame Cairncross had been braver in making Facebook and Google responsible for the news they exploit.

Seeing the BBC served up once again as a bogeyman and convenient cash cow is also an affront to the vital role of public service broadcasting in our democracy and its massive contribution to the broader creative industries. The BBC already funds the local democracy reporter scheme and its technical innovations such as the iPlayer led the way and has been used by other broadcasters. It’s a nonsense to suggest that BBC online has destroyed local newspapers — as the report says, the newspaper groups went on costly acquisition sprees before the market collapsed in the late 2000s and then cut investment and sacked hundreds of journalists to maintain profit margins. BBC Online is a trusted and much-used source of news, it is not the problem here and its future must not be imperilled.

And as for the entities that could be most directly impacted by these recommendations? A BBC spokesperson argued “there is no evidence of the BBC crowding out other providers…It’s vital that people of all ages have access to impartial news which is relevant to them and we provide younger audiences with a wide range of stories. We’re happy to look at what more we can do to share our technical and digital expertise for the benefit of local publishers but, as the review itself says, any curtailing of the BBC’s news offer would be counterproductive.”

And Facebook and Google each issued broad, non-committal statements. See if you can tell which is which:

We are committed to supporting vibrant and sustainable quality journalism, directing our users to news websites more than 10 billion times a month and sharing more than 70% of any revenue generated from our ad technology with news publishers. We have worked closely with the Cairncross inquiry and look forward to discussing the proposals further to ensure sustainable, high quality journalism in the UK.

We’re deeply committed to supporting publishers in the UK, and to making sure that people see credible news on Facebook. We have engaged fully with Dame Cairncross and her team during this process, and are reviewing the recommendations put forward today…We’ll continue working closely with the government, policymakers and publishers as newsrooms seek long-term, sustainable business models, and people seek credible news on Facebook.

Darn, that last word gave it away.

POSTED     Feb. 12, 2019, 2:54 p.m.
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