The Nordics need to toughen up on Tech Giants

Think of the Vikings – they sailed in from nowhere with weapons and brutal intentions. It was said that they stole, they raped and they killed, but even though the truth may have been something less terrible, there can be no doubt that the Tech Giants of today are today’s Vikings.

They attack almost every country with their financial and political power that allows them to steal advertising from our independent media; that allows them to avoid paying taxes, which the rest of us must pay; that allows them to inflict severe damage on our democratic systems by distributing fake news; and by allowing them to operate like this with little effective legal recourse.

Consumers and companies are being held to ransom by their systems that are not transparent nor honest. They claim to be innovative and working for good but their growth and almost monopolistic position has given them too much power.

Instead of limiting them or breaking them up, our politician’s bow to them and shower them with taxpayers’ money. 

In the Nordic area we have political parties welcoming the likes of Google and others to set up cloud computing centres. These centres offer few jobs, consume vast amounts of energy and pay very little tax. A few local companies get some work but while this is going on nothing happens to save our independent media. These same politicians do nothing for fear of upsetting these mammoths.

However, at least one country has started a discussion about what we, the consumers and the our regulators, should be doing. 

They have been thinking that the digital world from Facebook and Google is the best thing since toast was invented.

In this area, the Australians have made useful headway in a 2018 Preliminary Report for an inquiry into the important questions about how these tech giants are operating. We will see its final report this summer 2019, but the opening words of the report say everything that Scott Galloway’s book, “The Four”, so well describes:

“The Australian Competition and Consumer Commission (ACCC) is holding an inquiry into the impact of online search engines, social media and digital platforms on competition in the media and advertising services markets… Digital platforms offer innovative and popular services to consumers that have, in many cases, revolutionised the way consumers communicate with each other, access news and information and interact with business. Many of the services offered by digital platforms provide significant benefits to both consumers and business…

… While the ACCC recognises their significant benefits to consumers and businesses, there are important questions to be asked about the role the global digital platforms play in the supply of news and journalism in Australia, what responsibility they should hold as gateways to information and business, and the extent to which they should be accountable for their influence.”

The tech giants operate in the same manner everywhere around the globe, the Australians are just more determined than most countries to get some regulation in place before their media sector is driven into the pauper’s workhouse. 

The same points are made by Scott Galloway in his book, “The Four”, in its typically direct language;

“What’s clear is that we need business leaders who envision, and enact, a future with more jobs—not billionaires who want the government to fund, with taxes they avoid, social programs for people to sit on their couches and watch Netflix all day. Jeff, show some real fucking vision.”

This sort of tough language puts our politicians and lobby groups on notice that they must act.

As advertising revenues fall then there is less money to employ journalists and develop an independent media – here are the figures for Australia:

The report points out to where the disruption of the Australian news media is leading – it is the same in all western countries where there is a continuing reduction in journalist numbers. This reduction is dangerous given the critical role news and journalism perform in society. Journalists expose corruption, create public debate and hold governments, corporations and individuals to account through their questioning and investigation. 

The report expresses strong disquiet about the substantial market power that Google and Facebook use to control news referral services and sell their own products. 

It is also concerned about the lack of transparency. It difficult for advertisers to understand the factors influencing the display of their advertising to consumers and, in particular, and to identify whether Google or Facebook are favouring their own business interests at the expense of advertisers! 

The lack of transparency also means that advertisers are unable to verify whether advertisements are served to their intended audience.

Consumers are facing big challenges over privacy and transparency. Many feel they have to join or use these platforms, and agree to their non-negotiable terms of use, in order to receive communications and remain involved in community life… 

There is also a risk that consumers accessing news via digital platforms may be at risk of greater exposure to less reliable news and potential filter bubbles. I only have to mention the word “Trump” for readers to understand what is at stake.

Because these big techs are so large it is almost impossible for competition to enter the market and grow – as Scott Galloway writes in his book:

“No company is higher or farther to the right on this chart than Facebook. It crushes on both reach and intelligence. This power gives it a huge edge in the digital world. Facebook has access to quinine in a mosquito-infested market—digitally savvy talent. Smart people want to work at a dominant company that they think gets it. Its prospects are bright, opportunities everywhere. There are interesting problems to solve, and ridiculous amounts of money in play. Few firms had the stones, or firepower, to drop $20 billion on a five-year-old company, WhatsApp.”

So what needs to be done? According to the Australians – a lot! They have listed over a dozen recommendations for new legislation that they believe will level the playing field and make a difference. The list is too long to write here but there are clear steps to be taken to reign in these modern Vikings.

You may have noticed that the EU has been fining these juggernauts on a regular basis but so far they have not attacked the roots of the problems as the Aussies are proposing. These fines are chicken feed for these tech giants and do little or nothing to change the course of their operations. 



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