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News Corp Calls for Regulation of Facebook and Google

Regulatory oversight is imminent

In an op-ed in today’s Wall Street Journal, Robert Thomson, CEO of News Corp, which owns the Journal, called for regulation of the digital gatekeepers of the 21st century, arguing that whatever they may call themselves, they are now de facto publishers and distributor of both original content and news.

Thomson contends that Facebook and Google have distorted the publishing playing field by abusing their monopolistic power, by crushing any potential competition and by exerting an undue and insalubrious influence over society, most notably, for news publishers.

Although he reluctantly calls for regulation, Thomson makes a compelling argument that in the absence of oversight, news corporations will be driven to extinction by the unforeseen usurpation of the traditional publishing function in society by social media companies. Thomson believes the only model that will preserve the function of the press in a democracy is a subscription based model and divesting Facebook of its unwieldy power to crush competition by opening up the field to other digital players.

“The digital world has brought manifold benefits, but it shouldn’t surprise us that there are problems with provenance and opportunities for bad actors to damage democracies. Thankfully, there is also a more contemplative crew of contemporary politicians and regulators, not merely dazzled by the digital, or falling for the fashionable.

Thomson sees hope on the horizon for thwarting the untrammeled power of Facebook and Google,

“ At last we are discussing more seriously the fine lines between engagement and addiction, between repurposing and piracy, between belonging and bullying, between identity and insecurity, all of which are magnified digitally.”

One certain outcome will be less dominance by a few players whose reach across horizontals and deep into verticals is a fundamental contradiction, whether in content or in commerce.”

Though Thomson’s entreaties for regulatory oversight are rooted in self-interest, he nonetheless raises some interesting issues related to the still unchecked, deceitful business of data harvesting without disclosing to users the type of information Facebook is transferring to third parties for enormous profit. When questioned about their data privacy abuses, Facebook was duplicitous, claiming they were concerned about users privacy while simultaneously trying to quash any regulatory action that would put their lucrative business model in jeopardy.

One of the most blatant and surreptitious data collection techniques employed by Facebook is their gathering and tracking information for those who don’t event visit the Facebook site. Thomson acknowledges this manifestly deceptive business practice,

“A few years ago, we found they were tracking our users even if you didn’t click on the Facebook logo. We complained, and eventually the problem was dealt with. No doubt many media sites are still being tracked by Facebook without understanding the extent of the surveillance.”

Were this type of conduct practiced in any other industry with impunity, there would be a public outcry. The fact that a company with a market capitalization in excess of $500 billion continues to track users’ movements on the internet in a clandestine manner without users knowledge, is a disgrace. Why the Republican Party is not front and center on this issue is mystifying.

As I noted previously, Facebook needs a housecleaning. Although the reasons I believe regulatory action is warranted may differ from Thomson, there is growing consensus that Facebook’s power needs to be curbed, even if it means revisiting outdated anti-trust statutes that are no longer effectual in a digital publishing and data surveillance world.

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