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Facebook faces a global backlash over its bid to ‘bully’ Australia

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By Hanna Ziady, CNN Business
Updated 7:19 AM ET, Fri February 19, 2021

London (CNN Business) — Facebook’s decision to block people from sharing news in Australia has been rebuked by lawmakers around the world, raising the specter of a much wider showdown between the world’s biggest social media platform and the governments and news organizations fighting to check its power.

Elected officials and media publishers in the United Kingdom, Canada, Germany and the United States slammed Facebook’s actions on Thursday, suggesting they were anti-competitive and underscored the need for a regulatory crackdown.
“It is one of the most idiotic but also deeply disturbing corporate moves of our lifetimes,” Julian Knight, the lawmaker who chairs the Digital, Culture, Media and Sport Committee in Britain’s parliament, told broadcaster Sky News.
In a statement shared with CNN Business, Knight said that UK lawmakers will use pending legislation aimed at regulating social media companies to ensure platforms such as Facebook promote “trusted news sources.”
    “This action — this bully boy action — that [Facebook has] undertaken in Australia will I think ignite a desire to go further amongst legislators around the world,” he added in an interview with Reuters.
    David Cicilline, a Democratic congressman from Rhode Island who chairs the House Antitrust Subcommittee, echoed that sentiment. He said that “if it is not already clear,” Facebook’s actions in Australia demonstrate that the company “is not compatible with democracy.”
    “Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power,” he said in a post on Twitter (TWTR).
    Canadian heritage minister Steven Guilbeault said on Twitter that “Facebook’s actions are highly irresponsible and have jeopardized the safety of the Australian people.” “We will continue to move forward to put in place fair legislation between news media and web giants,” he added.
    Publishers seized the opportunity to fire shots at the platform, which dominates the digital advertising business along with Google. In Germany, the Federation of German Newspaper Publishers (BDZV) called on governments to restrict Facebook’s influence.
    “It is high time that governments around the world limit the market power of gatekeeper platforms,” said Dietmar Wolff, general manager of BDZV. “The fact that a platform simply shuts down pages at will in order to build up political pressure shows where the problem with the American network monopoly lies on the internet,” said Wolff.
    The backlash followed a decision by Facebook on Wednesday to bar Australians from finding or sharing news from local and international outlets on its platform, escalating a fight with the government over a new law that will force tech companies to pay news publishers for content posted to their platforms. Sharing news links from Australian publishers is also restricted outside the country.
    Facebook (FB) and Google (GOOGL) have tussled with publishers for years over how they display their content. Media companies, which have lost out on billions of dollars in advertising revenue to online platforms, argue the tech giants should pay them for showing their content. Defenders of the platforms say they drive huge audiences to news websites at no cost.
    Lawmakers, meanwhile, are already taking steps to curb the power of social media platforms in favor of news organizations. For example, new copyright laws in the European Union led Google to agree to pay French news publishers for their content, in a deal that could be replicated elsewhere.
    Facebook’s move came after months of tension with the Australian government over the proposed law, known as the News Media Bargaining Code. The company believes it gives the government too much power to decide the price that platforms pay for news and which publishers are remunerated. Facebook also argues that the proposed law ignores the value that its services bring to publishers.
    The extent of Facebook’s influence was made clear when, alongside blocking news content, it inadvertently froze the accounts of fire and emergency services, domestic violence charities, and government health agencies. Facebook is reinstating pages that it didn’t intend to block.
    “It’s an illustration of the extraordinary power a private company wields in a public space,” said Rasmus Nielsen, the director of the Reuters Institute for the Study of Journalism. “Many governments and politicians around the world are concerned about that and want more direct political and regulatory oversight over how they wield that power,” he told CNN Business.
    “I personally think it’s quite problematic that Facebook has made this unilateral decision without warning or a transition period, but it’s a private for-profit company and they are doing what they believe is in their self interest,” Nielsen added.
    Henry Faure Walker, the chairman of Britain’s News Media Association, said that Facebook’s actions demonstrate why regulators need to coordinate globally to create a “truly level playing field between the tech giants and news publishers.”
    What Facebook did is “a classic example of a monopoly power being the school yard bully, trying to protect its dominant position,” added Walker, who is also CEO of Britain’s largest local newspaper publisher, Newsquest.

    Entrenching dominance?

    Both Facebook and Google have debuted programs to pay for news in recent years, as authorities around the world consider new laws to keep them in check. Facebook, for example, created Facebook News, a section of the app featuring curated news stories where selected publishers are paid for participating.
    In a bid to get ahead of Australia’s new legislation, Google took a very different approach to Facebook. In recent days, the search engine announced partnerships with some of the country’s largest media organizations, including Robert Murdoch’s News Corp (NWS) and Seven West Media.
    Google has signed deals with more than 500 publications worldwide since launching News Showcase, a product that gives publishers control over how their content is presented on the platform. News Corp said in a statement that it would contribute content to News Showcase from publications including the Wall Street Journal and The Times as part of its deal, in exchange for “significant payments” from Google.
    But that doesn’t mean the fight with Big Tech is over. News Corp CEO Robert Thomson said earlier this month that “new terms of trade will be introduced” in Australia “but that debate now extends across the globe.”
    “There is not a single serious digital regulator anywhere in the world who is not examining the opacity of algorithms, the integrity of personal data, the social value of professional journalism, and the dysfunctional digital ad market,” he said.
    Professor Charlie Beckett, the director of Polis, a media think tank at the London School of Economics, said that the danger with arrangements between tech companies and big publishers is that they come at the expense of smaller organizations that don’t have the negotiating clout.
    “So if you believe in a diverse, vibrant journalism industry, then this doesn’t seem to be helping that,” he told CNN Business.
      “The real loss [to news organizations] has been the fact that advertisers much prefer advertising on Google and Facebook and other networks and are much less interested in advertising on newspaper websites,” said Beckett. “That’s where the big money has been lost and this is not going to replace that money.”
      — Chris Liakos, Will Godley, Nadine Schmidt, Michelle Toh, Kerry Flynn and Brian Stelter contributed reporting.

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      Lyft focuses on seniors with new option to book rides by phone call

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      By Sara O’Brien, CNN Business
      Updated 12:50 PM ET, Wed February 24, 2021

      (CNN Business) — Lyft is adding an option to allow people to order a ride in a more retro way — by phone call — a year after Uber tried doing the same before shutting it down.

      The ride-hail company said Wednesday it launched a special service in dozens of Florida cities to allow people to call a number (631-201-LYFT) with a cell phone to book a car on weekdays from 8 a.m. to 8 p.m. It’s geared towards seniors and those without access to its app. Once a ride is booked, Lyft (LYFT) said it will communicate updates via text message.
      The service, which Lyft said it piloted in late 2020 in Miami before expanding to more Florida cities, is similar to one Uber announced last February. Uber’s service was only available in select markets — Arizona, Florida and New York City — for rides or meal deliveries, but by the end of 2020, the company paused the program.
      An Uber (UBER) spokesperson told CNN Business Wednesday that there was declining use of the service, with only a few hundred people a month using it. Uber’s service also allowed users to order food delivery. (Those who call the Uber hotline now are told they can request rides from the mobile site or app.)
        Sam Bond, regional director for Lyft in the Southeast, said in a statement that the company looks forward to “helping seniors access transportation to essential services and resources that may be currently out of reach without a car.”
        The company didn’t directly address why it believes the program will succeed where Uber’s stalled, only reiterated that it is dedicated to serving vulnerable and underserved communities.
          On an earnings call earlier this month, Lyft president John Zimmer said the pandemic “has amplified transportation and security, especially for seniors and vulnerable communities. We are committed to ensuring that transportation access is not a barrier to beating this virus.”
          At the end of 2020, the company announced a vaccine access program with a goal to provide 60 million rides to and from vaccination sites alongside JPMorgan Chase, Anthem Inc. and United Way.

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          Facebook will restore news in Australia after talks with the government

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          By Michelle Toh and Chandler Thornton, CNN Business
          Updated 11:08 PM ET, Tue February 23, 2021

          Hong Kong (CNN Business) — Facebook will restore news pages in Australia after the government agreed on changes to a planned media code that the company said would allow it to retain greater control over what appears on its platform.

          The announcement caps months of bitter dispute between the American tech firm and Canberra, which had been working on legislation that would force tech platforms to pay publishers for news content.
          The initial version of the legislation would have allowed media outlets to bargain either individually or collectively with Facebook and Google (GOOGL) — and to enter binding arbitration if the parties couldn’t reach an agreement.
          On Tuesday, the Australian government said it would amend the code to include a provision that “must take into account whether a digital platform has made a significant contribution to the sustainability of the Australian news industry through reaching commercial agreements with news media businesses.”
            Arbitration, meanwhile, will now only be used as a “last resort” following a period of “good faith” mediation.
            Facebook’s decision to restore news came as the Australian Senate discussed the latest iteration of the media law.
            “It’s always been our intention to support journalism in Australia and around the world, and we’ll continue to invest in news globally, and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook,” Brown said.
            Google, meanwhile, had already been trying to get ahead of the new legislation by announcing partnerships with some of the country’s largest media organizations, including Rupert Murdoch’s News Corp (NWS) and Seven West Media. Facebook revealed its own deal with Seven on Tuesday.
              Asked about Google’s partnerships last week, Australian Treasurer Josh Frydenberg alluded to the changes that were ultimately announced Tuesday. He said that “if commercial deals are in place, then it changes the equation.”
              — Kerry Flynn contributed to this report.

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              The worldwide web as we know it may be ending

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              By Rishi Iyengar, CNN Business
              Updated 12:00 PM ET, Tue February 23, 2021

              (CNN Business) — Over the last year, the worldwide web has started to look less worldwide.

              Europe is floating regulation that could impose temporary bans on US tech companies that violate its laws. The United States was on the verge of banning TikTok and WeChat, though the new Biden administration is rethinking that move. India, which did ban those two apps as well of dozens of others, is now at loggerheads with Twitter.
              And this month, Facebook (FB) clashed with the Australian government over a proposed law that would require it to pay publishers. The company briefly decided to prevent users from sharing news links in the country in response to the law, with the potential to drastically change how its platform functions from one country to the next. Then on Tuesday, it reached a deal with the government and agreed to restore news pages. The deal partially relaxed arbitration requirements that Facebook took issue with.
              In its announcement of the deal, however, Facebook hinted at the possibility of similar clashes in the future. “We’ll continue to invest in news globally and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook,” Campbell Brown, VP of global news partnerships at Facebook, said in a statement Tuesday.
                But if such territorial agreements become more common, the globally-connected internet we know will become more like what some have dubbed the “splinternet,” or a collection of different internets whose limits are determined by national or regional borders.
                The stakes will only get higher if more governments jump on the bandwagon.
                “It’s kind of a game of chicken,” said Sinan Aral, a professor at the MIT Sloan School of Business and author of “The Hype Machine: How Social Media Disrupts Our Elections, Our Economy and Our Health.”
                Aral says companies such as Facebook and Google will encounter a slippery slope if they start to exit every market that asks them to pay for its news, which would “severely limit” the content they can serve their global user base.
                “They have a vested interest in trying to force any one market to not impose such regulations by threatening to pull out,” he said. “The other side is basically saying: ‘If you don’t pay for the content, you’re not going to have access to our market of consumers or the content in this market.'”

                As the internet fractures, global regulators coalesce

                A fight over news in Australia is a relatively small part of the clash between tech and governments, which has largely been focused on issues such as censorship, privacy and competition. But the response to Facebook’s move in Australia has shown that a more international effort to rein in Big Tech may be gathering momentum — and with it, the potential for additional fracturing of how internet services function from one country to the next.
                As his government faced off against Facebook last week, Australian Prime Minister Scott Morrison issued a warning to the social media giant: what you do here may come back to hurt you in other countries.
                “These actions will only confirm the concerns that an increasing number of countries are expressing about the behavior of Big Tech companies who think they are bigger than governments and that the rules should not apply to them,” he said in a Facebook post. “They may be changing the world, but that doesn’t mean they run it.”
                On Tuesday, Morrison said Facebook’s decision to restore news was “welcome,” adding that the government remained committed to proceeding with its legislation to ensure “Australian journalists and news organisations are fairly compensated for the original content they produce.”
                Several other countries, including the United Kingdom and Canada are now considering similar legislation against social media companies — and many of those countries are talking to each other about how best to do that.
                “It would be extremely useful if governments would come together in some kind of transnational process and come up with a treaty or some kind of standard about who gets to reach out and affect content and information outside their national territory,” Keller said, “because that’s what a lot of them are trying to do, but they haven’t, and so as a result you get this very fragmented patchwork.”
                  If that increased fragmentation is allowed to reach its natural conclusion, however, the consequences could be dire.
                  “If the eventual outcome of that is that we have social media platforms in every major country or market that are separate, then what we will have is an information ecosystem that is completely bifurcated or splintered across the globe,” Aral said. “What that portends is a citizenry that has completely different sets of information about local events, about world events, and perhaps a very splintered worldview of reality.”

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                  Former WeWork CEO in talks to get nearly $500 million in SoftBank settlement

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                  By Sara Ashley O’Brien, CNN Business
                  Updated 2:29 PM ET, Tue February 23, 2021

                  (CNN Business) — Adam Neumann, the disgraced former CEO and cofounder of WeWork, may soon have a massive payday as part of a possible settlement with SoftBank, the company’s largest investor, but the amount under discussion is far less than the golden parachute originally offered.

                  Neumann, who stepped down in late 2019 after a disastrous attempt to take WeWork public, could be eligible to sell nearly $500 million worth of his shares to SoftBank as part of a $1.5 billion stock buyback program for early WeWork employees and investors, according to a source familiar with the matter. The deal is not yet finalized.
                  The deal is part of a settlement under discussion to resolve a long-simmering legal dispute between Neumann, WeWork and SoftBank after the Japanese conglomerate walked away from a $3 billion WeWork share purchase agreement.
                  The terms of a possible settlement were first reported by the Wall Street Journal. A second source familiar with the matter told CNN Business that the deal is close to being finalized but could still fall through.
                    WeWork, SoftBank, and a representative for Neumann declined to comment.
                    The settlement is half of what was previously on the table when SoftBank agreed to bail out the co-working company after a period of turmoil. As part of the deal in fall of 2019, Neumann departed and had the chance to sell back nearly $1 billion of his shares — an opportunity that infuriated some workers.
                    Under Neumann’s leadership, WeWork raised billions of dollars, scaled its coworking operations to hundreds of cities around the world, and was valued at an eye-popping $47 billion during one investment round. But the company also failed spectacularly in its attempt to go public in large part because IPO paperwork revealed his unchecked power and numerous potential conflicts of interest, as well as WeWork’s staggering losses.
                      In April 2020, SoftBank abandoned plans to buy $3 billion in WeWork stock from Neumann and others, citing certain conditions of the deal that hadn’t been met, including the existence of pending criminal and civil investigations into the company, global restrictions related to the coronavirus, and the failure to restructure a joint venture in China. In response, Neumann and a special committee of WeWork’s board brought lawsuits.
                      News of a possible deal comes as SoftBank and WeWork attempt to turn the page on the Neumann chapter of the company. As the Journal reported, WeWork is in talks about a potential deal to merge with a special purpose acquisition company, or SPAC, to fulfill its ambitions of becoming a public company at long last.

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                      The hot new thing in tech: speaking into your phone

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                      By Kaya Yurieff and Rishi Iyengar, CNN Business
                      Updated 9:03 AM ET, Wed February 24, 2021

                      (CNN Business) — Before last year, 28-year-old Meredith Giuliani thought voice notes were “kind of weird,” and she mostly stuck to texting. But after the pandemic hit, audio messages became a daily routine for her and many of her friends.

                      “This is my way to debrief and tell everybody what’s going on,” she told CNN Business. “It’s not like it used to be where I would wait until I was going to see my friends over the course of the next week for drinks or for brunch.”
                      For years, Apple and others have offered the option to record short messages and send them via text and chat apps. But the format has gained new appeal for many in the United States during the pandemic as we approach a year of limited opportunities to socialize with friends, family and coworkers.
                      Romina Hyskaj, a 23-year-old recruiter who lives in New York City, uses them mainly to keep in touch with her parents who live six hours away, noting that “it can get your tone, attitude, or joke across.” Nick Hofstadter, a 38-year-old luxury travel adviser in Los Angeles, sends voice notes to a handful of close friends, mostly to tell funny stories with a more “dramatic effect” and to avoid sending long text messages. (He prefers using voice notes on iMessage over Instagram so he can listen to it before sending.)
                        And it’s not just voice messages. Voice is having a moment — and the tech industry is taking notice.
                        Hall said an added part of the appeal — beyond conveying more emotional nuance — is how easy voice notes are to record, store and replay.
                        “Back when we had answering machines, people used to save important messages, particularly from loved ones, sometimes for as long as the machine had space and power to store those messages,” he said. “People don’t use voicemail in the same manner, partly because the phone is not the easiest way to leave a message for another person — that would be a text.”
                          Prior to the pandemic, Giuliani said there were many friends she didn’t talk to daily. Voice notes have changed that.
                          “It’s kept some of my friends and I really close together,” she said. “We send over voice notes and we’re chatting every single day, way more than we ever did before the pandemic.” She added: “I can’t believe that we didn’t before.”

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