U.K. Should Regulate Power of Facebook Over News, Report Finds

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(Feb 12): The U.K. should tackle the power of Silicon Valley over Britain’s news publishers and push U.S. tech giants to promote quality journalism, according to a report commissioned by the government to assess remedies for the struggling local press.

Companies like Alphabet Inc.’s Google and Facebook Inc. should be obliged to nudge readers towards quality journalism, according to the Cairncross Review, published Monday.

“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 judgement of commercial entities,” according to the authors of the review, which is led by Frances Cairncross, an economist and former journalist.

The U.K.’s Department for Digital, Culture, Media and Sport is considering how to sustain high-quality journalism in a changing market as print circulations plunge and even new digital publishers like BuzzFeed Inc. make harsh retrenchments. The report focuses on themes including the role and impact of search engines, social media platforms and digital advertising.

As part of a code of conduct, the likes of Facebook and Google could commit not to impose their own advertising software -- like Facebook does with its Instant Articles, according to the review. Furthermore, the Competition and Markets Authority should investigate the online advertising market, which is dominated by Google, Facebook and Amazon.com Inc., and where intermediaries and margins are less transparent than those in print.

“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,” Tom Watson, deputy leader of the Labour Party and shadow culture secretary, said in an emailed statement.

The review also recommended:

Value-added tax relief for online news, and charity or creative-sector style relief for public interest news. The creation and funding of an independent Institute for Public Interest News for local and investigative reporting, which is generally unprofitable. It could resemble the U.K.’s Arts Council, channeling public and private funds into worthy parts of the industry. Subsidies to sustain local and public-interest journalism. Communications watchdog Ofcom should investigate whether the taxpayer-funded British Broadcasting Corp. is crowding out commercial journalism, and the BBC itself should do more to support local publishers. Government and the regulator should craft a media literacy strategy, as too many people “struggle to assess the reliability of the news they see online.” - Bloomberg