Power of big tech will remain a thorn in media’s side in 2021
Covid-19 crisis has opened the industry’s eyes, but old problems haven’t gone away
Are Facebook and YouTube’s owner Google ‘too big to care?’
On the cusp of 2020, I wondered in print if the decade to come would prove to be the Stuck Twenties, the Bubbly Twenties or the Thank-You-Next Twenties for the media industry. A year later, the signs point firmly to Thank-You-Next.
One question I threw out then – “what will our new preoccupations be?” – now seems laced with innocence, given the answer, just months later, would be led by daily death graphs. But though the January headlines are doused with the worst déjà vu, a new year is still a new year and the media industry enters 2021 with its definition of risk appropriately expanded and its eyes opened wider than ever to the potential crises ahead.
Last March, all forecasts for advertising revenues in 2020 dissolved on contact with Covid-19, and any predictions to emerge for 2021 so far are contingent on everybody’s best guess for vaccine rollout programmes, the strength of the associated economic recovery and the go-ahead for delayed cyclical events (the Tokyo Olympics, the UEFA European Championship and other fun stuff).
Forecasts from media agency IPG Mediabrands, which published its global and local outlook in December, have already thrown up one interesting quirk: all media formats in the Irish market, it says, are expected to see some growth in ad revenues in 2021.
Compared to 2020, that’s not hard, you might say, and the overall projection of an 8.4 per cent uplift in the market is indeed substantially supported by the expected resumption of double-digit growth for the digital sector.
Still, if the Irish print market does manage to post a higher ad sales tally than it did in the disastrous 2020, it will be the first time it has recorded a year-on-year rise in quite a while, and probably the last time it does so for a while. The year will look, from a distance, like a gravity-defying blip in the pattern of long decline.
One pre-pandemic trend that hasn’t been swept away by Covid-19 is increasing US political opposition to Google and Facebook as they are configured today. The final months of 2020 saw a number of antitrust lawsuits taken by US states against the two tech giants, with the suggestion of asset sales now regularly floated as the possible answer to their dominance.
As some 38 states and territories accused Google parent company Alphabet of abusing its market power to try to make its presence felt in cars, TVs and home speakers, Nebraska attorney general Doug Peterson delivered a quote for the ages. “Fines are like kicking gorillas in the shin,” he said, hinting at broader, more effective “remedies”.
Just before Christmas, the Wall Street Journal reported that Google and Facebook had agreed to “co-operate and assist one another” if an alleged pact to work together in online advertising ever came under scrutiny. This was after a lawsuit by 10 Republican-led US states said Google had violated antitrust law by colluding with Facebook – in a deal code-named “Jedi Blue”, according to the Journal – to boost its online advertising business and shut out rival ad exchanges. Google denies any wrongdoing.
The lawsuit in question was led by Texas attorney general Ken Paxton, who had his own message for big tech: “It’s time for them to learn the hard way that you do not mess with Texas.”
Facebook, meanwhile, has been accused by 48 attorneys-general and the Federal Trade Commission (FTC) of maintaining a “years-long course of anti-competitive conduct”, including a “buy or bury” approach to rivals. The breaking up of Facebook and its two most-prized acquisitions, WhatsApp and advertising golden-child Instagram, is on the table, the FTC insists.
These US legal actions might all go nowhere, but at least they will likely do so faster than Brussels’ slow attempts to curb the rival-crushing power of the technology giants. These efforts started about a decade before the US woke up, and yet Europe has only a modest amount to show for its head-start.
At home, a change in approach is finally in the offing too, though nothing quite in the nuclear, don’t-mess-with-Texas vein. The Government’s Online Safety and Media Regulation Bill proposes a system of shin-kicks for internet companies that fail to comply with harmful content standards. In itself, this marks a major – and majorly overdue – expansion of media regulation and is a commendable bid to tackle the spread and amplification of criminal online material, cyberbullying and material promoting eating disorders, self-harm or suicide.
But a piece of national legislation such as this cannot do anything to address the elephant that is the historic size and power gained by companies like Google and Facebook in the past decade, often without even a raised eyebrow from competition authorities.
‘Too big to care’
The observation by EU internal market commissioner Thierry Breton that the behemoths of Silicon Valley have become “too big to care” is cited as the rationale for the European Commission’s latest push to put manners on big tech through the Digital Markets Act and the Digital Services Act. But the phrase contains its own acknowledgement of the immense challenge now facing politicians and regulators. It will not be surprising if “too big to care” translates as “too big to touch”.
Of course, not even the mighty Google or Facebook could have triggered the sharp single-year plunges in the traditional media advertising market seen last year: Irish television and radio revenues fell about 20 per cent in 2020, while print advertising plummeted by an estimated 30 per cent.
After a year in which “nobody knows anything” – the late screenwriter William Goldman’s line about Hollywood’s record of predicting hits and flops – was a lesson freshly learned by all, these companies now look like reassuringly familiar foes.