Victor Pickard
Various forms of misinformation and propaganda have plagued societies for centuries. However, today’s profound media power residing in one monopolistic platform arguably presents a unique challenge to democratic governance. Even as Facebook comes under increased public pressure to be held accountable for the misinformation it purveys and from which it profits, a core problem is often overlooked: the proliferation of so-called fake news is symptomatic of an unregulated news monopoly that is governed solely by profit imperatives. Facebook is not evil; it is merely the natural outgrowth of an information system governed by such an unaccountable, commercial logic.
Until we adequately diagnose the structural roots of the misinformation problem, potential solutions will remain elusive. Moreover, history shows us that expecting good corporate behavior simply by shaming information monopolies is a dubious proposition at best. Confronting the structural roots of this problem now will help prevent information monopolies from emerging in the future. This chapter will begin such a project by examining the systemic nature of what I refer to as the “misinformation society,” and it concludes with suggestions for radical reform.1
Donald Trump’s election exposed structural pathologies in the American media system. Mono-causal explanations of Trump’s ascendance that blame “fake news” are clearly insufficient—indeed, mainstream media contributed as much, if not more, to the lack of high-quality information leading up to the election—but widespread misinformation disseminated via Facebook is nonetheless a significant threat to democratic self-governance.2 As an algorithm-driven global editor and news gatekeeper for over 2 billion users, Facebook has tremendous power over much of the world’s information system. In the United States, where news is increasingly accessed through its platform, Facebook’s role in the 2016 presidential election has drawn well-deserved scrutiny. Reports suggest that fake news was widely circulated during the weeks before the election.3
Exacerbating the misinformation problem is a decreasing supply of reliable news media. Because Facebook (along with Google) is devouring the lion’s share of digital advertising revenue, institutions that provide quality news and information—the same struggling news organizations that are expected to help fact-check against fake news—are further weakened. Journalism in general, and local news in particular, is increasingly threatened by the Facebook-Google duopoly, which takes a combined 85 percent of all new U.S. digital advertising revenue growth, leaving only scraps for news publishers.4 According to one study, these two companies now control 73 percent of the total online advertising market.5
Thus far, technocratic discourses have dominated the discussion about misinformation. Suggested remedies typically involve a combination of media literacy and user responsibility; technological fixes such as new algorithms and policing specific ad networks; and crowdsourcing to the public or outsourcing to third parties like Snopes and other fact-checking organizations the responsibility of flagging fake news. Thus far, Facebook has taken few meaningful actions to address the problem, though this might change as the company continues to receive fines and threats, especially from Europe.
Meaningful competition to Facebook is unlikely in the near term, and allowing it to be governed solely by unfettered profit motives has created a number of social problems. Addressing these problems requires several steps. Facebook must be treated as a media company and held to norms of social responsibility. Thus far, Mark Zuckerberg has refused to even acknowledge that Facebook is anything more than a technology company.6 In the meantime, the repercussions of Facebook’s profit-driven control over the world’s media will likely only worsen. This is an untenable situation; democratic societies must challenge Facebook’s monopoly power on multiple fronts.
While no silver-bullet policy solution will likely present itself, the proliferation of misinformation is a serious social problem, and any social problem should be seen as a policy problem. Now is a rare—and, most likely, fleeting—opportunity to hold a public debate about what policy interventions are best suited to address the problem. Government, driven by social pressures from below and informed by public consent, has the power and responsibility to intervene. Ultimately, fake news is a structural problem; it will take structural reforms to fix it.
Facebook’s sudden fall from grace has loosened long-held verities. Regulating such firms was once unfathomable. Now even Republicans in Congress believe digital monopolies are too powerful and must face government intervention. The Cambridge Analytica scandal in the spring of 2018 helped kick-start a long overdue conversation about unaccountable monopoly power, its pernicious effects on society, and government’s role in stopping it. With implications far beyond Facebook, this could be a pivotal moment and a rare opportunity for structural reform.
But how can society seize it? As part of his apology tour, Zuckerberg himself conceded (at least publicly) an openness to regulation. So the real question becomes what kind of regulation? Do we repeat old mistakes and impose self-regulation requirements that will erode over time? Or do we subject Facebook’s monopolistic power to real public oversight and implement redistributive measures? Thus far, discussions have focused mostly on user privacy, which is vitally important. But we should consider a broader, bolder vision for what Facebook owes society in return for the incredible power we’ve allowed it to accumulate.
Journalism’s ad-revenue dependency has always been deeply flawed,7 but now the model is decimated—with devastating effects. Fewer revenues support fewer journalists, leaving newsrooms gutted and shuttered across the country. The newspaper industry has seen over half its workforce reduced over the past fifteen years. Entire regions of the country and severe social problems are barely covered in the news. This systemic market failure is not caused by Facebook alone, but the platform monopoly is certainly exacerbating and accelerating it.8
Although a post-newspaper future is becoming a distinct possibility, these struggling institutions still provide most of the original reporting for the entire news media system. A healthy fourth estate is needed now more than ever. It’s tragically ironic that Facebook and Google are starving the very institutions they expect to help fact-check against misinformation.
Historical precedent and mainstream economics justify aggressive regulation,9 especially in dealing with “natural monopolies.” This assumes that specific industries, especially networks such as communication systems, tend toward one large centralized entity. Thus, it’s socially optimal for one firm to invest in and maintain these services. Instead of breaking up such firms, regulatory incentives and penalties can prevent them from exploiting their market power.
Similar to that of a public utility, such firms often offer core services or infrastructures—like electricity, transportation systems, and water. Because they’re expensive to maintain but essential for the public good, many societies shield these services from unmitigated market forces. Regardless of how we categorize it, Facebook is a core digital infrastructure upon which society has granted a special status with enormous privileges.
Historically, the American government has deployed various laws and policies to contain monopoly power. But Facebook has managed to escape this arrangement. It isn’t under close government regulation or oversight. Nor is it expected to provide deliverables in return for being a state-sanctioned monopoly.
A counterexample involves AT&T (also called the Bell System), whose phone network attained a similarly dominant position in the early twentieth century. To forestall government regulation (including a threatened government takeover of its network), AT&T agreed to exit from a related market (telegraphy), interconnect with most non-AT&T systems, invest heavily in research and development (Bell Labs), maintain reasonable rates (especially for local calls), and help promote universal service.
It isn’t a perfect analogy—AT&T was a common carrier that controlled the actual telephone wires—but it’s instructive to consider what concessions a looming threat of antitrust litigation might bring (ultimately AT&T was broken up in the 1980s), including divestment of key components, radically changing business practices, and offsetting social costs / negative externalities. This approach to confronting monopoly power requires reframing key policy debates and broadening the political imagination of what’s possible within the regulatory realm.
Google, which has a dominant market position in search, and Facebook, which similarly dominates social media, are together greatly contributing to the evisceration of journalism.10 At the same time, they play an outsize role in proliferating misinformation. To help offset some of the damage they are causing, these firms should help fund local news, investigative journalism, policy reporting, and the kinds of coverage that doesn’t always yield clicks, but democracy requires. Thus far, Google and Facebook have offered only what amounts to public relations initiatives.
Google has pledged $300 million over three years toward journalism-related measures for its News Initiative, but this is insufficient (on a three-year average, it represents less than 1 percent of its 2017 profits). It also doesn’t directly fund the kinds of journalism the market fails to support. For its part, Facebook has launched a $3 million journalism “accelerator” (about 0.007 percent of 2017 revenues) to help ten to fifteen news organizations build their digital subscriptions using Facebook’s platform.11 These efforts are woefully insufficient. Current losses demand direct support for the journalism that Google and Facebook are actively defunding.
These two seemingly unrelated problems—unaccountable monopoly power and the loss of public service journalism—could be addressed through one policy intervention that redistributes revenue as part of a new regulatory approach to digital monopolies. Facebook (and also Google, which owns YouTube) should help fund the very industry that it simultaneously profits from and eviscerates. These firms should pay a “public service tax.”
A nominal tax of 1 percent on Facebook’s and Google’s earnings would generate tremendous funds for a journalism trust fund. Based on their 2017 net income, Facebook would yield $159.34 million and Alphabet, which is the parent company of Google, would yield $126.62 million. Together, 1 percent of Alphabet’s and Facebook’s 2017 net income is $285.96 million, which would go far toward seeding an endowment for independent journalism, especially if combined with other philanthropic contributions that accumulate over time.
Shielded from powerful interests, this public media trust should be publicly operated, remain autonomous from government, and able to receive charitable contributions from other entities such as foundations. However, all donations must be severed from any institutional or personal attachments to ensure independence from any single funder or government entity. A well-funded national—and, ultimately, international—journalism service could help guarantee universal access to quality news.
Facebook could certainly afford such an expenditure since it currently pays preciously little in taxes, which is being increasingly scrutinized.12 The European Commission reportedly wants a new tax of between 1 and 5 percent on digital companies’ revenues, including Google, Facebook, and Amazon. The idea of a public media tax is gaining traction abroad as well as in the United States.13
In Great Britain, the Media Reform Coalition and the National Union of Journalists have proposed taxing digital intermediaries specifically for public service journalism. In 2016, they tried to amend the Digital Economy Act to levy a 1 percent tax on such firms to fund nonprofit reporting. They were unsuccessful, but nonetheless policy makers increasingly are seeing connections between digital monopolies’ accumulation of wealth, the continuing degradation of journalism, and the rise of misinformation.
While some American and British proposals consider whether commercial news publishers receive a fair share of advertisement revenue from search engines and social media platforms, funding specifically for public media would decommercialize news and help ensure its integrity—and restore public trust.
Increasingly, governments are concluding that nonmarket support is journalism’s last, best hope. The Canadian government has pledged $50 million (U.S.$39 million) to local journalism, and others are considering similar options. But taxing digital monopolies and subsidizing journalism requires reframing key policy debates, especially in the United States.
Over the past year, Facebook has been charged with mishandling users’ data, abusing market power, and proliferating misinformation. Such negative externalities to society as Facebook extracts profound wealth across the globe should necessitate greater social responsibilities as a partial payback for Facebook’s many benefits. It’s time for a new social contract.
Financial support for public service journalism is just one piece of this contract, which could emerge from tackling these digital behemoths. But first we must broaden the discursive boundaries for what’s possible in terms of regulating digital monopolies. Beyond historicizing this problem to consider what policy interventions have been deployed in the past, it’s always a worthwhile exercise to consider other democratic nations’ reform efforts.
For example, the Europeans are trying to compensate for policy failures that allowed Facebook to set terms to its own advantage. Going beyond already-existing fines and proposed taxes, the European Union (EU) is currently implementing its General Data Protection Regulation (GDPR). The GDPR ensures that internet users in the twenty-eight EU countries understand and consent to the data collected about them regardless of where it’s stored and processed. This will affect companies based outside of Europe, especially Facebook and Google. The GDPR also guarantees a “right to be forgotten” that allows EU citizens to permanently remove online personal data and “data portability” that allows users to download their data and move it elsewhere.
Some may argue that since we receive social media services for free, we should resign ourselves to the bargain to which we agreed. But we actually pay dearly by providing content, data, and our attention. However, many users are simply ill informed about the true nature if this exchange. As the old saw goes, “If you’re getting something for free, most likely you are the product.” But while it’s tempting to simply quit Facebook and delete one’s account, such an individualistic, consumer-based reaction doesn’t encourage institutional change. Many groups of people around the world depend on Facebook for basic communications. Given its tremendous network effects (the network’s increasing size makes it more indispensable), it’s unreasonable to expect a mass exit from Facebook—more likely its expansion will continue. If we’re serious about systemic reform and reining in corporate power, we must commit to collective action and policy intervention.
Reining in Facebook will most likely require a well-equipped toolbox of regulatory instruments beyond safeguarding users’ privacy. These may include a wide-ranging set of interventions, among them antitrust measures like divesting specific components such as WhatsApp, Messenger, and Instagram; banning political advertising from dark money groups and foreign governments; reforming section 230 of the Communications Decency Act, which shields websites from legal liability; implementing radical transparency of algorithms and data collection; and promoting data portability and interoperability.
Facebook’s power doesn’t stem from magical technology or the market’s genius. Rather, governance over communication infrastructures is a political decision that all societies must face. By dismantling antitrust laws, we’ve permitted Facebook to abuse its power. Too many were seduced by Silicon Valley’s “move fast and break things” ethos. Too many stood silent when told that the internet was beyond the realm of regulation, that it was inherently and inevitably democratic, and that benevolent corporations were the best arbiters of this vital communication system. Policy decisions and indecisions have consequences, and we now reap what was sowed. But it isn’t too late to fix things.
Facebook’s technology isn’t inviolable. Algorithms are human-made things—as demonstrated when Facebook adjusted its algorithms to privilege friends’ and family’s posts over those from news publishers. Nor is Facebook some kind of Frankenstein monster that is beyond social control. Humans can and must intervene. With its massive profits, Facebook should commit money to journalism, but also hire legions of human screeners and—dare we say it—editors.
Ultimately, however, this problem isn’t simply Facebook’s to solve and self-regulation is insufficient. Democratic societies must decide what Facebook’s social responsibilities should look like and how they should be enforced. Public governance from international grassroots groups and watchdog institutions made up of independent experts should determine these measures and help monitor Facebook’s actions, pressuring it to be more transparent and accountable. This bottom-up discussion must be held publicly and internationally, with the participation of diverse constituencies. At the very least, an independent press council should help monitor and audit Facebook’s actions.
Facebook (and Amazon, Google, and Apple) simply has too much power over the world’s media and politics. This power must be checked. The American political imaginary is too often limited to individual freedoms and consumer rights. But we can transcend this impoverished vision to draw from social democratic traditions—a paradigm that sees news and information as public goods that shouldn’t be left solely to the corrosive commercialism of unregulated monopolies.14
A new social contract for digital media must assert public control over communication systems, and provide funding for the public infrastructure that democracy requires, especially journalism that can focus on local issues and hold concentrated power (like Facebook) to account. Any new arrangement should protect content creators and individual users (i.e., those who actually produce the labor upon which Facebook profits). Most importantly, this new contract must privilege society’s democratic needs over Facebook’s sole objective of profit maximization. Doing so is a necessary step toward restructuring our global media system and preventing unaccountable information monopolies from ever arising again.
1. On the “misinformation society,” see Victor Pickard, “Media Failures in the Age of Trump,” Political Economy of Communication 4, no. 2 (2017): 118–122. Sections of this chapter draw from Victor Pickard, “Break Facebook’s Power and Renew Journalism,” The Nation 306, no. 15 (2018): 22–24.
2. On the election’s coverage, see Pickard, “Media Failures in the Age of Trump”; Thomas E. Patterson, “Harvard Study: Policy Issues Nearly Absent in Presidential Campaign Coverage,” The Conversation, September 20, 2016, https://theconversation.com/harvard-study-policy-issues-nearly-absent-in-presidential-campaign-coverage-65731. On Facebook’s threat to democracy, see Victor Pickard, “The Big Picture: Misinformation Society,” Public Books, November 28, 2017, http://www.publicbooks.org/the-big-picture-misinformation-society/.
3. See Craig Silverman, “This Analysis Shows How Viral Fake Election News Stories Outperformed Real News on Facebook,” BuzzFeed News, November, 16, 2016, https://www.buzzfeed.com/craigsilverman/viral-fake-election-news-outperformed-real-news-on-facebook.
4. Mike Shields, “CMO Today: Google and Facebook Drive 2017 Digital Ad Surge, Wall Street Journal, March 14, 2017, https://www.wsj.com/articles/cmo-today-google-and-facebook-drive-2017-digital-ad-surge-1489491871.
5. Tiernan Ray, “Google, Facebook Approaching ‘Saturation’ of Ad Budgets, Says Pivotal,” Barron’s, December 20, 2017, http://www.barrons.com/articles/google-facebook-approaching-saturation-of-ad-budgets-says-pivotal-1513804634.
6. Mathew Ingram, “The Media Today: Facebook Tosses a Dime at Local Journalism,” Columbia Journalism Review, February 28, 2018, https://www.cjr.org/the_media_today/facebook-local-news-funding.php.
7. Victor Pickard, America’s Battle for Media Democracy: The Triumph of Corporate Libertarianism and the Future of Media Reform (New York: Cambridge University Press, 2015).
8. For a historical analysis of this market failure and its implications for the future of journalism, see Victor Pickard, Democracy without Journalism: The Structural Roots of the Misinformation Society (New York: Oxford University Press, forthcoming).
9. Ibid.
10. Sally Hubbard, “Fake News Is a Real Antitrust Problem,” Competition Policy International, December 19, 2017, https://
11. Ingram, “The Media Today.”
12. Scott Galloway, “Silicon Valley’s Tax-Avoiding, Job-Killing, Soul-Sucking Machine, Esquire, February 8, 2018, https://www.esquire.com/news-politics/a15895746/bust-big-tech-silicon-valley/.
13. For earlier articulations of this idea, see Victor Pickard, “Yellow Journalism, Orange President,” Jacobin, November 25, 2016, https://www.jacobinmag.com/2016/11/media-advertising-news-radio-trump-tv/; Emily Bell, “How Mark Zuckerberg Could Really Fix Journalism,” Columbia Journalism Review, February 21, 2017, https://www.cjr.org/tow_center/mark-zuckerberg-facebook-fix-journalism.php.
14. For an elaboration of this social democratic logic, see Victor Pickard, “A Social Democratic Vision of Media: Toward a Radical Pre-history of Public Broadcasting,” Journal of Radio and Audio Media 24, no. 2 (2017): 200–212.