FML Blog

Google's record-breaking antitrust fine, Facebook censorship, and getting people to pay for news

Friday, June 30, 2017      Future Media Lab.       0

Karin Fleming

(Left) Karin Fleming, Communications Manager at EMMA/the Future Media Lab.

 

In this bi-weekly news round-up, Karin Fleming shares the news that caught her eye over the last two weeks. The news round-up is a way for the Future Media Lab. team and members of the Future Media Lab. network to share articles about innovations and developments in the media sector, including references to relevant media policy debates. To get this round-up sent directly to your inbox, subscribe to our newsletter!

 

Google hit with historic antitrust fine.

On Tuesday, 27 July the European Commissioner for Competition Margrethe Vestager announced that the EU competition authorities concluded Google’s practice of illegally favouring its own services in search results breached EU antitrust rules, undermining competition in Europe. Therefore, the EU imposed a record fine of €2.42 billion and requested that Google stop the abuse within a period of 90 days or face penalty payments of up to 5% the average worldwide turnover of Alphabet, Google’s parent company.

 

This ends the nearly decade-long inquiry into the company and provoked a range of reactions, including accusations of EU-protectionism and claims that it will hinder innovation. Thomas Höppner, a partner with Hausfeld law firm in Germany, which represents several complainants in the case, argued that it will instead boost innovation and investment, since it makes it illegal for Google to “simply copy any promising idea and promote its own services ahead of the inventors.”

 

Google fine: let’s talk numbers.

While the €2.42 billion dollar fine is the biggest antitrust settlement in history - it’s more than twice the €1.06 fine against Intel in 2009 and nearly 5 times what Microsoft was fined in 2004 – it works out to be just 0.42 percent of Alphabet’s total value, which is more than $639 billion.

 

At the same time, Google will make $80.8 billion from ads this year, which works out to be $11.54 for every single person on Earth. It’s also as much as the combined total ad spend going to every print magazine and newspaper in the world. In fact, together with Facebook – which brings in $36.6 billion – the two companies eat up 83 percent of all new ad dollars worldwide. So the reality is that a few billion dollars will not slow Google down, which also explains the two other recent Google announcements: 1) that they will no longer mine the contents of Gmail messages for ad personalization and 2) they will create a video ad blocker to be built into their browser (Chrome). While these two actions could cause them to forfeit what seems like significant chunks of money, in the Google ad universe it’s nearly negligible percentages. But the moves also pose important questions about how much power Google really yields and how they plan to use it to further their position in the ad market.

 

 

Key findings from Reuters Institute’s Digital News Report.

Reuters Institute for the Study of Journalism recently published the 2017 edition of their Digital News Report, which comes as media around the world struggle to reign in cries of fake news and build trust with their audiences. Nic Newman, the lead author of the report, shared some of the key findings on the Future Media Lab. blog. In the report, just 24% of respondents say that social media does a good job of separating fact from fiction, and trust in mainstream news sources varies significantly between countries, but largely is met with skepticism.

 

These trends have impacts on whether people are willing to pay for news, and the report also found a strong correlation between those who pay for other online services – such as Netflix or Spotify – and those who are willing to pay for news. Much of this growth also seems to be coming from people under-35, bursting the myth that millennials aren’t willing to pay for digital content.

 

How do social networks influence users’ news diets?

It’s a question that has come up often, particularly in the context of the “filter bubble effect” and fear that social media networks are leading to a decrease in the consumption of diverse news sources as opposed to an increase. Using data from the Digital News Report, two of the report’s authors, Richard Fletcher and Rasmus Kleis Nielson, dove into this topic in a recent article for Nieman Lab. According to their analysis, social media use is “clearly associated with incidental exposure to additional sources of news that people otherwise wouldn’t use – and with more politically diverse news diets.” Therefore, their conclusion is that social media use is consistent with more and more diverse news diets – at least until the next algorithm update.

 

“Ask people to pay. They will pay.”

Jeff Bezos, founder of Amazon and owner of the Washington Post, spoke at the Future of News event in Turin earlier this month, sharing lessons he learned in the four years he reworked the Post’s strategy to turn it into a profit-generating paper. This included having a customer-centric approach – as opposed to ad-centric, staying away from charity- or patron-based models, and producing quality content that, if you ask people to pay for, they will pay. A collection of videos from the conference can be found here. Digiday has also recently published a cheat sheet that examines the state of paid digital news consumption in the U.S. and includes some interesting insights, particularly about the business models, statistics on the ad market, and the shift in focus from advertising to paid content.

 

 

Facebook: the most far-reaching and least accountable censorship operation in history.

Journalists at ProPublica recently dove deep into the algorithms that Facebook’s censors use to differentiate between hate speech and legitimate political expression and the results are troubling. The investigative article, which was titled “Facebook’s Secret Censorship Rules Protect White Men from Hate Speech But Not Black Children”, used internal documents to try to make sense of the rationale behind some seemingly inconsistent decisions.

 

 

“Will make you…” are gimmicky headlines here to stay?

A new study of Facebook headlines by BuzzSumo, a content-analytics firm, indicates that some of the cliché, gimmicky headlines found on Facebook have a strong staying power. This is particular true of trigrams, popular three word phrases, such as “will make you”; “this is why”; and “can we guess.” The commonality between the phrases seem to rely on the direct appeal to users’ emotions and the promise to impact the reader in a specific way. The study also found that certain formats, such as listicles, also produce high levels of engagement.

 

 

Exciting new projects from EJC.

The European Journalism Centre announced four new projects this week: 1) new round of grants for journalism; 2) the launch of medialandscapes.org, a website that collects expert analyses of the state of media; 3) the creation – together with Facebook – of the Facebook Safety for Journalists project; and 4) the most recent edition of the Data Journalism Handbook. They’re also planning three more editions of their News Impact Summits after the summer in Budapest, Manchester and Brussels. Something to keep an eye on!







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