The only way to control tech giants like Facebook may be for governments to gang up

It used to be that the most influential media companies in Canada had to keep at least one eye on the Canadian public interest whether they wanted to or not.

Broadcasters are regulated through the Broadcasting Act, and while newspapers face less oversight, a restriction on foreign ownership means there is always the potential that a determined Canadian government could do something, such as change tax rules, that could nudge them into line.

But now, as internet mega companies such as Facebook and Google have taken over much of the ad revenue and eyeballs that mainstream media used to enjoy, there have been only nascent efforts to make them answer to the public interest.

This week, as Australia consideredlaws to make them pay for news, the new communications giants have demonstrated they can thumb their noses at mere national governments.

But with a growing sense around the world, including in Canada, that Facebook, Google and the likehave grown too big and powerful, there are those who say an international effort is necessary to take on the titans of tech.

Facebook's warning shot to Australia

So far, Australia's tactic doesn't seem to be workingasplanned although Canada is now vowing to follow its lead and make Facebook pay for news content.

Following a proposal by Australia to force the technology giants to pay for Australian news stories, stories that the tech companies distribute and use to earn their own profits, Facebook has fired a warning shot across the bow of the country's Parliament.

"They've created chaos, and it's quite deliberate," Daniel Angus, a professor in digital communication at Queensland University of Technology told Bloomberg news.

Facebook not only offered a flat nobut effectively ejected Australian news stories from its site both down under and worldwide, preventing users from viewing and sharingthem.

WATCH | Australia's attempt to get Facebook to pay for content backfires:

Facebook wipes news from Australian feeds in battle over paying for content

4 years ago

Duration 2:02

Facebook feeds in Australia were stripped of news posts during a fight over government plans to make technology giants pay for sharing news content and there are concerns something similar could happen in Canada.

The company even removed access to things such as government health notices and weather information, something itlater said was a mistake.

Google, however,has entered negotiations with News Corp in a way that signalled a possible accommodation with the new rules. News Corp ownerRupert Murdoch, a conservative, has been one of the titans' biggest critics, in 2019 joining an unlikely pact with U.S. Senator Elizabeth Warren, a progressive Democrat,to weaken Google's power.

Thursday, Canada's Heritage Minister Steven Guilbeaultsaid Canada may adopt the Australian modelor follow the lead of other countries trying to get tech giants to pay for content.

Calls for regulation

Besides the complaint that companies such as Facebook and Google are earning their profits at the expense of the struggling news industry that is so crucial to the democratic system, there have been many other reasons cited by those demanding greater regulation.

In the U.S., the calls grew louder after Russian interference in the 2016 election of Donald Trump, along with data mining and privacy scandals.

Many object to the uncontrolled misinformation campaigns tech giants seem unable to manage and widely shared,increasinglyharmful conspiracy theories including false narratives about the 2020 U.S. election.

Others complain they are simply too big, able to avoid taxes and acting as monopolies in areas such as search and personal communication.

So far, attempts by large international organizations to convince the tech giants to play nice have been weak or ineffective.

There are international bodies, including the United Nations Global Compact, to set standards and encourage "business as a force for good," but participation is voluntary. Christina Koulias, the organization's senior manager in charge of global governance, said in an email that Facebook is not a participant.

The Organization for Economic Cooperation and Development has a policy on corporate social responsibility. But an ambitious plan by the OECD to co-ordinate global tax policy that I wrote about back in 2014 has yet to bear fruit for a series of reasons, most recently, say those in the know, because ofa brush-off from the Trump administration.

In fact, according to Canada's own Centre for International Governance Innovation (CIGI), based in Waterloo, Ont., the faceoff between Facebook and Australia illustrates a gap that needs to be filled. And they have a proposal for how to do it.

Tech giants make the rules and the profits

In the case of Facebook,the company claims the Australian rules don't fit its business modelsince it would be forcedto pay up when third parties post newspaper articles.

"The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content," Facebook regional managing director William Easton told the Associated Press.

But CIGI'smanaging director of digital economy, Bob Fay, said the problem is that corporations know they can set rules to maximize profits without thinking about the interests of other players, including governments.

"We have these very large, very powerful, global companies that set their own rules, based on what's best for their own business model," said Fay.

"We've seen very recent examples of where these companies, based on their business models, have created substantive harm."

As well as the new Australian conflict that interfered with people's health and well-being, Fayspecificallycites the use of social media to incite violent, anti-government action in the U.S. culminating in the Jan. 6 attack on the U.S. Congress.

The digital giants are influential in individual countries such as Canada and Australia, but in many places, they have virtually no physical presence. That makes them hard to influence back.

And while international treaties on standardization or international trade agreements exist, the phenomenon of internet tech giants that cross national boundaries is so new and changing so rapidly, that national governments simply were not prepared.

"There really is no global forum [where] countries come together on these types of issues," said Fay.

That's why CIGI has proposed something it calls the Digital Stability Board, an international bodywith decision making powersto constantly monitor and regulate global digital platforms in real time as they transform.

The name and model come from the Financial Stability Board, which has a mandate from the G20 to "promotethe reform of international financial regulation and supervision," Fay writes.

The CIGI proposal is not an instant solution for the current problem in Australia. Constituting the body and getting everyone to participate will take time.

But now that Trump, who disliked international co-operation, has been replaced by President Joe Biden, and now that the world has seen how willing Facebook has been to use its power, Fay hopes governments will be spurred into action.

"There are enormous benefits that come from these platforms, but the harms have become increasingly obvious, and they touch every aspect of our lives," said Fay. "Governments need to take action."

Follow Don Pittis on Twitter @don_pittis

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