Roy Jeans: why the Cairncross Review into news media is a failure of intent and resolution

Christophe Guilluy’s recently published English-language version of “Twilight of the Elites” focuses on nascent tensions between France’s metropolitan ruling class and the disenfranchised people who live in the countryside outside of France’s “citadels” of power and economic influence. Originally published in French just over two years ago, his book anticipates – perhaps encourages – the rise of the gilet jaunes who have now been demonstrating across France for over three months.

Guilluy’s key argument is that about 15 cities – including Paris of course but also including Bordeaux for example – have become utterly disconnected from the general population of France. These “citadels” have embraced globalisation (and its narrowly-focused financial rewards) whilst ignoring the effects that this has had on the circa 60 per cent of the French population who live outside of them.

These tensions are clearly not limited to France. The Brexit vote and the election of President Trump can both be interpreted as democratic equivalents of the gilet jaunes protests. While the metropolitan elites of the UK and the USA still digest these votes, they have also started to concentrate on the news and news channels that underpinned them. In the UK, the generation and dissemination of news is the subject of the recently published Cairncross Review.

The Cairncross Review was commissioned by the UK government with a remit to look at two key areas. The first is an investigation of the marketplace as it relates to protecting news gathering and ensuring that the market is efficient (my italics) and to defend their democratically significant outlets (ditto). Secondly, the review was asked to investigate how society continues to support activities of, and the reporting of, public bodies.

The Cairncross Review fails on many fronts, but its key failing is that despite its relatively broad remit, it ignores any meaningful response to the ever-growing advertising duopoly of Facebook and Google (even though they are discussed at some length in the report.) Cairncross manages to ignore both the increasing power of the Silicon Valley behemoths and the needs of those many consumers who live in the UK’s equivalent of the non-citadels.

One cannot imagine Dame Frances Cairncross in a yellow jacket. She is a much-garlanded academic with impeccable intellectual credentials, having worked as a journalist for both the Guardian and the Economist. In fact, she is one of the metropolitan elite’s elite. Reading the review, one can’t help but think of Guilluy’s description of London as “the quintessential … citadel city.” The real spine of her review is the – unwritten – but relevant question: How do we as a society react to the overwhelming revenue-hoarding growth of Facebook and Google, particularly as it relates to the gathering of news?

To be fair the broad problems facing news dissemination are clearly set out, although some assertions seem peculiar – for example, the statement that most regional and national publishers are in rude health, making operating margins of ten per cent plus. Yet elsewhere she mentions that the number of journalists in the UK has declined from 23,000 in 2007 to little over 17,000 now. Perhaps these facts might be connected? She explains how local classified markets have been all but destroyed by Google Search. She also points out – and suggests that this is a negative – that individuals can tailor their news consumption to reflect their own interests. There is an acknowledgement that the online media buying/selling process is “opaque.”

The solutions to these problems are anodyne, constrained by her own academic background. These include: the setting up of a quango called the “Institute of Public Interest News” to channel public and private funding to “those parts of the industry it deemed most worthy of support”; asking the Competition and Markets Authority (CMA) to further investigate “the positions of various players, their roles, costs and profitability. The CMA will then be able to identify how efficiently the online market is working.” There is a suggestion to zero-rate VAT on online newspapers and magazines, and the creation of an ill-defined Innovation Fund.

It is unfortunate for the Cairncross Review that days after its publication the final report of the Digital, Culture, Media and Sport committee investigation into Facebook appeared. Rather than waiting for the CMA to have a gentle look at the structure of the online market and its effects, the DCMS report set out a damning charge-sheet, which included: describing Facebook as a “digital gangster;” detailing how Mark Zuckerberg has refused three times to appear before their committee; explaining how Facebook has deliberately broken privacy and competition law; how Facebook has chosen profit over data security; and how it has failed to act quickly enough to deal with a whole range of inappropriate content relating to terrorism, hate crime and mental health issues.

I could add to this list egregious tax avoidance; posing as a “conduit” of news rather than accepting that it is a publisher; demonstrating ongoing corporate arrogance when dealing with sovereign and democratically-elected governments; and the systematic destruction (along with Google) of the local and regional newspaper industry’s core revenue streams. Of course, “creative destruction” of slow-moving and laggard companies has always been a by-product of capitalism, but we are at a moment where we are post this. The regional newspaper industry would be the first to admit that it over-extended itself in the early 2000’s, leaving it with a legacy of debt and pension fund holes, but it is now suffering from simple unfair competition.

The DCMS accusations reveal the Cairncross review as a toothless response to an accelerating and insidious threat to our democracy. Instead, we should be doing some, or all, of the following:

*Change the regulatory framework so that Facebook and Google are treated as publishers, with attendant legal obligations and penalties.

*A charging model, enforced by law, which requires Facebook and Google to pay market rates for their content to the originators of the content.

*Extend GDPR’s remit to increase fines to 50 per cent of global turnover – Germany has led the way here in potentially imposing new fines.

*Remove toleration of global tax avoidance, with a significant digital turnover tax levied on turnovers over, for example, £500m.

*Break the companies up – along the lines of AT&T’s dismembering nearly 40 years ago into eight “Baby Bells.” This can be done by country, by region, or by some sort of content definition

There is one other solution. Whilst not suggesting that we should be following China or Russia’s lead here, we should consider shutting Facebook out of our country behind a firewall. Perhaps for days at a time, or permanently. Facebook threatens our collective well-being, our local and regional media industry, and ultimately our sovereignty.

Facebook needs the firm smack of government. A new quango here and a market review there isn’t good enough – this is the response of a citadel-dweller with no sense of urgency. If Facebook won’t be brought to heel it needs to be destroyed before it destroys us.

Roy Jeans is commercial director of hyper-local media company Pintarget and a former senior executive at Zenith Media and Rapport.

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