Goodbye Google+, but what happens when online communities close down?



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Google+ is the latest online community to close.
Shutterstock/rvlsoft

Stan Karanasios, RMIT University

This week saw the closure of Google+, an attempt by the online giant to create a social media community to rival Facebook.

If the Australian usage of Google+ is anything to go by – just 45,000 users in March compared to Facebook’s 15 million – it never really caught on.

Google+ is no longer available to users.
Google+/Screengrab

But the Google+ shutdown follows a string of organisations that have disabled or restricted community features such as reviews, user comments and message boards (forums).




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So are we witnessing the decline of online communities and user comments?

Turning off online communities and user generated content

One of the most well-known message boards – which existed on the popular movie website IMDb since 2001 – was shut down by owner Amazon in 2017 with just two weeks’ notice for its users.

This is not only confined to online communities but mirrors a trend among organisations to restrict or turn off their user-generated content. Last year the subscription video-on-demand website Netflix said it no longer allowed users to write reviews. It subsequently deleted all existing user-generated reviews.

Other popular websites have disabled their comments sections, including National Public Radio (NPR), The Atlantic, Popular Science and Reuters.

Why the closures?

Organisations have a range of motivations for taking such actions, ranging from low uptake, running costs, the challenges of managing moderation, as well as the problem around divisive comments, conflicts and lack of community cohesion.

In the case of Google+, low usage alongside data breaches appear to have sped up its decision.

NPR explained its motivation to remove user comments by highlighting how in one month its website NPR.org attracted 33 million unique users and 491,000 comments. But those comments came from just 19,400 commenters; the number of commenters who posted in consecutive months was a fraction of that.

This led NPR’s managing editor for digital news, Scott Montgomery, to say:

We’ve reached the point where we’ve realized that there are other, better ways to achieve the same kind of community discussion around the issues we raise in our journalism.

He said audiences had also moved to engage with NPR more on Facebook and Twitter.

Likewise, The Atlantic explained that its comments sections had become “unhelpful, even destructive, conversations” and was exploring new ways to give users a voice.

In the case of IMDB closing its message boards in 2017, the reason given was:

[…] we have concluded that IMDb’s message boards are no longer providing a positive, useful experience for the vast majority of our more than 250 million monthly users worldwide.

The organisation also nudged users towards other forms of social media, such as its Facebook page and Twitter account @IMDB, as the “(…) primary place they (users) choose to post comments and communicate with IMDb’s editors and one another”.

User backlash

Unsurprisingly, such actions often lead to confusion, criticism and disengagement by user communities, and in some cases petitions to have the features reinstated (such as this one for Google+) and boycotts of the organisations.

But most organisations take these aspects into their decision-making.

The petition to save IMDB’s message boards.
Change.org/Screengrab

For fans of such community features these trends point to some harsh realities. Even though communities may self-organise and thrive, and users are co-creators of value and content, the functionality and governance are typically beyond their control.

Community members are at the mercy of hosting organisations, some profit-driven, which may have conflicting motivations to those of the users. It’s those organisations that hold the power to change or shut down what can be considered by some to be critical sources of knowledge, engagement and community building.

In the aftermath of shutdowns, my research shows that communities that existed on an organisation’s message boards in particular may struggle to reform.

This can be due to a number of factors, such as high switching costs, and communities can become fragmented because of the range of other options (Reddit, Facebook and other message boards).

So it’s difficult for users to preserve and maintain their communities once their original home is disabled. In the case of Google+, even its Mass Migration Group – which aims to help people, organisations and groups find “new online homes” – may not be enough to hold its online communities together.

The trend towards the closure of online communities by organisations might represent a means to reduce their costs in light of declining usage and the availability of other online options.

It’s also a move away from dealing with the reputational issues related to their use and controlling the conversation that takes place within their user bases. Trolling, conflicts and divisive comments are common in online communities and user comments spaces.

Lost community knowledge

But within online groups there often exists social and network capital, as well as the stock of valuable knowledge that such community features create.




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Often these communities are made of communities of practice (people with a shared passion or concern) on topics ranging from movie theories to parenting.

They are go-to sources for users where meaningful interactions take place and bonds are created. User comments also allow people to engage with important events and debates, and can be cathartic.

Closing these spaces risks not only a loss of user community bases, but also a loss of this valuable community knowledge on a range of issues.The Conversation

Stan Karanasios, Senior Research Fellow, RMIT University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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A tale of two media reports: one poses challenges for digital media; the other gives ABC and SBS a clean bill of health



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The competitive neutrality report has given the ABC, and SBS, a clean bill of health.
Shutterstock

Denis Muller, University of Melbourne

Two reports out this week – one into the operations of Facebook and Google, the other into the competitive neutrality of the ABC and SBS – present the federal government with significant policy and political challenges.

The first is by far the more important of the two.

It is the interim report by the Australian Competition and Consumer Commission of its Digital Platforms Inquiry, and in a set of 11 preliminary recommendations it proposes far-reaching changes to media regulation.

Of particular interest are its preliminary recommendations for sustaining journalism and news content.

These are based on the premise that there is a symbiotic relationship between news organisations and the big digital platforms. Put simply, the news organisations depend heavily on these platforms to get their news out to their audiences.

The problem, the ACCC says, is that the way news stories are ranked and displayed on the platforms is opaque. All we know – or think we know – is that these decisions are made by algorithms.




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The ACCC says this lack of transparency causes concerns that the algorithms and other policies of the platform giants may be operating in a way that affects the production of news and journalistic content.

To respond to this concern, the preliminary recommendation is for a new regulatory authority to be established. It would have the power to peer into these algorithms and monitor, investigate and report on how content – including news content – is ranked and displayed.

The purpose would be to identify the effects of the algorithms and other policies on the production of news and journalistic content.

It would also allow the authority to assess the impact on the incentives for news and journalistic content creation, particularly where news organisations have invested a lot of time and money in producing original content.

In this way, the ACCC is clearly trying to protect and promote the production of public-interest journalism, which is expensive but vital to democratic life. It is how the powerful are held to account, how wrongdoing is uncovered, and how the public finds out what is going on inside forums such as the courts and local councils.

So far, the big news media organisations have concentrated on these aspects of the ACCC interim report and have expressed support for them.

However, there are two other aspects of the report on which their response has been muted.

The first of these is the preliminary recommendation that proposes a media regulatory framework that would cover all media content, including news content, on all systems of distribution – print, broadcast and online.

The ACCC recommends that the government commission a separate independent review to design such a framework. The framework would establish underlying principles of accountability, set boundaries around what should be regulated and how, set rules for classifying different types of content, and devise appropriate enforcement mechanisms.

Much of this work has already been attempted by earlier federal government inquiries – the Finkelstein inquiry and the Convergence Review – both of which produced reports for the Gillard Labor government in 2012.

Their proposals for an overarching regulatory regime for all types of media generated a hysterical backlash from the commercial media companies, who accused the authors of acting like Stalin, Mao, or the Kim clan in North Korea.

So if the government adopts this recommendation from the ACCC, the people doing the design work can expect some heavy flak from big commercial media.

The other aspect of the ACCC report that is likely to provoke a backlash from the media is a preliminary recommendation concerning personal privacy.

Here the ACCC proposes that the government adopt a 2014 recommendation of the Australian Law Reform Commission that people be given the right to sue for serious invasions of privacy.

The media have been on notice over privacy invasion for many years. As far back as 2001, the High Court developed a test of privacy in a case involving the ABC and an abattoir company called Lenah Game Meats.

Now, given the impact on privacy of Facebook and Google, the ACCC has come to the view that the time has arrived to revisit this issue.

The ACCC’s interim report is one of the most consequential documents affecting media policy in Australia for many decades.

The same cannot be said of the other media-related report published this week: that of the inquiry into the competitive neutrality of the public-sector broadcasters, the ABC and SBS.

This inquiry was established in May this year to make good on a promise made by Malcolm Turnbull to Pauline Hanson in 2017.




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He needed One Nation’s support for the government’s changes to media ownership laws, without which they would not have passed the Senate.

Hanson was not promised any particular focus for the inquiry, so the government dressed it up in the dull raiment of competitive neutrality.

While it had the potential to do real mischief – in particular to the ABC – the report actually gives both public broadcasters a clean bill of health.

There are a couple of minor caveats concerning transparency about how they approach the issue of fair competition, but overall the inquiry finds that the ABC and SBS are operating properly within their charters. Therefore, by definition, they are acting in the public interest.

This has caused pursed lips at News Corp which, along with the rest of the commercial media, took this opportunity to have a free kick at the national broadcasters. But in the present political climate, the issue is likely to vanish without trace.

While the government still has an efficiency review of the ABC to release, it also confronts a political timetable and a set of the opinion polls calculated to discourage it from opening up another row over the ABC.The Conversation

Denis Muller, Senior Research Fellow in the Centre for Advancing Journalism, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

ACCC wants to curb digital platform power – but enforcement is tricky


Katharine Kemp, UNSW

We need new laws to monitor and curb the power wielded by Google, Facebook and other powerful digital platforms, according to the Australian Competition and Consumer Commission (ACCC).

The Preliminary Report on the Digital Platforms Inquiry found major changes to privacy and consumer protection laws are needed, along with alterations to merger law, and a regulator to investigate the operation of the companies’ algorithms.

Getting the enforcement right will be key to the success of these proposed changes.




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Scrutinising accumulation of market power

The report says Google and Facebook each possess substantial power in markets such as online search and social media services in Australia.

It’s not against the law to possess substantial market power alone. But these companies would breach our November 2017 misuse of market power law if they engaged in any conduct with the effect, likely effect or purpose of substantially lessening competition – essentially, blocking rivalry in a market.

Moving forwards, the ACCC has indicated it will scrutinise the accumulation of market power by these platforms more proactively. Noting that “strategic acquisitions by both Google and Facebook have contributed to the market power they currently hold”, the ACCC says it intends to ask large digital platforms to provide advance notice of any planned acquisitions.

While such pre-notification of certain mergers is required in jurisdictions such as the US, it is not currently a requirement in other sectors under the Australian law.

At the moment the ACCC is just asking the platforms to do this voluntarily – but has indicated it may seek to make this a formal requirement if the platforms don’t cooperate with the request. It’s not currently clear how this would be enforced.

The ACCC has also recommended the standard for assessing mergers should be amended to expressly clarify the relevance of data acquired in the transaction as well as the removal of potential competitors.

The law doesn’t explicitly refer to potential competitors in addition to existing competitors at present, and some argue platforms are buying up nascent competitors before the competitive threat becomes apparent.




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A regulator to monitor algorithms

According to the ACCC, there is a “lack of transparency” in Google’s and Facebook’s arrangements concerning online advertising and content, which are largely governed by algorithms developed and owned by the companies. These algorithms – essentially a complex set of instructions in the software – determine what ads, search results and news we see, and in what order.

The problem is nobody outside these companies knows how they work or whether they’re producing results that are fair to online advertisers, content producers and consumers.

The report recommends a regulatory authority be given power to monitor, investigate and publish reports on the operation of these algorithms, among other things, to determine whether they are producing unfair or discriminatory results. This would only apply to companies that generate more than A$100 million per annum from digital advertising in Australia.




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These algorithms have come under scrutiny elsewhere. The European Commission has previously fined Google €2.42 billion for giving unfair preference to its own shopping comparison services in its search results, relative to rival comparison services, thereby contravening the EU law against abuse of dominance. This decision has been criticised though, for failing to provide Google with a clear way of complying with the law.

The important questions following the ACCC’s recommendation are:

  • what will the regulator do with the results of its investigations?
  • if it determines that the algorithm is producing discriminatory results, will it tell the platform what kind of results it should achieve instead, or will it require direct changes to the algorithm?

The ACCC has not recommended the regulator have the power to make such orders. It seems the most the regulator would do is introduce some “sunshine” to the impacts of these algorithms which are currently hidden from view, and potentially refer the matter to the ACCC for investigation if this was perceived to amount to a misuse of market power.

If a digital platform discriminates against competitive businesses that rely on its platform – say, app developers or comparison services – so that rivalry is stymied, this could be an important test case under our misuse of market power law. This law was amended in 2017 to address longstanding weaknesses but has not yet been tested in the courts.




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Privacy and fairness for consumers

The report recommends substantial changes to the Privacy Act and Australian Consumer Law to reduce the power imbalance between the platforms and consumers.

We know from research that most Australians don’t read online privacy policies; many say they don’t understand the privacy terms offered to them, or they feel they have no choice but to accept them. Two thirds say they want more say in how their personal information is used.

The solutions proposed by the ACCC include:

  • strengthening the consent required under our privacy law, requiring it to be express (it may currently be implied), opt-in, adequately informed, voluntary and specific
  • allowing consumers to require their personal data to be erased in certain circumstances
  • increasing penalties for breaches of the Privacy Act
  • introducing a statutory cause of action for serious invasion of privacy in Australia.



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This last recommendation was previously made by the Australian Law Reform Commission in 2014 and 2008, and would finally allow individuals in Australia to sue for harm suffered as a result of such an invasion.

If consent is to be voluntary and specific, companies should not be allowed to “bundle” consents for a number of uses and collections (both necessary and unnecessary) and require consumers to consent to all or none. These are important steps in addressing the unfairness of current data privacy practices.

Together these changes would bring Australia a little closer to the stronger data protection offered in the EU under the General Data Protection Regulation.

But the effectiveness of these changes would depend to a large extent on whether the government would also agree to improve funding and support for the federal privacy regulator, which has been criticised as passive and underfunded.

Another recommended change to consumer protection law would make it illegal to include unfair terms in consumer contracts and impose fines for such a contravention. Currently, for a first-time unfair contract terms “offender”, a court could only “draw a line” through the unfair term such that the company could not force the consumer to comply with it.

Making such terms illegal would increase incentives for companies drafting standard form contracts to make sure they do not include detrimental terms which create a significant imbalance between them and their customers, which are not reasonably necessary to protect their legitimate interests.




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The ACCC might also take action on these standard terms under our misleading and deceptive conduct laws. The Italian competition watchdog last week fined Facebook €10 million for conduct including misleading users about the extent of its data collection and practices.

The ACCC appears to be considering the possibility of even broader laws against “unfair” practices, which regulators like the US Federal Trade Commission have used against bad data practices.

Final report in June 2019

As well as 11 recommendations, the report mentions nine areas for “further analysis and assessment” which in itself reflects the complexity of the issues facing the ACCC.

The ACCC is seeking responses and feedback from stakeholders on the preliminary report, before creating a final report in June 2019.

Watch this space – or google it.




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The Conversation


Katharine Kemp, Lecturer, Faculty of Law, UNSW, and Co-Leader, ‘Data as a Source of Market Power’ Research Stream of The Allens Hub for Technology, Law and Innovation, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Digital platforms. Why the ACCC’s proposals for Google and Facebook matter big time


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The Competition and Consumer Commission is worried about the ability of the platforms we use to determine the news we read.
Shutterstock

Sacha Molitorisz, University of Technology Sydney and Derek Wilding, University of Technology Sydney

The Australian Competition and Consumer Commission has released the preliminary report of its Digital Platforms Inquiry, and Google and Facebook won’t be happy.

Rather than adopting a gently-gently approach, the ACCC has produced draft recommendations that are extensive and dramatic.

If implemented, they would significantly affect the way the digital platforms make their money, and help direct the content we consume.

What’s more, the inquiry is touted as a world first. Its findings will be closely monitored, and perhaps even adopted, by regulators internationally.

Who should care?

The digital platforms themselves should (and do) care.

Any new regulations designed to foster competition or protect individual privacy (both are among the ACCC’s recommendations) have the potential to harm their revenues.

They’ve a lot to lose. In 2017, nearly A$8 billion was spent on online advertising in Australia, and more than half went to Google and Facebook (p3).

News organisations whose output is disseminated by those platforms should (and do) care too.

As the ACCC notes, more than half of the traffic on Australian news websites comes via Google and Facebook (p8).




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Increasingly, news producers depend on social media and search engines to connect with consumers. Google is used for 95% of searches (98% on mobile devices).

The rise of Google, Facebook and other digital platforms has been accompanied by unprecedented pressures on traditional news organisations.

Most obviously, classified advertising revenue has been unbundled from newspapers.

In 2001, classified advertising revenue stood at A$2 billion. By 2016, it had fallen to A$200 million. The future of newspapers’ ability to produce news is under a cloud, and digital platforms help control the weather.

Of course, advertisers care too.

But the stakeholders with the most to gain or lose are us, Australian citizens.




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Our lives are mediated by Google, Facebook, Apple, Amazon, Twitter and others as never before. Google answers our search queries; Facebook hosts friends’ baby snaps; YouTube (owned by Google) distributes professional and user-generated videos; Instagram (owned by Facebook) hosts our holiday snaps.

As the ACCC notes, they have given us tremendous benefits, for minimal (apparent) cost.

And they’ve done it at lightning speed. Google arrived in 1998, Facebook in 2004 and Twitter in 2006. They are mediating what comes before our eyes in ways we don’t understand and (because they keep their algorithms secret) in ways we can’t understand.

What does the ACCC recommend?

The ACCC’s preliminary recommendations are far-reaching and bold.

First, it suggests an independent review to address the inadequacy of current media regulatory frameworks.

This would be a separate, independent inquiry to “design a regulatory framework that is able to effectively and consistently regulate the conduct of all entities which perform comparable functions in the production and delivery of content in Australia, including news and journalistic content, whether they are publishers, broadcasters, other media businesses, or digital platforms”.

This is a commendable and urgent proposal. Last year, cross-media ownership laws were repealed as anachronistic in a digital age. To protect media diversity and plurality, the government needs to revisit the issue of regulatory frameworks.




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Second, it proposes privacy safeguards. Privacy in Australia is dangerously under-protected. Digital platforms such as Google and Facebook generate revenue by knowing their users and targeting advertising with an accuracy unseen in human history.

As the ACCC puts it, “the current regulatory framework, including privacy laws, does not effectively deter certain data practices that exploit the information asymmetries and the bargaining power imbalances that exist between digital platforms and consumers.”

It makes a number of specific preliminary recommendations, including creating a right to erasure and the requirement of “express, opt-in consent”.

It also supports the creation of a civil right to sue for serious invasions of privacy, as recommended by the Australian Law Reform Commission.

Australians lack the protections that Americans enjoy under the US Bill of Rights; we certainly lack the protection afforded under Europe’s sweeping new privacy law.




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It wants the penalties for breaches of our existing Privacy Act increased. It recommends the creation of a third-party certification scheme, which would enable the Office of the Australian Information Commissioner to give complying bodies a “privacy seal or mark”.

And it wants a new or existing organisation to monitor attempts by vertically-integrated platforms such as Google to favour their own businesses. This would happen where Google gives prominence in search results to products sold through Google platforms, or prominence to stories from organisations with which it has a commercial relationship.

The organisation would oversee platforms that generate more than A$100 million annually, and which disseminate news, or hyperlinks to news, or snippets of news.

It would investigate complaints and even initiate its own investigations in order to understand how digital platforms are disseminating news and journalistic content and advertising.

As it notes,

The algorithms operated by each of Google and Facebook, as well as other policies, determine which content is surfaced and displayed to consumers in news feed and search results. However, the operation of these algorithms and other policies determining the surfacing of content remain opaque. (p10)

It makes other recommendations, touching on areas including merger law, pre-installed browsers and search engines, takedown procedures for copyright-infringing content, implementing a code of practice for digital platforms and changing the parts of Australian consumer law that deal with unfair contract terms.

Apart from its preliminary recommendations, there are further areas on which it invites comment and suggestions.




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These include giving media organisations tax offsets for producing public interest news, and making subscribing to news publications tax deductible for consumers.

Platforms could be brought into a co-regulatory system for flagging content that is subject to quality control, creating their own quality mark. And a new ombudsman could deal with consumer complaints about scams, misleading advertising and the ranking of news content.

All of these recommendations and areas of interest will generate considerable debate.

What’s next?

The ACCC will accept submissions in response to its preliminary report until February 15.

At the Centre for Media Transition, we played a background role in one aspect of this inquiry.

Earlier this year, we were commissioned by the ACCC to prepare a report on the impact of digital platforms on news and journalistic content. It too was published on Monday.

Our findings overlap with the ACCC on some points, and diverge on others.




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Many thorny questions remain, but one point is clear: the current regime that oversees digital platforms is woefully inadequate. Right now, as the ACCC notes, digital platforms are largely unregulated.

New ways of thinking are needed. A mix of old laws (or no laws) and new media spells trouble.The Conversation

Sacha Molitorisz, Postdoctoral Research Fellow, Centre for Media Transition, Faculty of Law, University of Technology Sydney and Derek Wilding, Co-Director, Centre for Media Transition, University of Technology Sydney

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Protecting Google from defamation is worth seriously considering


Michael Douglas, University of Western Australia

It has been a huge week for defamation law.

Last Thursday, the NSW Government announced a push to reform Australia’s uniform defamation laws. It is calling for a “cyber-age reboot”. That proposal was backed by a “statutory review” of the NSW Defamation Act. At a meeting of the Council of Attorneys-General, the states and territories agreed to reconvene a working party to consider reform of equivalent statutes around Australia.

The following Wednesday, the High Court delivered its most important defamation judgment in years. In a case that fits perfectly with the theme of the NSW proposals, Milorad “Michael” Trkulja succeeded in his appeal against Google. The Court found that Trkulja could sue the American company for defamation in respect of search results which potentially indicated that he had ties to Melbourne’s criminal underworld.

The next morning, the Victoria Court of Appeal allowed Bauer Media’s appeal from the judgment that awarded Rebel Wilson A$4.5 million in damages. The Court held that Wilson was entitled to A$600,000, and not to millions extra for lost opportunity to earn from roles that she may have been offered had the defendant not defamed her in its gossip magazines. The previous assessment of damages depended on the spread of the defamatory allegations on the internet via the “grapevine effect”.

The record for Australia’s largest defamation judgment is now barrister Lloyd Rayney’s A$2.6 million defamation win against the State of Western Australia, litigated by Perth firm Bennett + Co. If Rayney’s current appeal is successful, that figure may increase even further.

There’s a lot to think about.

The NSW proposal to allow large corporations to sue for defamation is particularly worrying. It would have a significant chilling effect on journalism.

But the issue that the NSW government chose to highlight from its statutory review was that defamation law is ill-equipped for the digital era. I agree that the way we communicate has completely changed in the 13 years since our Uniform Defamation Acts were introduced.




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Trkulja v Google shows it is time for reform

Trkulja was shot in the back in a Melbourne restaurant in 2004. As you’d expect, people wrote about it on the internet. Google provided access to that content through its search engine: web crawlers discovered web pages relevant to Trkulja, indexed them, and ranked them via its Google Search algorithms.

The result of those processes was that Trkulja was associated with some shady figures through Google search. A Google image search for his name would display Trkulja’s picture with those of Melbourne criminals. The results pages contained keywords like “melbourne criminals” and “melbourne underworld photos”.

Google’s autocomplete results would also cast him in a poor light, returning terms like “michael trkulja criminal” or “michael trkulja underworld”. The results page linked to content which described Trkulja as a “former hitman”.

Trkulja sued, claiming that this computer-generated material defamed him. Google argued that the claim was so weak that it should come to an end even before a trial. Victoria’s Supreme Court rejected Google’s argument.




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But the Victorian Court of Appeal allowed Google’s appeal, agreeing that the claim had no prospect of success. It found that the ordinary, reasonable person would not understand that the search results conveyed “imputations” which damaged Trkulja’s reputation. In their view, ordinary people would understand that there may be a disconnect between the words you type into Google and the results that follow.

On further appeal, the High Court unanimously decided that the Court of Appeal was wrong. At least some of the search results complained of had the capacity to convey the idea that Trkulja was associated with dodgy characters. Trkulja was given “the green light to sue” Google. Trkulja’s claim can now proceed.

Even before this case, you could sue Google for defamation

Like other foreign companies, Google is not immune to litigation because it is based overseas. On old principles, Google can be responsible for third party content which it “published” by sharing. It might have a defence of “innocent dissemination”, but perhaps not if the defamed person drew the problem to the company’s attention.

People have won against Google before. A few years ago, Janice Duffy succeeded in her claim that Google should be responsible for linking to defamatory websites. So in a sense, yesterday’s judgment is nothing really new.

It does provide some clarity on whether something like search results has the “capacity” to convey defamatory meaning. It is likely that Google will continue to be sued by all sorts of people who are aggrieved by search results that cast them in a poor light.

The case also demonstrates that our old laws are perhaps ill-suited to the digital era.

We should stop shooting the messenger

Reflecting on this case, it is worth considering whether we should cut internet intermediaries some slack when it comes to defamation law.

We could do so by giving effect to the “safe harbour” proposal flagged in the NSW statutory review. It would provide internet intermediaries with a shield from liability for third parties content. Telcos already enjoy something like this in Australia, which protects them from liability for copyright infringement.

Faced with cases like Trkulja, you would understand if Google simply acceded to every request to remove content from its search results. But what if Google did that for complaints by paedophiles, murderers or dictators?




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Google provides a free public service which is indispensable to our way of life. Without Google’s assistance, many of us would be lost online. When access to the functionality of Google and other intermediaries is limited, our substantive access to information is limited.

Extending safe harbour to internet platforms is worth seriously considering – other countries, like the United States, are already doing this.

The ConversationThe NSW statutory review does not go into these difficult issues in enough depth. In light of the rapid developments in media and technology, the best way forward is for the Australian Law Reform Commission to consider this in detail. We need to make sure that we get the right balance between freedom of speech, free access to information, and protection of reputation.

Michael Douglas, Senior Lecturer in Law, University of Western Australia

This article was originally published on The Conversation. Read the original article.

News outlets air grievances and Facebook plays the underdog in ACCC inquiry



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The ACCC inquiry looks at the impact of digital platforms on the supply of news and journalistic content.
Shutterstock

Andrew Quodling, Queensland University of Technology

The recent Cambridge Analytica scandal and congressional testimony of Facebook CEO Mark Zuckerberg has brought global attention to the power and influence of Facebook as a platform. It has also invigorated discussions about how such platforms should be regulated.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) has been conducting an inquiry into the influence of digital platforms on media and advertising markets in Australia.




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Submissions to the inquiry by a range of media outlets, advertisers, as well as Google and Facebook, were published last week. Although Facebook has expressed interest in participating in regulatory debates, its submission is a disappointing early indication of how we might expect the company to downplay its magnitude and its roles in future regulatory debates.

The purpose of the inquiry

Late in 2017, the Federal Treasurer, Scott Morrison, directed the ACCC to conduct the inquiry into digital platforms, including search engines, social networks and other aggregators. As part of the ongoing inquiry, the ACCC will consider:

the impact of digital platforms on the supply of news and journalistic content and the implications of this for media content creators, advertisers and consumers.

It came about as a result of negotiations between the government and the former independent Senator Nick Xenophon. Xenophon insisted on the inquiry in exchange for his support for the government’s changes to Media Ownership laws.

To some extent, the inquiry retreads familiar ground. Old anxieties about declining revenues for journalistic organisations and the advent of internet technologies and internet-focused stakeholders continue a conversation that has been going for well over a decade.

News outlets air grievances

In total, the ACCC published 57 submissions. This includes contributions from most major Australian media organisations, industry bodies, unions and advertisers.

Many respondents took the opportunity to criticise the narrow scope of the inquiry. The inquiry’s scope is somewhat frustrating considering the complexities digital platforms present. They impact not just media and journalism markets, but also aspects of political, social and everyday life.

While the ABC’s submission was generally favourable in its discussion of online platforms, other Australian media organisations used the inquiry as an opportunity to air grievances about the impact of digital platforms.




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News Corp accused the platforms of abusing the local market and engaging in anti-competitive practices. Commercial Radio Australia pointed to a lack of regulation compelling transparent and structured audience metrics. Nine complained of declining revenues and a lack of platform-specific regulations, while Foxtel raised the issue of copyright infringement.

Seven West Media and Ten argued that there is a barrier to entry imposed on traditional publishers by the significant existing collection of personal data that platforms like Facebook and Google can leverage.

The platforms respond

In their submissions, Facebook and Google both attempted to build a narrative that emphasised how the tools and systems they provide can empower journalists and other content creators. Meanwhile, they minimised or outright ignored the opportunity to discuss the broader concerns of the broadcasters, publishers and individuals who are stakeholders in the industries Facebook and Google are operating in.

Google’s short response to the inquiry is not particularly interesting, in part due to its brevity and its focus on championing Google’s notionally positive influence for publishers. Facebook had significantly more to say in its 56 page submission, which also gives context to Mark Zuckerberg’s recent comments welcoming the potential for regulation.

Facebook plays the underdog

Facebook’s submission reveals how the company portrays itself to regulators, with an interesting element of self-deprecation. Take for example, the statement that:

Facebook is popular, but it is just one small part of how Australians connect with friends, family and the world around us.

Given a user-base that dwarfs the population of, well, even the most populous countries, Facebook’s most compelling option for presenting itself as an underdog in this space is to compare itself by share of “attention”, rather than share of market.

Facebook presents “multi-homing” – the practice of having and using a variety apps on your phone – as a key concern. It paints a picture of precarity in a marketplace that they dominate.




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Facebook’s arguments about competition also ring hollow because the platform’s design and scale allows it to benefit from significant network effects.

Put simply, a network effect is when existing and new users benefit from the growth of a network. A familiar example of these effects can be seen in the services of mobile phone network providers. Telstra and Optus provide cheaper, or no-cost calls or messaging between customers of their own service.

But the similarities end there. While you could still call a friend with a competing mobile phone provider, there is no such interoperability with platforms like Facebook. This design helps Facebook protect its market power by keeping total control over the Facebook platfom’s network.

If you decide to leave Facebook, you sever the connections between yourself and other users of the platform. Given Facebook’s focus on augmenting social functions this can, quite literally, be an ostracising endeavour. In spite of both the recent Cambridge Analytica revelations, and several #deletefacebook campaigns, we’re yet to see a significant exodus of users from the platform.

A disappointing response

Facebook has a colossal user base. Over two billion people use the platform each month, and almost three quarters of those people use Facebook on a daily basis. It owns Instagram and WhatsApp – each of which are profoundly successful platforms in their own right.

The ConversationFacebook is a titan of this industry, and the sooner it stops pretending to be a bit player, the richer our discourse about platforms and their role in society can become.

Andrew Quodling, PhD candidate researching governance of social media platforms, Queensland University of Technology

This article was originally published on The Conversation. Read the original article.

A memo to Google – firing employees with conservative views is anti-diversity


Akshaya Kamalnath, Deakin University

Google’s recent sacking of James Damore for circulating a memo will do the tech giant more harm than good. Not only has the memo been incorrectly dubbed “anti-diversity”, but a majority of Google employees surveyed in a recent poll disagreed with the decision to fire Damore.

A more productive response to the memo would have been to setup an official channel for employees to air these kinds of issues. This way employees feel their views are heard and the company can take into account different points of view while formulating policy.


Read more: What the Google gender ‘manifesto’ really says about Silicon Valley


Google’s chief executive, Sundar Pichai, wrote to all Google employees saying that Damore’s memo had crossed the line by “advancing harmful gender stereotypes in the workplace”. It might have been more advantageous to have a full and frank discussion of Google’s diversity policies and what they are intended to achieve.

Is it too dangerous to talk about diversity?

Although painted as “anti-diversity”, the memo itself raises issues of the alienation of conservative views at Google and the need to be able to discuss diversity more openly. In other words, diversity shouldn’t be a concept that people are scared to discuss openly for fear of being vilified or shamed.

Damore’s memo suggests that those with differing views on diversity are dismissed and vilified. The response to his memo seems to prove his point. This might in fact be the heart of the problem – fear of saying something politically incorrect might in fact be holding people back from understanding the need for diversity measures.

One study found that American corporate directors thought board diversity (in racial, ethnic and gender terms) was an important goal worth pursuing. But they seemed unable to substantiate this opinion with examples of how board diversity might help the company. The authors of the study concluded that diversity seemed to be a “dangerous” subject to talk about.

Shutting down differing views on the matter is antithetical to the idea of diversity. “Inner diversity”, meaning diversity of viewpoints and opinions, is as important as “outer diversity”, in terms of gender and ethnicity etc.

A Canadian report on women on company boards found that boards with more women surpass all male boards in their attention to audit and risk oversight and control. It also highlights that outer diversity (such as having more women on the board) is a proxy for inner diversity – it is a sign of different “gifts, skills, experiences, and perspectives”. If a company focuses singularly on outer diversity while discouraging diverse viewpoints it won’t realise the real benefits of diversity in the first place.

Rationales for diversity

The rationale for measures promoting diversity is twofold. Women and minority groups have to overcome many barriers including selection bias while being recruited. And diversity, particularly in problem-solving groups, is ultimately good for business.

Diversity measures seek to reduce (if not eliminate) biases by expanding or diversifying the pool of candidates being considered for each position. For example, programs where female candidates are given mentors opens up new opportunities.

Damore’s memo argues the biological differences between men and women might be one of the reasons for the low number of women in the tech industry. However, recent neuroscience research shows there is not enough evidence to conclude that there are significant differences in the male and female brain. So while Damore’s view is not unequivocal, this perception could impede the effectiveness of diversity measures.

Other research shows that more men than women study computer science, engineering, physics and mathematics in the US. This could account for some of the gender disparity in tech companies. However, this is not true in all countries.

For instance, women make up nearly half of computer science and computer engineering students in India. It might be interesting to study what factors deter women in the US from studying these subjects.

But in order to address these issues it is necessary to be able to discuss them, and then assess what a diversity policy is intended to fix. To that end, companies must create forums and events to discuss the rationales for diversity policies and also allow employees to voice their views in this regard.

The ConversationA starting point could be to have employees fill out anonymous surveys to gauge perception of diversity policies. Based on this, appropriate discussions can be encouraged. Companies could also consider making the rationale for the diversity policy available along with the policy itself. This process will result in more informed policy choices and perhaps a more inclusive work culture.

Akshaya Kamalnath, Lecturer, Deakin University

This article was originally published on The Conversation. Read the original article.

Google, Facebook fall into line on tax, but eBay remains defiant


Michael West, University of Sydney

Under pressure from the Australian Tax Office, Google and Facebook have begun to bring their revenue onshore to be taxed. eBay remains recalcitrant, still deeming its Australian business to be a Swiss business and thereby avoiding millions in income tax and GST. The Conversation

It is multinational reporting season once again and the early signs are the government’s multinational tax avoidance laws are starting to work. But the world’s largest corporations are still paying a fraction of their fair share of tax in this country.

Until this year, Google and Facebook entertained a corporate structure that booked the billions of dollars of revenue they made in Australia directly offshore. However, eBay is still blithely pretending it doesn’t have an Australian business and that the billion dollars a year it makes from operating its online auction house in this country – through which Australians buy and sell things with other Australians in Australia – is really the business of an entity residing at 15 Helvetiastrasse, Bern, Switzerland.

According to its accounts, the latest for the year to December 2016, eBay Australia is still masquerading as being in the business of “the recommendation of market penetration strategies” on behalf of eBay International AG.

So it is that every cent of the $59 million that eBay disclosed as its cash-flow statement for 2016 came from related parties, mostly for “rendering of services”. On this, eBay paid $1.9 million in tax after ratcheting up its costs by $13 million to wipe out most of the $20 million uplift in cashflow. The average salary at eBay, if the accounts can be believed, is $312,553 – 109 employees, according to the directors’ report, getting $34.1 million.

Mind you, according to the directors’ report, these 109 people are engaged in carrying out the principal activities of the company, which are “the recommendation of market penetration strategies, advertising and promotion activities”.

Gobbledygook, but the numbers are irrelevant anyway. The estimated billion dollars or more which eBay is said to make in Australia is not even included in its financial statements, just the revenue from its secretive associates. Moreover the accounts are not consolidated, according to the notes, rendering the entire disclosure a farce. Auditor is PwC.

Funnily, though, the cover page Form 388, authenticated by EY, talks about “consolidated revenue” and “consolidated gross assets” – despite the fact that PwC says the accounts are not consolidated.

So eBay is the quintessence of the undisclosed agency, a puppet regime designed to whisk Australian profits offshore to a tax haven. The shadow directors are in Bern and the ultimate parent eBay Inc is in the US.

Over the past 15 years, eBay has dodged GST and paid income tax of just $8 million (almost one-fifth of its bill for “professional fees” at $38 million), despite its billions of dollars in cash-flow.

Positive signs of change

Focusing on more positive developments on the multinational tax scene, arch-tax avoider Google Australia and New Zealand is now recognising that a portion of the profits it makes in Australia are in fact Australian rather than Singaporean.

Industry observers believe Google makes about $3 billion in sales from its advertising business here. Until this year, its only revenue has come from three related parties via service arrangements. Now, with the introduction of the multinational anti-avoidance legislation, Google has recognised roughly one-third of its Australian revenue as Australian.

In the broader context it is worth considering the effect of the digital revolution on Australia’s tax base.

Where the TV networks, News Ltd (though belligerent on the tax front) and Fairfax Media once paid hundreds of millions of dollars a year in tax collectively, they are now struggling to make a profit. In their place, it is estimated Facebook and Google now pick up 80% of the advertising dollar in this country but they pay negligible tax.

Globalisation and the internet are similarly challenging Australia’s revenue base in retail, financial services and other sectors. Paypal, for instance, eBay’s corporate cousin, paid more than $1 billion of its $1.2 billion in revenues to its parent and associates in Singapore over the nine years to 2014 thanks to a “service agreement”.

Looking at the accounts, thanks to the new tax law, revenue rose from $498 million to $1.14 billion. Sales and marketing expenses, however, recognised for the first time at $324 million, knocked profits about. Profit rose from $50 million to $121 million on which tax expense was $16 million, up from $3 million.

Actual tax paid as per the cash-flow statement was $41 million, up from $16 million. So, like Apple, Google is beginning to pay significant amounts of tax, although still way short of the mark, and it appears to have bloated its cost base here as much as humanly possible. Assuming group sales are heading towards $3 billion (Google booked $882 million in advertising revenue), the real income tax number ought to have nine digits.

For its part, Facebook booked revenue of $327 million, ten times the $33.5 million recorded in the the previous year. After forking out $271 million to related parties for the “purchase of advertising inventory”, it made a profit of just $6.3 million on which it paid $3.4 million in tax.

Under its previous structure, Facebook sales were booked to an associate in Ireland. For the purposes of reporting as little as possible, the company even won an exemption from the corporate regulator when it claimed to be a “Small Pty Company Controlled By a Foreign Coy Which is Not Part of Large Group”. That its foreign parent was valued at more than $170 billion on Wall Street didn’t seem to matter.

Now, Facebook has declared itself to be a reseller of local advertising inventory. Both Google and Facebook are audited by EY.

None of these companies operate to maximise profits for the benefit of their Australian entities. All have small, token boards of directors. All operate in the interests of their foreign overlords and should be taxed as agencies.

It is a good thing the authorities are catching up with multinational tax lurks. This would not have occurred without public outrage and dissent. Nor would it have occurred without the Senate Inquiry into Corporate Tax Avoidance in 2015, which thrust the issues into public view. They should keep this Senate committee rolling with biannual investigations where corporate leaders are held to account and subject to full public scrutiny. After all, directors have a fiduciary duty to perform in the interests of their companies, not some tax officer in California.

Further, the architects of multinational tax avoidance – EY, Deloitte, PwC and KPMG – ought to be subject to greater disclosure requirements rather than operating as murky partnerships whose partners pontificate to government on tax policy while advising their big clients how best not to pay tax, or “leakage” as they call it in the trade.

Michael West, Adjunct Associate Professor, School of Social and Political Sciences, University of Sydney

This article was originally published on The Conversation. Read the original article.