Jeff Jarvis warns Congress about regulating tech platforms

I have a great deal of respect for Jeff Jarvis, the esteemed author and professor from the CUNY/Newmark School of Journalism. Today, he wrote a letter to Congress regarding its hearings on Internet regulation. While I have argued for regulating big tech platforms, he makes good points about the dangers of ill-considered regulations.

Jarvis shows how ill-considered regulation will have unintended consequences

You can read the full text of Jarvis’s letter on his blog here. Below are relevant excerpts with my commentary.

Statement to the Judiciary Subcommittee on Antitrust

March 12, 2021 by Jeff Jarvis

I write to the committee to express my concern about often well-intentioned but ill-conceived internet regulation, which could have deleterious effects on freedom of expression; which tends to protect incumbent media and technology companies at the expense of innovation and competition; and whose unintended consequence is frequently to grant internet platforms yet greater power. It is worthwhile to examine the effects of internet regulation elsewhere as it is debated here.

A major theme of Jarvis’s argument is that big companies can bear the burden of regulation, and therefore regulation tends to favor big companies, both tech companies and well-funded news conglomerates.

Consider, for example, Australia’s media code. The net result, according to the news site Crikey, is that the country’s existing media duopoly of News Corp. and the Nine Network will receive 90 percent of the money being paid by Google and Facebook, both of which are now in the position to decide which news organizations should receive support. Small news startups that might compete with the powerful incumbents receive no protection or support in the law. The Australian code amounts to a link tax — for those companies that link to news are required to pay for news — and Sir Tim Berners-Lee, inventor of the web, testified to Australian legislators that such a precedent would “make the web unworkable around the world.” It would break the internet. I regret that in the end, Google and Facebook succumbed to what I see as corporate and political blackmail.

Australia’s attempt at regulation would charge companies like Google and Facebook for linking to news sites. For a short time, Facebook removed all news site links, most likely to show everyone how bad that alternative might look. The intent of the law is to support news organizations. The result is to favor large news organizations and make the Web unworkable. I agree with Jarvis that this is the wrong approach.

In Europe, various changes to copyright law — Germany’s Leistungsschutzrecht, Spain’s link tax, the EU’s Articles 15 and 17 of the its Directive on Copyright — amount to regulatory capture, for the large internet companies can afford compliance but I have spoken with smaller competitors for whom the expense and effort are crippling. . . .  In addition, Singapore instituted a fake-news law, which puts internet companies in the unwanted position of being arbiters of truth. Similarly, India is enacting regulation that would require platforms to take down speech that is false or threatens national unity.

You cannot easily define or regulate truth. I agree with Jarvis that laws that compel platforms to assess the truth of what they post are unworkable, and would further advantage large platforms.

In the United States, Google’s recent announcement that it will forego ad targeting on the web based on third-party data was applauded by privacy advocates who have demonized web cookies as so-called “surveillance capitalism.” But this again amounts to regulatory capture as Google itself has plentiful first-party data about consumer behavior as well as the resources and technical means to innovate in advertising. Incumbent publishers, on the other hand, are stuck without their own first-party data or innovation. I know this because in my university center, I spent years trying to convince publishers to change their product and business strategies to prepare for this day. They generally insisted on relying on their dying print businesses and on third-party ad networks online, and now they are retreating behind paywalls. As a result, just when we need it most, reliable news is becoming a product for the privileged few who can afford it. According to Oxford’s Reuters Institute, only 20 percent of Americans pay for online news and it is a winner-take-all market with most people paying for only one subscription for news — almost two thirds of subscriptions go to just three publishers: The New York Times, The Washington Post, and Rupert Murdoch’s News Corp.

This discussion shows that what outwardly looks attractive — like Google’s ending third-party targeting — can sometimes have unintended consequences. I’m not sure that Jarvis’s solutions for local journalism are the answer, but in the end, it’s moot — those entities are caught between dwindling numbers of people willing to pay and limitations on ad-targeting.

Similarly, I argue that breaking up major technology companies is an emotional response to the discussion of technology and power. It would not meet the test of rectifying consumer harm, for users benefit tremendously from free, open, and inexpensive services. Also, there is considerable competition; note Microsoft’s role in this debate.

I agree, and have written elsewhere, that breaking up the platforms would punish the companies without solving the problem. We’d just have several of smaller companies promoting filter bubbles and the sharing of lies rather than a few large ones. How does separating Instagram from Facebook make either of them more responsible, or less abusive to publishers?

Instead, in both industries — technology and media — the best cure for concerns about size is to encourage and support entrepreneurship and new competition. In my university, I started a first-of-its-kind program in entrepreneurial journalism to teach journalists to do just that. I hope next to turn my attention to internet studies, to foster the design and creation of a next generation of the net: one built not just to speak but to listen, one designed to build bridges rather than battlements, one that protects the benefits of today’s historically unprecedented opportunity to hear voices too long not heard in mass media. There is much work to be done and much opportunity to create competitors to the present proprietors of the net and media. This is where we should focus our attention in policy.

This is why I like Jarvis — he’s not only smart, but he’s trying to solve the problem. His work may help, though I don’t think it’s enough.

In what I have said here, it might sound as if I oppose all internet regulation. I do not. I worked for more than a year with a Transatlantic High-Level Working Group on Content Moderation Online and Freedom of Expression, convened by former FCC Commissioner Susan Ness under the auspices of the Universities of Pennsylvania and Amsterdam. . . . Our report recommended a flexible framework for internet regulation based on transparency as the basis of accountability as well as the establishment of e-courts to rule on matters of legality where that should occur, in public and in court.

I agree that we need more flexible regulatory framework. I’ve published my own ideas on it. It doesn’t resemble Jarvis’s, but it’s worth discussing what might actually work instead of the current blunt attempts that are likely to lead to unintended consequences.

To put this in my terms, I have long argued that both technology and media companies should make covenants of mutual obligation with their users and the public . . . Internet regulation should not be about punishing power or success but instead about creating the means to work together for a better internet, a better society, a better future.

Yup. We need better ideas.

Three principles for Internet regulation

So, how do we avoid heavy-handed regulation that makes things worse — like what was attempted in Australia — while still holding the rapacious Internet platforms responsible?

I suggest three principles:

  1. Put the burden on the giants. Regulations should apply to companies with tens of millions of visitors and billions in revenues. As Jarvis correctly points out, broad regulations tend to favor rich companies who can afford to comply. So apply the regulations primarily to the rich companies who create the broadest and most widely damaging effects — and leave the little guys, both in tech and in content, alone.
  2. Tax them. These are rich companies. They have the money to pay. Take it. A tax on big platforms based on their ad revenues, for example, could influence their behavior.
  3. Apply the tax to even the playing field. In my op-ed, I suggested a tax in the form of ads that promote a more balanced distribution of news. But that’s just one possible way to make things better. You could use the tax to fund journalism and journalistic innovation, in line with Jarvis’s suggestions. You could use it fund fact-checking sites. You could create another C-SPAN-type network dedicated to bring people together for balance.

We have a long history of taxing products that are bad for citizens: liquor, cigarettes, and alcohol, for example. Big internet companies are just as toxic. They deserve the same treatment. And by applying the corrective to the biggest companies, we avoid promoting monopoly and burdening small and innovative organizations, whether they’re tech companies or content creators.

I wish I had as long and dedicated a career examining these issues as Jeff Jarvis does. But I do know one thing. We need to take money out of big Internet platforms and use it to fix the problems they create. The devil is in the details, for sure. So let’s get into it and figure out what might work without destroying the innovation that makes the internet so vibrant, or the journalistic organizations that fight daily to save us from ignorance.

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  1. The best tax policy is to tax what you don’t want. Does the Federal government not want advertising, which sells products and creates jobs?

    The real problem with social media is that it empowers anyone to be a publisher. In the print era, the cost of production limited circulation to what could be financed by advertising, but there was editorial control which became more ethical, sophisticated, and separate from ad revenue over time. Social media are basically amoral, caring little about what people read as long as as they spend time on platform.

    Based primarily on the outcome of the 2016 election, social media have been forced to exercise editorial review. The way forward is most likely to move the social media publishing model to more closely resemble the US print and broadcast models of the of the postwar 20th Century.

  2. One thing that occured to me during the debate about banning Trump from social media is that Twitter and Facebook have it exactly backwards; instead of giving the people with the largest reach leeway to bend, fold, spindle and mutilate their terms of service, they should enforce those terms of service more stringently the more followers a person has. Or to put it another way, they should bias their enforcement resources towards the voices that have the most potential to cause damage. @realDonaldTrump and @AOC should be held to a higher standard than @yourcrazyunclephil