Markets will do a better job than state regulation
- The rise of the ‘tech giants’ is, of course, a significant commercial threat to more traditional media, but it also raises some potentially important issues of public policy. These companies have variously been accused of facilitating the spread of ‘fake news’ and extremist material, dodging taxes, and exploiting their market dominance.
- In reality, ‘fake news’ is nothing new, nor is it as influential as many assume. Most people rely on multiple sources for information. Television and newspapers are still trusted far more than online platforms.
- The market is also coming up with its own checks and balances, such as fact-checking services. The internet may have provided more channels for ‘fake news’, but new technology has also made it easier to find the truth.
- The UK newspaper industry itself shows how self-regulation can be effective, especially when supported by the backstops of existing criminal and civil law.
- The internet is not the regulation-free zone that some suppose. But, in any event, the tech companies have a strong economic interest in protecting their brands and being responsive to the demands of their customers and advertisers.
- It may be worth considering some ways in which these pressures could be strengthened, such as obliging new platforms to publish a code of practice like those adopted by newspapers. However, most already do, and the rest will surely follow.
- The taxation of tech giants raises many issues relevant to any multinational company. It seems reasonable to expect firms to explain clearly what tax they pay. But an additional levy on the activities of tech companies would be inconsistent with the general principles of fair and efficient taxation.