Advertising Guest Columns
5 mins read

Governments want Google and Facebook to pay in dollars. They should pay in data.

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Rumors. Propaganda. Lies. False content is hijacking Facebook feeds, and the platform is doing far too little to combat it. There were 1.52 billion interactions with misinformation on Facebook in Q3 this year. That’s about five times worse than Q3 in 2016 during the last election. At the same time, interaction with accurate, quality news has dropped down to pre-pandemic levels.

Meanwhile, on the other side of the garden, the federal government has started investigations into Google search technology, focusing on its monopolistic practices across devices. How Google dictates what content we see is not even a focus of the investigation.

These findings are particularly significant in regards to the international dialogue around governments requiring Google and Facebook to pay publishers for using their content. Clearly, good news needs to be supported. Unfortunately, laws such as those unfolding in Australia and France are designed in a way that will hurt publishers instead of help.

Small Governments Can’t Fight Big Companies

Taxing two large companies country by country does not, as Australia notes, “even the power imbalance.” Instead it simply pushes the companies further toward a path of selfishness. Google and Facebook are smart enough and large enough to work around attempts to tax them in order to subsidize news within a specific country. Just look at Spain, where Google responded to regulations and requirements to pay for news by simply turning off parts of their site to Spanish citizens, like Google News. Given that only a tiny percentage of Google’s revenue comes from quality news content, especially from news in smaller countries, they are much less likely to cooperate and comply than they are to find a workaround and move on. In this context, there is little care about the real news publishers, and more care in minimizing payments to governments.

If smaller countries like Australia or Spain were Facebook and Google’s only problem, it might be different—they might be more inclined to cooperate and keep Google News live, for example. But, agreeably paying these taxes sets a precedent that they will comply without being protective, leaving them vulnerable in bigger markets if similar laws come into play. So, Facebook and Google are forced to play defense and operate under the assumption that the US, UK or China could get in on the action, which could be far more complicated and costly. 

Big Government is Bad At Fighting Big Companies

Google and Facebook are based in the US, where they have been able to acquire other companies and create enormous, dominant entities. The government has collected billions in past settlements, but has done very little to get at the heart of why Google and Facebook are so dangerous. The current US Google investigation cares more about deals that Google has made to have its search engine on iPhones than it does the content and search results that are served to citizens. Yes, a search monopoly is a problem, but a huge part of that problem is that Google has been able to dictate what content people see based on their own profits.

Not only are Google and Facebook stifling news and content industries with lax quality control and monopolistic behavior, they’re collecting customer data and not sharing it with their users, advertisers or publishers appropriately. Google combines data from their wide ranging services like maps and search to get a startlingly accurate customer picture, but they don’t share that data with the advertisers and websites driving much of the activity. Similarly, Facebook has opaque and invasive data practices that were exposed during the Cambridge Analytical trials, which hasn’t been much improved since.

These elements are all related, although the US government has historically treated each one separately because it still has a very outdated view of monopolies. At this point, media, technology and data are essentially one industry, inter-related because advertisers buy audiences, not just content, and audience data flows through Facebook and Google for nearly everything they do.

If the US antitrust activity against Google and Facebook is going to be effective, it needs to address this “mega industry” element of their power. Forcing Google to sell Chrome is certainly one valuable way to disintermediate the current first party data/third party cookie power struggle happening within digital media. Forcing both Google and Facebook to share audience data transparently with the advertisers who pay them and publishers that supply their content would be another. It would be far more valuable, difficult to work around, and more sustainable than levying a tax. It would also change how they react to the regulations. Google turned off Google News in Spain because they could easily spare a few million dollars in ad revenue. Even the few billion dollars Facebook has to pay the US was not as painful for them as it would be if they had to share the very asset that gives them a competitive advantage in the market – their customer data. 

In addition, it should be required that Google, Facebook and other walled gardens who create unfair leverage for themselves by consolidating data across their businesses be more transparent to consumers about their practices. Educating consumers about the dramatic difference between the data these platforms have compared to an average publisher site and the quality control put on content would certainly help level the playing field. Imagine if a consumer saw a disclaimer next to a fake news article on Facebook that said, “Advertisers value this content as worthless because it contains fake information. However, they are still paying us to target you with this ad because of how much we know about you. Are you OK with us taking your data, showing an ad to you, and showing you fake news?” 

Put in this context, the situation is much more bleak, the consequences much more dire. The complete failure of our governments to protect citizens, publishers, and even advertiser budgets is very clear. We’re working hard as an industry to solve for the “cookiepocalypse” and the support of good journalism. We must remind ourselves and our peers about the need to preserve the balance between advertiser, publisher and reader when we talk about a cookieless future, and find solutions that don’t rely on walled gardens.

The battle’s just begun. Early moves by governments still suggest an incomplete understanding of how to effectively curtail Google and Facebook’s power. However, if publishers, advertisers and the public make more noise, we can start to make headway—by making it more clear just how much the walled gardens profit from lax content standards and how much more important it is for them to share their data, not just their profits, to fix the problem.

Mike Shaughnessy
SVP Operations and Partnerships, Kargo

Kargo is a mobile-only advertising company that creates innovative campaigns for over 200 of the world’s best-known brands. Its marketplace is an invitation-only collection of performant publishers that allows it to reach 100% of smartphone users in the United States. Additionally, Kargo is the first and only mobile advertiser to achieve 100% ads.txt compliance. Kargo is TAG certified and a member of the Coalition for Better Ads.

Disclaimer: The views expressed by guest contributors are their own and do not imply an endorsement of them or any entity they represent by WNiP.