House of Lords Communications Committee Inquiry “The Internet: to regulate or not to regulate?”, An overview of the evidence, Part 3 – Oscar Davies

23 09 2018

This is the final part on a series looking at the evidence submitted for the House of Lords Communications Inquiry “The Internet: to regulate or not to regulate?” (Part 1 and Part 2 were published in July and August). Part 3 considers the responses to questions 7 to 9 of the Call for Evidence.

  1. In what ways should online platforms be more transparent about their business practices—for example in their use of algorithms?

Her Majesty’s Government (HMG) is due to invest £9 million in a new Centre for Data Ethics and Innovation. This will identify the measures that are needed to strengthen and improve the way data and AI is used and regulated. It will also identify steps that are needed to ensure that law, regulation and guidance keep pace with developments in data-driven and AI-based technologies.

The three principles that Facebook considers important are transparency, non-discrimination, and increasing user control over users’ experiences. As a result of widespread complaints about their lack of algorithmic transparency, Facebook has made a number of guarantees, such as publishing more information about how their algorithms work in a series of blog posts called News Feed FYI that explains how News Feed works, for example. Additionally, on each person’s News Feeds there is a tool to let users select people to “See First” in order to greater customise their experience.

TripAdvisor considers itself as transparent as is necessary. The review website states that it already explains to its users (business partners and individuals) how the “popularity Index” ranks results: “It provides the key information to establish trust and, for businesses, we also provide tips to improve their ranking. There is no need to go beyond this level of information.”

Google boasts a range of explanatory websites such as describing How Search Works, over 600 videos on the Webmaster Help YouTube channel, and an interactive Search Console tool – all there to help people to understand rankings and make using the sites easier. Google further considers that human evaluators, who assess the quality of Google’s search results, provide useful feedback on the changes.

Crucially, Google argues that “we do not believe that complete transparency will always be helpful or productive, for example for algorithms”. Though at first this may sound like an evasive way to maintain opacity concerning their algorithms, Google’s evidence goes on to explain that “full transparency”, revealing the “raw” code of the algorithm is unlikely to be useful to many. In place of this, Google states “it is more valuable for users to understand the inputs that go into algorithm design and how they help achieve desired outputs.” Whether users can successfully understand Google’s algorithms through these educational tools and ‘inputs’ is yet to be seen.

  1. What is the impact of the dominance of a small number of online platforms in certain online markets?

 Channel 4 takes a strong stance resisting the current state of affairs:Channel 4 believes that that the current digital media market is far from fair, open and competitive”. It asserts that “the lack of regulation has led to the emergence of a duopoly in the form of Facebook and Google which has distorted the marketplace.” The TV channel goes on to state that insufficient regulation of these two players – commanding 84% of global spend in 2017 – has surfaced a number of societal issues such as “fake news and misinformation, data misuse, extremist content, ad fraud and brand safety, all of which need to be addressed as a matter of urgency”.

Trip Advisor goes further, stating that “The European Commission has found Google being liable to abuse its dominant position as a general search engine provider in the EEA Member States.” Google’s “preferential display” of its own services are said to harm competitors and consumers. As a result of these “discriminatory practices”, Trip Advisor contends that Google’s products are shown “before the most relevant search results”.

In Google’s evidence the company predictably supports the idea of the dominance of a small number of online platforms, it being one of the key players. However, sincerely or not, it also vouches for the importance of diverse individuals and businesses succeeding. A report from Deloitte in 2015 found that for every £1 businesses in the UK spent on AdWords (Google’s pay per click search marketing program), Google receive £3-£8 in profit. Deloitte estimated that this created at least £11 billion in economic activity and supported over 200,000 jobs in 2014. Though these statistics are surely accurate, they omit the profit that Google is undoubtedly making in AdWords itself and more broadly having the control to regulate the entry of these smaller businesses into the market.

Facebook is similarly unapologetic about its dominance, though states that it is “committed to seeing a healthy ecosystem which will continue to flourish.” It uses statistics to back up the veracity of its assertions, stating that:

“Research has shown that across six countries that were surveyed in Europe (including the UK) benefits include, (i) 49% of Small and Medium Businesses (SMBs) on Facebook say that they have been able to hire more employees due to growth since joining Facebook, (ii) 57% of SMBs on Facebook say that they have increased sales because of the platform, and (iii) 71% of SMBs on the platform say that the platform helps them attract customers”

Facebook’s conclusion is that it “helps small businesses across the world – particularly here in the UK – grow and create jobs.”

  1. What effect will the United Kingdom leaving the European Union have on the regulation of the internet?

At the time of submitting the evidence, HMG’s stance is that after Brexit, the UK will not be part of the digital single market. Instead, it will look for partnerships bilaterally and multi-laterally through organisations such as the OECD, G7, and G20.

HMG also emphasises that it wishes to retain the UK’s policy on net neutrality, the principle that Internet service providers should enable access to all content and applications regardless of the source, and without favouring or blocking particular products or websites. Ofcom is the national regulator that will aim to maintain the UK’s position on net neutrality.

The Internet Service Providers’ Association (ISPA) stresses that Brexit could provide an opportunity to make advances on the internet at a pace at which is not possible at EU-level: “however, we must be careful to maintain the fundamental protections afforded to both users and service providers by the E-Commerce Directive”. ISPA is keen to support HMG’s commitment in the Digital Charter to make the UK the safest place to be online. It finishes with the warning that if future regulation in the UK becomes significantly more stringent than that in other jurisdictions, “the UK economy will be put at a disadvantage”.

Many submitting evidence could not answer this question adequately, supporting the government’s commitment to GDPR and the Data Protection Bill, but claiming it is too early to know whether this will be an effective strategy in successfully regulating the internet in the UK.

This is the end of a 3 part series on the House of Lords Inquiry in Internet Regulation.  A report is due to be published by the end of 2018.

Oscar Davies is a media lawyer who will start pupillage at One Brick Court in October 2019.


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