New digital threats to media pluralism in the information age

The paper “New digital threats to media pluralism in the information age” (Parcu, P.L.) will be presented at the 8th Conference on the Regulation of Infrastructures (20-21 June, 2019).

ABSTRACT

Notwithstanding the unprecedented abundance of information in what has been rightly defined as the ‘information age’ (Castells 1996), concerns about the health of media pluralism and the quality and diversity of news have increased in recent years. The paper concentrates on the threats that we consider the most important in order to discuss which responses are emerging, or are likely to emerge, from our markets and societies. The paper is articulated into two sections.

In the first one we review academic literature analysing threats emerged from the business models associated to the digital revolution, and threats which derive from the technologies embedded into new social media. We particularly focus on the group of companies, popularly called GAFAM (Google, Amazon, Facebook, Apple and Microsoft) which have established a dominance on the digital markets (Smyrnaios 2018; Galloway 2017; Barwise & Watkins 2018; Moore & Tambini 2018) and on the features of the business models that have enabled the rise of these tech giants and the establishment of their economic power on digital markets (Rochet & Tirole 2003; Evans 2002; Evans & Schmalensee 2007; Gawer 2014). Monopolistic threats to information are deriving from the high market shares of digital gatekeepers since these companies, in the media sector, have market shares that were rarely seen before. The concentration of economic power presents worrying political implications as the debate about disinformation online and the so-called ‘fake news’, exploded during the campaign for the “Brexit” referendum, and after the US Presidential Elections in 2016, has already made clear (Allcott & Gentzkow 2017; Tambini 2017; Tambini 2018; Wardle & Derakhshan 2017; Vosoughi et al. 2018). Socio-technical practices associated to the widespread use of social bots, computer algorithms that automatically produce content and that interact with the social media’s human users (Shao et al. 2018) as well as the new techniques of data mining, which have vastly increased the quantity and precision of voter information, contribute to amplifying serious threats, such as the invasion of privacy, data breaches, a decrease in political knowledge and pluralism, manipulation, and the exclusion of certain groups (Nenadic 2018).

The second section discusses possible responses to the threats presented in the previous section, starting from a set of questions: is there a market failure? Is the quality of information and pluralistic information a public good that is necessarily under-supplied in the digital environment? Or, is it only/mainly an issue of social and political choices that has a dimension that transcends economics/consumer welfare themes, and that requires instead to be dealt with under the categories of the fundamental rights of individuals, or the essential characteristics of democratic societies? Arguing that self-regulation cannot be considered a reliable or sufficient instrument, the section analyses other traditional public instruments of intervention and the role of competition law in the actual picture. This body of law is currently at the centre of a polarized debate between those that argue that the problems with GAFAM are not competition problems and competition authorities should therefore avoid intervening and those advocating for the abandonment of the consumer welfare standard and for a strong application of competition rules (Geradin 2018).

Possible responses are categorized into short-term (promoting transparency of political advertising), medium-term (working towards the evolution of competition law; devising a new institutional framework for the Internet) and long-term (investing on digital media literacy; empowering quality journalism) measures. In any case, a key message of the paper is that either by market forces or by public intervention, in the long term, it will become decisive the emergence of a new effective business model for professional journalism, since a new economic equilibrium of edited media is probably the key for reaffirming that watchdog role of journalism that remains essential for democracy.

Presentation is available here.

ABOUT THE AUTHOR

Pier Luigi Parcu is part-time Professor at the European University Institute (EUI) from 2010. He is currently Area Director of the FSR Communications & Media, Director of the Centre for Media Pluralism and Media Freedom and Director of the Florence Competition Programme in Law and Economics.

From 2004 he is the Chairman of a consultancy company specialized in antitrust and regulatory issues. From 2000 to 2003, he was CEO of the Independent System Operator running the Italian Electricity Grid (GRTN). From 1991 to 2000 he was the Director of Investigation at the Italian Competition Authority (AGCM) in charge of several regulated sectors. Previously, he served as Chief Economist at the Italian Security and Exchange Commission (CONSOB) and as Economist at the International Monetary Fund (IMF).

He holds a Ph.D. in Economics from the University of California at Los Angeles (UCLA). His research in the area of industrial organization and law and economics focuses on the interaction between regulation and antitrust in shaping firms’ behaviour. As regards research in the media and Internet areas, Professor Parcu’s interests focus on the effects of ownership concentration and internal governance of the media enterprise on pluralism and freedom of expression and on the influence on offline business models of new economic developments related to online platforms, smart cities and artificial intelligence.