Regulator should hold Facebook to account for spreading misinformation, urges UK review

A “news quality” regulator should hold online platforms such as Facebook to account for spreading misinformation, urges a British government-commissioned report.

Dame Frances Cairncross was appointed last year to propose ways to help to sustain a free press in Britain.

A “news quality” regulator should hold online platforms such as Facebook to account for spreading misinformation and the BBC should face restrictions on its digital operation, according to a British government-commissioned report.

Digital news products should also enjoy the same VAT exemption as printed papers, according to the Cairncross Review, which is published today.

Newspapers are effectively VAT-free because of their importance in promoting literacy and democratic accountability. The review argues that this zero-rating should be extended to digital publications.

The BBC also faces restrictions on its digital operation after the review ordered greater scrutiny of its impact on local newspapers.

Dame Frances Cairncross was appointed last year to propose ways to help to sustain a free press. Her recommendations include:

• Direct financial support for local journalism through the expansion of a scheme in which nearly 150 BBC-funded reporters are placed in local newsrooms.

• The “complex and opaque” online advertising market to be investigated by the Competition and Markets Authority (CMA).

• The creation of an Institute for Public Interest News, responsible for channelling public and private money into sectors of journalism that require most support.

Facebook and Google together accounted for 54 per cent of all online advertising revenues in Britain in 2017.

Last year News UK, publisher of The Times, brought a case against HMRC arguing that its daily tablet and mobile phone editions should be zero-rated for VAT purposes. A tax judge accepted that the digital editions were “fundamentally the same” as the printed newspaper but said they could not be zero-rated without a change in the law.

News publishers had wanted Dame Frances to propose a compulsory levy on tech giants to fund the journalism from which they ultimately profit.

Facebook and Google together accounted for 54 per cent of all online advertising revenues in Britain in 2017, according to figures published alongside the review. Facebook in particular has faced criticism for refusing to share revenues with publishers whose articles populate users’ feeds.

Dame Frances fell short of backing a levy, saying that her priority was to “encourage new models to emerge”, but set out a blueprint for making social media companies behave more responsibly.

Online platforms would face a “news quality obligation” to help users to identify the reliability of news sources and the companies’ efforts to tackle fake news must be overseen by an external regulator. “This task is too important to leave entirely to the judgment of commercial entities,” the review concluded.

The review notes that many publishers regard BBC News Online, which is free to access, as an obstacle to building a subscription model to fund their journalism. It recommends that the media watchdog Ofcom assess the BBC website’s market impact to determine whether the corporation should be doing more to drive traffic to commercial news outlets, particularly local titles.

Jeremy Wright, the culture secretary, is writing to regulators including Ofcom and the CMA to open discussions about the Cairncross recommendations. The government will respond in full later this year.

The Times