Taxing Tech Companies & ISPs to Fund Journalism?

Taxing Tech Companies & ISPs to Fund Journalism?

Jeremy Corbyn, the leader of Her Majesty’s Opposition in the UK, has proposed taxing large tech companies and Internet service providers (ISPs) as a way of raising funds for the BBC and investing in independent and regional journalism.

During a recent television appearance at the Edinburgh TV  Festival, Corbyn said, “One solution to funding public interest media could be by tapping up the digital monopolies that profit from every search, share and like we make.”

Corbyn added: “A strong, self-confident government could negotiate with these tech giants to create a fund, run entirely independently, to support public interest media. Google and news publishers in France and Belgium were able to agree a settlement. If we can’t do something similar here, but on a more ambitious scale, we’ll need to look at the option of a windfall tax on the digital monopolies to create a public interest media fund.”

Corbyn also drew attention to the potential of a digital license fee, which would further provide a financial boost to the BBC and level the playing field vis-a-vis the large digital and media conglomerates.

Corbyn said, “A digital licence fee, supplementing the existing licence fee, collected from tech giants and Internet Service Providers, which extract huge wealth from our shared digital space, could allow a democratised and more plural BBC to compete far more effectively with the private multinational digital giants like Netflix, Amazon, Google and Facebook. This could also help reduce the cost of the licence fee for poorer households.”

Tech Companies & ISPs Respond to Corbyn’s Digital Tax Proposal

Tech Companies & ISPs Respond to Corbyn’s Digital Tax Proposal

Obviously, an array of tech companies and the Tory Party criticized Corbyn’s suggestions.

Anthony Walker, the CEO for techUK, said, “It is good to see Mr Corbyn engaging on these issues, however we need better ideas than just another proposal to tax tech companies. The Cairncross Review has been set up explicitly to look into the future of high quality journalism in the UK.  Many techUK members are engaged in contributing detailed submissions to this review and we hope that Labour will engage constructively with the process.”

Furthermore, the Internet Services Providers’ Association (ISPA) suggested that following Corbyn’s proposed path “could divert resources away from this investment and slow down broadband rollout.”

Additionally, the Tories warned Corbyn that this would not be a wise idea, as the cost of services for the end consumer would increase.

James Cleverly, Tory deputy chairman, said, “Tech companies would just put up their prices and pass this Internet Tax on to families and businesses across the country — adding more pressure to weekly bills.”

Is There A Better Solution to Funding Independent & Local Journalism?

Is There A Better Solution to Funding Independent & Local Journalism?

Alex Webb, writing for Bloomberg Opinion, certainly thinks so.

Webb believes Corbyn accurately pinpointed the problem, but failed to provide a viable solution to helping out local and independent newspapers.

He does not believe ramping up funding for BBC or taxing digital companies would actually help these fledgling media companies.

Webb writes: “There are far better ways to fix the funding of regional journalism. Regulators could start by compelling the digital giants to share more ad revenue with content creators.”

“Take Facebook, for instance. Your feed is typically peppered with news stories, and while you might digest a headline and preview, you’re unlikely to click on the story itself. Yet Facebook still takes all of the revenue for the ads displayed alongside the story — the company profits from the content which someone else has created, while the content creator doesn’t. Forcing Facebook to share that revenue with publishers would be an important move to give local journalism more sustainable income. The same goes for Google’s news platform,” he added.

Webb concludes, “Corbyn is correct in identifying the problem. But strengthening the BBC is not the solution. A keener focus on how Google and Facebook monetize other organizations’ content would be a smarter approach.”

Furthermore, David Sillito, a media and arts journalist for the BBC, suggests that Corbyn’s proposal might raise other difficult issues for the government.

Sillito writes, “Extra cash would make a big difference but offering tax breaks and subsidies to ‘public interest journalism’ brings the challenge of a government deciding what sort of journalism is in the ‘public interest.’”

Do you think taxing tech companies and ISPs to boost independent journalism is a wise idea? Or are there better ways of approaching this problem?

Let us know below!