Document referenced — Brislen, P. (2019, March 25). Christchurch mosque attacks: How to regulate social media. Retrieved March 25, 2019, from Radio New Zealand website:

The views that I express are my own and most certainly do not represent those of my current employer of record let alone any companies I may be affiliated with either through equity ownership stakes or other connections. This is not to be considered a definitive expression of any positions I may take in equity markets.

I encourage reading the most recent opinion piece by Paul Brislen. In light of the recent incident in Christchurch, a wide variety of suggestions were made by that particular tech commentator about how to regulate social media. For so long as there are acronyms like GAFA (Google, Amazon, Facebook, and Apple) & FAANG (Facebook, Apple, Amazon, Netflix and Google), we have the distinct problem of private companies rooted in the United States of America controlling significant portions of Internet infrastructure.

Five distinct proposals were put forward in the piece as to bringing tech companies to heel. One part of the Christchurch shooting incident that shocked many was that it was broadcast on Facebook Live. The best summaries I could make of the proposals were:

  • Remove the safe harbor under NZ’s Harmful Digital Communications Act relative to user generated content. A similar one is Section 230 of the Communications Decency Act of 1996 in the USA.
  • Institute New Zealand-based content monitoring by New Zealanders against standards rather than having monitoring in the USA to cover content for the world.
  • Live video feeds to be moderated and reviewed with humans able to kill feeds without notice.
  • Imposition potentially of personal liability to senior leaders of companies when an incident occurs
  • Impose taxes on turnover on revenue generated domestically in New Zealand

Now, there are many problems with this. Mr. Brislen noted in the piece that hopefully New Zealand wouldn’t have to act unilaterally lest the relevant companies pack up to set up shop elsewhere. It seems that there is a push for New Zealand to lead in creating a multilateral regime to regulate and tax US-based Internet companies.

It must be remembered that these are private enterprises. They’re not public utilities. The services they provide involve two parties to make it work. When a company, often based in California, hears from a nation-state that has a population less than half the size of the population of Los Angeles County in California questions get raised about the new barriers to operation raised.

As it stands now, multiple websites in the United States have begun geoblocking European users because they’ve gotten to the point that operators simply cannot figure out GDPR to be able to comply with it. In terms of cost benefits analysis, many domestic-focused websites block EU-based users because the cost to comply with GDPR exceeds the potential revenue from serving that user. Many news sites in the USA have gotten to that point and it frustrates me trying to share news stories in the Ubuntu Podcast channel on Telegram.

For all those measures proposed in that referenced opinion piece, rather significant costs would be incurred to continue doing business in a relatively small market. It is not a valid assumption that Facebook or any other US-based tech company will choose to always do business in New Zealand or anywhere else for that matter. If the cost benefits analysis comes out to it being far cheaper to just abandon that market and block all users from that country, what might a company do? Regulatory Complexity and Regulatory Uncertainty are still valid concepts that drive business decision-making especially if compliance would make your business too difficult to continue to operate.

I don’t claim to know how this would turn out. In a world where Internet equates to GAFA/FAANG you have a very limited concept of Internet. Rather than folks coming from around the world to Silicon Valley to innovate, why haven’t we seen development like the prior UK government concept of the “Silicon Roundabout”? But for access to working capital why are the only competing social networks out there beyond the US limits that I can think of just Baidu and VK?

I know New Zealand is not the only country looking at taxing revenue turnover as France and the UK have both brought the matter up. The Treasury Secretary Steven Mnuchin, husband to Louise Linton for celebrity watchers out there, has generally not had nice words to say about such proposals. This, I think, is going to be a major yet unacknowledged friction point before we hit the 2020 presidential election. Time will tell how this plays out.