We have a minister for racing, and for space. It’s utterly indefensible that we don’t have one in sole charge of dealing with large technology platforms.
When you start looking, it’s all you see. Just last week, the Commerce Commission announced criminal charges against One NZ for advertisements around its mobile coverage that were somewhat misleading at worst. Yet Facebook’s latest wave of scam advertisements, around fake business closures, only attracted a stern word from Netsafe. Just another week. Not special, only the most recent we have in the books.
We’re running two business sectors – one taxed, tamed, scrutinised and regulated. The other a complete wild west, where actions that would be unimaginable in any other context are routine, shrugged at – accepted as part of our operating environment. I’m talking about what remains of the competitive portion of the real-world business sector in New Zealand. And about large technology platforms that increasingly own and operate our digital life and economy.
Today we published a cover story I’ve written about what happens where those two sectors meet. It’s about banking, one of the most highly scrutinised and regulated parts of our economy, and social media, which remains completely unimagined by our laws. Over the past year Lane Nichols of the NZ Herald has built an incredible, wrenching portfolio of stories that detail what happens when those two sectors meet. Dylan Reeve wrote for The Spinoff showing just how indifferent Facebook is to anyone trying to report clear and obvious scams – they just aren’t even trying.
On one side you have active criminal organisations using Facebook’s sophisticated advertising tools to target vulnerable New Zealanders and steal their money, sometimes their life savings. On the other you have large financial organisations grappling with the end result. No one is saying banks are blameless in all this. But it feels incredibly instructive that Facebook has faced a tiny fragment of the scrutiny that banks have had – and none of the financial penalties or direct demands for investment into solving it.
Andrew Bayly is minister of commerce and consumer affairs, and has been assigned the role of dealing with the scam industry. He has spent much of the year upbraiding banks for their role in the situation, which sees an estimated $200m a year stolen from New Zealanders. But as for social media, his tone is very different, almost deferential.
“We want to make sure that they are a part of the mix,” he told me. “The unfortunate thing is, [Meta is] obviously a global company, and New Zealand’s a very small part of that pie… The issue with the social media platforms is, how do you get them to engage and concern themselves about New Zealand?”
Honestly, I liked him. He’s a personable, intelligent, engaging guy – but he flips to sound like a total supplicant when talking about Facebook. This is a company that has been running scam ads for as long as it’s been running ads, but that is spending more on stock buybacks and building the unwanted, unloved metaverse each year than it has spent on fraud prevention in a decade.
For National, which claims to be the party of business and private enterprise, it’s painful watching it desperately hump the leg of any large technology player that shows up with a press release. A few weeks ago Judith Collins hosted “a fun and social evening of fine cocktails, delicious canapés and deep insight from Google… exploring Google’s transformative impact across New Zealand and how AI can be the next wave of growth for our economy and improve citizen outcomes”. An unregulated company that ships $1bn overseas to low-tax jurisdictions, pitching to be our guide into the AI future. Won’t someone, somewhere in government try and figure out the revenue implications of this?
To be fair, these heart eyes at big tech are hardly unique to National. While prime minister, Jacinda Ardern met Amazon around a $7.5bn data centre investment that still hasn’t started years later, and largely existed to chase our renewable energy mix, even though the extra demand will naturally increase the volume of coal we burn.
When Facebook livestreamed an atrocity, then ducked the Christchurch Call in response, we did essentially nothing. It just illustrates the extent to which government acts both completely powerless and vaguely starstruck around large technology companies, while making no attempt to deal with the externalities that result from their presence in our society and economy.
It’s true that this is a phenomenally complex area. Big technology players have become totally entwined in our lives, and create amazing products that are vital to the way we live now. But we are now almost alone as a country in the enfeebled scale of our legislative response to their presence here. The sole substantial piece of legislation is the Fair Digital News Bargaining Bill, which has taken so long to progress that it now seems to likely have been overtaken by events.
Look around the world and it’s a very different story. The EU levies massive fines against them for tax avoidance and has pressured Meta into reduced ad targeting and ad-free versions of Facebook and Instagram. Australia is banning social media for under 16s, is thinking seriously about curbs to misinformation and is contemplating local content quotas for international streaming players. Malaysia is demanding social platforms operate under licences that are contingent on them truly addressing cyber bullying and scams. Singapore is demanding that social networks curb the spread of harmful content.
Not all of these will work. Some will fail. And Bayly is not wrong when he says that New Zealand is somewhat limited due to our scale – though we have the same population as Singapore, which is both the host to big tech’s regional headquarters and leading the charge on legislation.
Regardless, we are embarrassingly late and light on legislation. It’s unserious to pretend that the biggest problem in scams is banks, not Facebook. The government should be demanding action under threat of huge fines (or prosecution – maybe when the Commerce Commission is done with One NZ), rather than meekly hoping they might come to a meeting. Otherwise, are we even a sovereign state any more?
In the scams story there’s a passage that I can’t stop thinking about in the context of all this: “A few years ago I asked then broadcasting minister Willie Jackson who he thought was responsible for the social giants. ‘I guess it’s me,’ he replied. Last week I asked DPMC, the all-powerful group that sits behind the prime minister and Cabinet. They told me it was internal affairs minister and Act deputy leader Brooke van Velden. I requested an interview, only to be told that ‘after discussions here, we’ve realised this is one for the minister of commerce and consumer affairs, Hon Andrew Bayly’.”
That is precisely the problem. We don’t have a minister where the buck stops. We have ministers for all kinds of things – for racing, for space – but none for the large technology platforms that govern our digital lives. Oversight is platooned across internal affairs, communications and media, digitising government, revenue, consumer affairs and commerce and likely more besides. Paul Goldsmith is probably the most in charge, and a very cerebral guy – but social media feels like the least important part of his least significant portfolio, which says it all.
This is to the distinct advantage of the tech companies, who lean into the complexity and benefit from our institutional paralysis. But we, as a country, are losing here. It’s long overdue to have a single minister in charge of large technology platforms. One single source of power and responsibility for the tiny handful of global platforms that oversee the whole of the digital economy and internet itself. There is no single person to stare them down, formulate legislation and demand they contribute meaningfully to our society. We need a minister for big tech, and we need one now.