Home >Opinion >Columns >Opinion | A free market alone won’t help rid India of fake news
 (Reuters )
(Reuters )

Opinion | A free market alone won’t help rid India of fake news

Some regulation to check fake news is necessary, despite the risks of regulatory capture

One of the earliest responses of the Sri Lankan government to the terrorist attack on Easter Sunday was to clamp down on social media. Facebook, WhatsApp, Instagram (the latter two also owned by Facebook) and some other services were blocked. The country’s minister for mass media and state minister for defence Ruwan Wijewardene appealed to the media not to publicize the names of the attackers and give extremists a chance to exploit the situation. This oxygen of publicity was also firmly denied to the Christchurch terrorist by the prime minister of New Zealand, who chose to never mention his name in any of her speeches.

The suppression of social media presumably helps prevent the spread of fake news, rumours and hate speech. In some ways, the temporary clampdown on social media is similar to a physical curfew imposed by the Sri Lankan government. A curfew is a ban on the assembly of more than, say, a dozen people in one place, and blocking social media services is like banning a virtual assembly. Opponents of such internet bans say that they hurt the weaker and more vulnerable sections, since their dependence on social media for crucial updates is far greater than that of the elites and well-off sections.

Shutting down internet access is a supply-side attempt to curb panic, rumours and hate speech. But it surely has negative economic costs, in terms of a shutdown of legitimate e-commerce. It hurts businesses and services that depend on digital connectivity. India had the dubious distinction of being the world’s leader in internet shutdowns last year, according to Software Freedom Law Center. India has more users of WhatsApp than the US, and is also among Facebook’s top three markets globally by subscriber count.

With near zero data pricing in India, internet usage has zoomed. Yet, these services have been in the cross-hairs of authorities in many countries for their role as enablers of the spread of rumours and hate speech. Recently, before the national elections, the government of India instructed all social media companies to take measures to detect and prevent misuse. The onus has thus been put on internet companies, which often claim that they are merely platforms, and not content creators, nor censors. Not being subject to broadcast licensing, like conventional media firms, they are currently not legally liable for what passes through them, although the law is changing.

Free market champions and libertarians, especially, are very uncomfortable with internet bans. Is there a market solution to the fake news pollution? Shouldn’t there be caveat emptor—consumer beware—when it comes to the consumption of fake or non-fake news?

In the recent past, more than a dozen fact-checking services have sprung up in India, including some sponsored by mainstream media. This could be seen as a “free market" response. Facebook too is apparently toying with the idea of introducing a button for “fake news" (along with “like"). This would be an inbuilt countervailing force, it believes.

Many social media companies have also enhanced the human surveillance of their platforms and customer support to detect and deal with fake news. It is possible that fake news and hate speech have limited longevity, but even a brief life span can cause severe harm, as is evident from many anecdotes on mob lynching or the suspicion of elections and referendums being hacked. As in financial markets, where irrationality can prevail longer than investor solvency, so also on social media, fake news can travel long enough to do lasting damage. If financial markets are prone to herd behaviour, it is even more true of social media. How does one then regulate their functioning?

Even before the onset of social media, there has been a debate on what is a sustainable business model for news. The free press is the fourth pillar of democracy, but is subject to only self regulation and the discipline of market forces. Private ownership is not supposed to influence or taint the content of what is published as news. But hyper-competition, cut-throat pricing, a threat from low-cost online news and declining subscription revenues have meant that dependence on advertising has increased disproportionately. It follows that this business becomes vulnerable to the syndrome of “who pays the piper calls the tune", which could dilute the quality of content and veracity of news.

This phenomenon is worse on social media, where entry barriers are very low and every user and blogger is a potential broadcaster. Of course, diehard free marketeers will say that high-quality stuff will distinguish itself and the discerning customer ready to pay for it will sort the market out. Even then, we need the presence of non-profit ventures like the BBC, PBS or National Public Radio to effectively serve as “regulators" by setting quality benchmarks, for the rest of the industry, though they too are vulnerable.

We cannot rely on market competition alone to provide a durable response to the need for factual accuracy. Just the presence of several competitors does not prevent irrational and potentially disastrous outcomes in financial markets. Emotions and irrationality get in the way. This is true of fake news and fact-checking too. To conclude, some regulation is inevitable, despite the risks of regulatory capture or inefficiency that could arise.

Ajit Ranade is an economist and a senior fellow at the Takshashila Institution.

Subscribe to newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Click here to read the Mint ePaperLivemint.com is now on Telegram. Join Livemint channel in your Telegram and stay updated

My Reads Logout