Internet-based Media Companies

Damian Hinds Excerpts

Wednesday 31st October 2012 Westminster Hall

[Damian Hinds (East Hampshire) (Con)]

I congratulate the hon. Member for Slough (Fiona Mactaggart) on securing this important debate and this opportunity to discuss the issues. I also pay tribute to my hon. Friend the Member for Devizes (Claire Perry) for the campaign she has brought to Parliament.

I want to comment—briefly, you will be relieved to hear, Mr Owen—on one aspect of the subject: search returns. The debate opened with the hon. Member for Slough raising the issue of definitions, and making the point that the term “internet company” is no longer appropriate. The term “search engine” is not really any longer totally appropriate either. The companies in question are advertising companies. There is nothing wrong with advertising companies and agencies; we have had them for years. The challenge for public policy in this place is that that is not how people think of them. They tend to think of the giants of the web—essentially Google, Facebook and Twitter—more as utilities than advertisers or advertising media companies.

People who work in the industry like to say, “You just don’t get it. The thing is, on the internet, people are, like, looking for stuff, and we, like, help them, like, find it.” Of course, that is true, but it is tempered by commercial considerations. It is also true that in some cases they “help you, like, find stuff” that you did not actually “like, know you were, like, looking for,” through contextual and behavioural targeting. Again, there is not necessarily anything wrong with that as an advertising media technique, but it creates another challenge, which is that most people, including most public policy makers, do not understand how it works.

It might be worth reiterating briefly how search engines make money. Essentially they do it through paid placements, according to the formula PPC x CTR, which is the pay-per-click bid times the click-through rate. Of course, that applies only to a relatively limited number of search returns—usually a couple at the top of the page and some down the side. However, the number varies over time. A comparison between Google.com in the United States and Google.co.uk in this country shows that variation. Commercially, search engines have the potential to make the market work better, and therefore contribute to economic growth; but they can also add cost. That is relevant to the debate. They add it in two ways: first, through the competitive bidding, because that PPC x CTR formula contains natural in-built inflation. Secondly, in certain sectors, for a mathematical reason with which I will not detain or bore Westminster Hall today, second-tier intermediaries can be created. That is to do with—well, I had better stop there, but believe me, it happened. It happened, for example, in the travel industry in a big way.

The point for corporate social responsibility is that those same pressures also apply in areas that go far beyond the purely commercial sphere. In a good way, search engines and other players on the internet can help people in their quest to get help, but the counter-pressure also applies, which is that where money and a commercial motivation are involved, the effect can be the opposite. It can become harder for people to find the help they need.

The area that I am concerned about is debt. When it comes to chronic personal debt, the normal rules of supply and demand tend not to apply. People regularly take out loans that are not the cheapest to which they could have access, and which they cannot afford to pay back. Similarly, for people seeking help—which could be through debt consolidation, a debt management plan or just straightforward advice—the routes they end up on are often, unfortunately, not the ones that are best for them, but the first that they encounter at the point when they think they need to do something different. These days, of course, a key place to go—the first place to go, for many people—would be an online search.

The internet has improved somewhat in this regard in recent years. When people enter search terms to look for help with debt, it seems more likely now than it was even a year or two ago that the top half of the screen will show appropriate, sensible, responsible providers who can help. I do not know what is driving that. I hope that it is a commitment on the part of search engines to improve, and to make sure that people can get access to that information. The issue has been brought up in the past in this place, and I hope that some of the message has got through. However, we must be conscious that however good or bad things may be today—and they are not perfect; the first two results that come up will still be for debt management companies—there is no guarantee of their staying that way. The arena is constantly changing. Technology is constantly changing. The algorithms that drive the ads that get driven to different people are constantly becoming more sophisticated.

I would like a clear, public and ongoing commitment from the providers of search on the internet that, in relation to debt, they will both elevate and clearly mark out providers such as Citizens Advice and the Consumer Credit Counselling Service, which offer a responsible service. That approach could be extended easily to other areas where people find they are in difficulty. I do not think that we need legislation to do that, but the Government can have a role in exhorting providers to do it.

[Kevin Brennan (Cardiff West) (Lab)]

I, too, congratulate my hon. Friend the Member for Slough (Fiona Mactaggart) on securing the debate, and other hon. Members who have spoken. I have a lot of sympathy with some of the points made by the hon. Member for Devizes (Claire Perry) and hope that she is successful in persuading the Government to take action. I also agree with many of the points about advertising made by the hon. Member for East Hampshire (Damian Hinds), and with those made by my hon. Friends. My hon. Friend the Member for Glasgow South (Mr Harris), who made several interventions, has a point, with regard to our being clear about free speech, and being clear that we should always, whatever our view of something posted on the internet, condemn violence, which is never justified and certainly was not justified in the cases that we have heard about.

When I was a Minister in the Department for Children, Schools and Families in the previous Government, we took forward the Tanya Byron review on internet safety for children, which was mentioned by the hon. Member for Devizes. That was an interesting experience. I commend that report to hon. Members, because it is still relevant, even though it is a few years old. At the time, my daughter, who has just started university, was a teenager, and I thought that, as the Minister responsible, I had better look a bit closer at what she was doing online. She had been making videos and putting them on YouTube. I asked her, “Why do you do that?” She said, “I’ve got to think of my followers.” I asked what she meant and she said, “I need to be sure that my fans are getting some good videos.” I had a look, and one of the videos that she made had more than 100,000 views on YouTube. One comment underneath a video—these were Harry Potter fan videos—said, “How old are you?” She replied, “It’s not my policy to reveal my age.” That made me think, during the Tanya Byron review, that having built a swimming pool, the most important thing is not to put up a sign saying, “Danger! Deep end”, but to teach people to swim, and to have the resources to understand the medium they are dealing with, including who is at the other end of an online comment. By and large, although they can be vulnerable, children are quite savvy and intelligent. That proper level of education about the dangers on the internet is the first and strongest protection we can give, before starting to talk about what the Government can do in relation to regulation.

As several hon. Members have said in relation to responsibility, this is relatively new. The internet has emerged as the hugest, most important technological change in the past 20 years, and has changed our lives in a transformational way. It started as a wild west area, but the observations made by the hon. Member for East Hampshire are important and pertinent here, because this is essentially, overwhelmingly, a tool for carrying advertising. In relation to some of the irresponsible things that we see online, including on social media sites such as Facebook and Twitter, what drives those platforms’ existence, ultimately, is advertising. People advertising on websites are, by and large, companies—often large companies—with corporate social responsibility statements that would not tolerate their brand being associated with some of the things on the internet that we have heard about today, including the activity of trolls, child pornography, and so on.

Turning to public policy, we should hold the advertisers to account, as well as the people who provide the platform, to ensure that we are naming and shaming, and showing companies that purport to be socially responsible corporations where their advertising is appearing, and what it is appearing next to, from time to time. Ultimately, that commercial pressure will force, and is forcing, greater responsibility on to some of the newer companies, such as Facebook, which have only existed for a small number of years. That is important.

In Westminster Hall not so long ago, we debated the way that search engines, because of the algorithms that the hon. Member for East Hampshire mentioned, often throw up results at the top of the page that, say, encourage people to download a music track illegally before they are even offered the opportunity to purchase it legally online.

[Damian Hinds]

The hon. Gentleman makes some important points about the responsibility of advertisers. Will he acknowledge that a development on the internet that a lot of people do not understand is that an advertiser may not know where their advert will appear, because they give agency, effectively, to the search company to put it in context according to its algorithms, providing them with the greatest number of hits?