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An unholy coalition torpedoes social media reform legislation in Brazil

Mercurial Brazilian President Jair Bolsonaro, Google and Facebook are accidental allies fighting in the same trench to defeat Big Tech regulation in Brazil.

Bolsonaro maneuvered his congressional allies last month and managed to put brakes on an omnibus bill that would establish moderation and transparency requirements for the internet platforms and payment for news content.

There isn’t much hope among legislators that they can vote on the regulation, called PL 2630 or Fake News Bill, before the presidential elections Oct. 2.

That way, Bolsonaro will likely head into the 2022 presidential campaign without any risk of restrictions on Telegram, WhatsApp and the social media platforms he uses to spread the Brazilian version of “Stop the Steal.”

The decision to postpone debate on the bill was a huge victory for Google and Facebook’s aggressive lobbying efforts against the payment for news content and transparency requirements for ad targeting and content moderation.

For three days, Google featured on its Brazilian homepage, right below the search box, links like: “Know how the PL 2360 could force Google to fund fake news.” 97% of all web searches in Brazil are made on Google, according to Statista.

(Courtesy: Patrícia Campos Mello)

The platform also ran full-page ads in the leading Brazilian daily newspapers saying the bill would lead to misinformation. It pushed for people to put pressure on their legislators on social media.

On Meta’s Instagram, ads placed by Google said: “See how this can harm you – a legislative bill can make it harder to find relevant news. PL 2630 will impact your internet.”

“They abused their market dominance and spread disinformation to avoid regulation,” Brazilian Rep. Orlando Silva, a sponsor of the bill, told me.

Google also sent emails to small business owners saying, “Hello, advertiser. Bill 2630 can harm small and big businesses and diminish their ability to promote online products and services. … If the bill is approved in its current form, thousands of small and medium businesses in Brazil will face difficulties increasing their sales with the help of online advertising.” The email also had a link — “see how the bill 2630 can impact your business.”

Facebook ran full-page ads in the main media outlets, saying, “The fake news bill should fight fake news. It should not fight the diner in your neighborhood.”

Before that, Google, Facebook, Twitter and Mercado Livre, an e-commerce website, published a public letter saying the bill “is a potential threat against a free, democratic and open internet.”

“Internet platforms’ lobby has been extremely dishonest. They are producing disinformation about the legislation to convince legislators and users that it would be the end of the internet as we know it,” said Bia Barbosa, a civil society representative at the Brazilian Internet Steering Committee and a member of the “Direitos na Rede” coalition, which includes several civil society organizations that advocate for privacy, regulation and transparency.

“I doubt that the internet platforms use these sordid lobby tactics in countries in the EU,” she added. “In Brazil, they think they can simply use disinformation to get rid of regulation.”

Google and Facebook contend that they want to have more debate on the legislation and are discussing aspects of the law they find problematic.

“We want to bring to light aspects of the legislation that were not being discussed and could have unwanted consequences not only for the platforms but for all the internet users,” said Marcelo Lacerda, Google’s government affairs and public policy director in Brazil.

Meta said through a spokesperson in Brazil, “We are willing to partner with Congress to work on legislation to fight disinformation. However, our technical analyses indicated that PL 2630 needs improvement in some aspects that can have unwanted consequences.”

The Brazilian president and his allies are often at odds with Big Tech, especially when platforms resort to content moderation to fight misinformation. YouTube and Facebook have removed or labeled several of Bolsonaro’s videos with false information about COVID-19 or unfounded allegations about election fraud. WhatsApp did not give in to pressures from Bolsonaro to launch a “communities” feature, which would allow groups with thousands of members, before the Brazilian election. (These huge encrypted groups would have allowed Bolsonaro to turbocharge his WhatsApp communication strategy, which helped him win in 2018.)

But regarding regulation, Bolsonaro and Big Tech interests are perfectly aligned. Bolsonaristas are even taking advantage of the platforms’ investment to defeat the bill.

Two weeks ago, Bolsonaro shared a public letter from Google Brazil president Fábio Coelho in a WhatsApp group. The letter attacked the “fake news” bill. In his message to the group — which includes his close allies, personal friends and cabinet members — Bolsonaro said that the bill would bring “censorship and revoke the freedom of speech” in Brazil. The message was first reported by Crusoe magazine.

Consultant Guilherme Ravache, a columnist at UOL, a leading internet portal in Brazil, and a mentor at Meta Journalism Project, published an article with the headline: “Fake news bill can give Globo more than 230 million reais (Brazilian currency) a year” that was widely shared online. Globo, the largest media conglomerate in Brazil, is the leading advocate for the news content compensation clause. It is also Bolsonaro’s nemesis.

“One of the bill’s most controversial aspects is forcing Google and Facebook to pay for journalistic content (in Brazil). That, per se, is not a problem. Both internet platforms already invest millions of dollars in journalism and say they do not oppose paying,” the article states. According to Ravache, mainly big media conglomerates like Globo would benefit from the bill in Brazil — and he said that many small outlets were left out in Australia’s content payment code, which was the inspiration for the Brazilian legislation.

Asked where he got the figure 230 million reais for news payment for Globo, Ravache pointed to a Columbia Journalism Review article that said the tech companies agreed to pay Rupert Murdoch’s News Corp. Australia $70 million AUD (about $50 million U.S.) as part of a larger arrangement that includes advertising and other business. He just converted the figure to reais, saying that he considered the size of Globo and the size of the Brazilian population.

Sen. Flávio Bolsonaro, one of president Bolsonaro’s sons, picked up that “estimate” and shared it on Facebook.

“The Fake News bill will bring censorship to the internet and hide governmental information. Estimates point out that Globo will earn R$ 230 million a year because of the bill,” he wrote. “Do you know what’s going to happen with you, fellow Christian, if the bill is approved and you disagree with opinions in the media? You might go to jail for alleged ‘hate speech.’”

Globo has also been lobbying aggressively, defending the legislation in its TV shows, newspapers and online media. The bill even has provisions that would benefit the conglomerate directly, such as specific guarantees for outlets in the same media group to bargain with platforms collectively and restrictions on advertising that would directly affect the tech platforms. Despite pressure, legislators have not included the possibility of a tax on Big Tech and a media fund, which could benefit smaller media outlets.

Globo is a frequent target of Bolsonaro’s ire. The Brazilian president constantly attacks the media conglomerate, which he calls “fake news,” and threatens not to renew its license if he is reelected. In addition, Globo’s government license expires in April 2023. In Brazil, network TV channels belong to the government, which licenses them to media companies through bids. The licenses are temporary and need to be renewed.

Independent media outlets fearful of losing their funding also opposed the bill. Ajor, the association of digital journalism, published a letter pointing to the lack of transparency in the deals closed between media outlets and the platforms in Australia. It also mentions the refusal by tech companies to negotiate with some small outlets.

The Australian media bargaining code, enacted in February last year, is the inspiration for the Brazilian legislation that was killed by Bolsonaro and Big Tech.

The Australian law allows media outlets to bargain with Google and Facebook for payment for the use of news content. In Australia, news organizations have managed to negotiate deals worth more than $200 million (approximately $150 million U.S.) since the code went into effect. The government estimates that Google closed 20 deals and Meta closed 14.

Just last week, Reuters reported that Google has agreed to content compensation with 300 European publishers. Canada and the United Kingdom are discussing news payment codes similar to Australia’s. In Brazil, “everybody is lobbying aggressively; there are no angels in this game,” said Ravache, who advocates for an independent media fund to finance journalism.

Marcelo Rech, president of the Brazilian Newspaper Association, dismisses criticism that the bill would mainly benefit Globo. The association is part of a coalition that includes large media companies, including Globo.

Google and Facebook say they are leading supporters of journalism.

“We firmly understand the importance of quality journalism in the fight against disinformation; that’s why we need more debate on the law,” says Lacerda, Google’s government affairs and public policy director in Brazil. “In Brazil, Google has numerous initiatives to support the journalism ecosystem. Media outlets (get) two billion clicks monthly through Google news search for free. From 2019 to 2021, Google paid more than R$1 billion to Brazil’s 10 largest media organizations through our Google advertising platforms. All that has to be taken into account.”

A Meta spokesperson said, “Media outlets can increase their audience, look for more subscribers, and expand their ad revenues when they have a presence on social media. The media outlets decide if and when they publish on Facebook and Instagram.”

Brazilian researchers and journalists criticized what they see as serious flaws in the bill. To convince politicians to support it, legislators included an immunity clause in the law that would make it impossible for internet platforms to moderate content posted by representatives and senators, the two types of legislators who make up the Congress. The clause is viewed as a “Trump vaccine,” as it would make it harder for internet platforms to ban politicians during this year’s electoral campaign, even if they violate social media’s election integrity standards.

The criteria establishing who would be considered a media outlet and, therefore, who would be entitled to receive payment from internet platforms for news content are indeed vague — and they could enable junk news sites and extremist bloggers and YouTubers to get funding.

“There is no data anywhere in the world that proves that the existence of law leads to the reduction of misinformation. Furthermore, PL 2630 errs in dedicating only a single paragraph to education, protecting politicians in office, and creating financial aid that seems to be exclusive to the major media,” said Cristina Tardáguila, founder of Lupa, the leading fact-checking newswire service in Brazil.

But some aspects of the bill are viewed by disinformation researchers as long overdue. The law would obligate social media platforms to disclose details about their content moderation teams — how many people they hire, what is their mother language and nationality, and how much they invest in artificial intelligence in Portuguese. As of now, all of that is a secret. Whistleblowers have pointed out that, in non-English speaking countries, there are often an insufficient number of moderators who speak the language.

The legislation has transparency requirements for anti-misinformation measures. Internet platforms would have to disclose not only the number of misinformative posts removed or labeled, but also the reach of the misleading publications before action was taken.

It would also establish that internet users would be entitled to see a track record of ads and promoted content, with information about the targeting criteria used. The platforms oppose these transparency requirements, saying they would make the platforms vulnerable to bad actors and violate privacy and trade secrets.

In a country that became a symbol of WhatsApp abuse and rampant disinformation, Brazil’s bill bans automated mass messaging and prevents forwarding messages to several people, which fuel viral disinformation. This is one of the main reasons Bolsonaro opposes it. He has said the attempts to regulate Telegram are “cowardly.”

“We know the bill has problematic clauses, but we should not kill the bill. We should negotiate to improve it,” said Bia Barbosa, a civil society representative at the Brazilian Internet Steering Committee.

Brazil is heading into new presidential elections in October without any legislation requiring the internet platforms to implement transparency measures and state clear moderation policies. The tech companies are doing little to prevent a Brazilian insurrection from happening in a much less stable democracy than America’s.

“We risk having an electoral process similar to the 2018 presidential elections. We will depend solely on the platforms’ self-regulation, which is obviously insufficient. We saw the magnitude of disinformation and political violence in 2018,” Barbosa said.

An unholy coalition torpedoes social media reform legislation in Brazil