Executive Summary

The Australian eSafety Commissioner’s social media age restriction scheme comes into effect next month. The scheme has generated significant controversy, and is a world first that will be keenly watched for lessons about the future of social media regulation.

The debate over social media regulation is just a part of a wider debate about the impact and limits of new technology. Social media is an established phenomenon, but newer AI technology will have even larger social and economic effects. 

Major technological changes in the past have always generated winners and losers. The winners argue that ‘you can’t stop progress’, while characterising any mitigation of the impacts as unjustified interference in a natural process. In the case of social media, libertarian claims that are foreign to our common law tradition are deployed against regulation. In the case of AI, we are admonished that any restrictions will reduce economic growth, and even threaten national security.

But technology is, by definition, never natural. It emerges from choices made. Alternative ways of governing speech, growing the economy, and defending the national interest are always possible. Governments, in particular, have a responsibility to ensure that technology is developed and applied in a manner that serves the interests of all, not just the ‘winners’. The eSafety Commission is one of the mitigations that the Australian Government is pursuing. 

It is an essential role of governments to domesticate this kind of capitalism to protect economic opportunity and social stability. To this end, governments have both a right and a duty to act.

Resistance to global tech is growing

The emergence of the Internet as a mass phenomenon in the 1990s continues to have profound impacts. The rise of social media in the noughties was parallel by the growth of cloud computing which has penetrated every nook and cranny of our economy and society. The mass adoption of AI has added to the momentum of economic and social disruption, while new biotechnologies loom ahead. 

At the same time, resistance is growing, especially in the global tech epicentre: the United States. We have remarked before that the Trump coalition that currently dominates the US policy establishment is made up of three disparate strands: accelerationist “tech bros” who are boosters of technology and its potential; economic nationalists who fear the rise of China; and social conservatives. (See our report “Breaking the Consensus – media futures in a fractured world”.) 

Of the three, social conservatives are the weakest, but this strand has scored some remarkable wins over the “tech bros” in recent years. Most significantly, a proposed ten-year moratorium on state AI regulation was defeated. And in a recent decision, the Supreme Court ruled in favour of age verification for pornography, overturning long-standing precedent (and effectively recognising that easy Internet access has significantly changed the landscape).

This reaction against the negative effects of technology is similar to the movements that arose from industrialisation in Europe in the 1800s. The effect of these movements was not to prevent technological change, but to ensure that its worst effects were mitigated. New regulation and social arrangements emerged to accomplish this mitigation – health and safety regulation, labour unions, publicly-funded education. The worst negatives of change were eliminated, and the benefits were more widely distributed.

The “tech bro” defenders of the status quo (i.e. an effectively unregulated global platform industry) present this state of affairs as natural and neutral. But technology is, by definition, never natural or neutral. It emerges from choices made, and that means that alternative ways of governing speech, growing the economy, and defending the national interest are always possible. 

This reaction against the negative effects of technology is just as “natural” as the technological change that triggers it. And the myth of “neutral” technology was busted by the obvious costs generated by social media – childhood anxiety, and the surge of mis- and disinformation. The coalition of groups that are winning court cases in the United States honed their skills in campaigns against online pornography and childhood social media/ smartphone use where harms are increasingly documented, and are now targeting abuses of AI.

The “tech bro” faction (Silicon Valley essentially) are punching back. Resistance to US-based “big tech” is being coded as luddite or even pro-China. In August, the Wall Street Journal reported that Silicon Valley firms plan to pour US$100m into a network of campaign organisations to oppose AI regulation ahead of next year’s midterm elections. However, this move just highlights the fact that Silicon Valley is feeling the pressure of a growing campaign to rein in its excesses.

We have already documented the impact of the global technology platforms on countries like Australia and New Zealand, particularly the extractive model of operation that they have perfected – an oligopolistic market dominated by Google, Amazon, Apple, Meta, Netflix and Microsoft that has hollowed out the local media market, threatens to do the same to telecommunications, and minimises its tax contributions to local economies. (See, for example,  our report “Global Tech Giants and Tax Avoidance in Australia”.) 

This poor corporate behaviour includes a stubborn obstructiveness towards Government regulations, for example the Australian Government’s attempts to require compensation for news publishers for the re-use of news content in search and social media.

However, there are encouraging signs of resistance to this oligopoly in Australia too. The recent attempt to weaken copyright laws to allow global platforms easier access to Australian content collapsed under a barrage of criticism. (See our report “Submission on the Interim Report of the Harnessing data and digital technology inquiry – Promoting microeconomic reform for a sustainable AI ecosystem”.) The fact that much content is still used for LLM training in violation of copyright law, however, illustrates the problem we still have.

The eSafety Commission’s legitimate role

The eSafety Commission plays a role in this resistance. We have argued for some time that the regulation of social media is needed to relieve its ill effects. Social media looks increasingly like smoking did in the 1970s, when awareness of bad effects was growing, governments were limiting smoking advertising, and tobacco companies were still arguing that the effects were not proven. 

And like the tobacco industry, social media has defenders who argue that the effects are exaggerated, and that restrictions would do more harm than good. These efforts often appeal to extreme libertarian arguments on freedom of speech, which have their origins in the United States. But these arguments have no parallel in our own legal tradition which historically viewed speech through a lens of proportionality, balancing the individual’s right to speak against the community’s right to order and welfare. 

The eSafety Commission is firmly in this tradition. Where speech – online or not – threatens civil order and/or erodes community welfare, governments must act.

This is not to endorse the Commission’s every decision. In fact, the Commission has over-reached itself several times in recent years, suffering losses in the courts and administrative tribunals. The micro-management of content is a lose-lose proposition for any regulator, as we have warned. Successful censorship simply attracts criticism on free speech grounds, while failure undermines confidence. (See our 2023 report “Mis/disinformation regulation – benefits, risks, and one big gap”.)

The Commission is on stronger ground when it acts within a framework designed to structurally mitigate harm. The social media age restriction scheme is a clear example, and involved both Government and Parliament our last week’s explainer “Australia’s Social Media Minimum Age Scheme”). This changes the game in a way that a few removal notices cannot. 

And there is more that could be done. Although it did not pass Parliament, the Government’s 2023 Combatting Misinformation and Disinformation Bill had valuable elements:

• powers for the ACMA to require information from platforms, creating more transparency about social media algorithms. 
• powers for ACMA to impose industry codes and mandatory standards on platform providers to modify platform moderation policies. 

There is a risk that codes of practice that control platform policies (rather than the content itself), could still constrain freedom of speech. But this risk needs to be evaluated against the real counterfactual: the current freedom of the platforms to mould public debate without accountability or even transparency. And there is nothing to suggest that social media platforms have Australia’s interests at heart, so their freedom is a threat.

Why this matters – the right and the duty to act

The strength of Australia’s common law heritage is that it eschews both extreme libertarianism and oppressive authoritarianism towards speech. We are neither the United States nor China. Rather than a winner-takes-all market, we can manage a negotiation between technology accelerationists and those who criticise them. For our own sake, it is important we retain this identity, and not allow ourselves to slide into either extreme. 

This requires that governments play a stabilising role, promoting the benefits of new technology while blocking its negative effects. Institutions like the eSafety Commission are a necessary part of that role. And they are by no means the only response. Civil society also has a powerful role to play, as the emergence of responses like “screenless schools” is showing. Platform companies fear consumer backlash even more than regulatory intervention.

The freedom we need most to preserve is the freedom to choose our own path – and whatever the technology determinists might say, we can and should manage the trajectory of technological change to maximise community welfare. The global platform economy will not go away, so we will need statesmanlike astuteness (and perhaps cunning) to mould it to promote the best while mitigating the worst. To this end, governments have both a right and a duty to act.

About Venture Insights

Venture Insights is an independent company providing research services to companies across the media, telco and tech sectors in Australia, New Zealand, and Europe.

For more information go to ventureinsights.com.au or contact us at contact@ventureinsights.com.au.