The entry of social media companies into the Latin American media market threatened the economic viability of traditional media outlets. In response, local governments drew from other countries’ legislation to create social media regulation, though the impact of these policies was limited by their lack of international political leverage. To alleviate local criticism, technology companies developed programs to support local journalism. However, these efforts have had limited impact. The situation in Latin America demonstrates that there is no one-size-fits-all solution to remedy social media’s impacts on traditional media viability.
Prior to the entry of social media companies, the Latin American media system was not without its faults. For a long time, large media groups dominated the production and distribution markets at the national level. They had close relationships with governments that, in exchange for outlets refraining from major criticism, did not interfere in their growth and economic development. Recent years have posed new challenges to media viability in the region. Since 2010, the same extreme free market conditions that supported large local media players have supported the domination of new global internet players such as Google, Amazon, Facebook, Apple, Microsoft, and Netflix. As a result, local media suffered significant drops in audience and income.
Recognizing these challenges, Latin American governments have drawn from precedents set by other countries’ legislations to create more competitive market conditions. The foundations for these new rules include the European Union’s Audiovisual Media Services Directive (2018), Copyright Directive (2019), Digital Services Act (2022), and Digital Markets Act (2022), and Australia’s News Media Bargaining Code (2021). Within Latin America, governments have put in place initiatives extending value-added tax to foreign digital service providers. They have also increased regulation on video streaming services platforms, such as content quotas and financial obligations for platforms to support and promote national audiovisual productions.
As in the Global North, some proposed legislations in Latin America have been criticized for jeopardizing human rights principles. One example of this was a 2021 bill proposed in the Mexican Senate by Senator Ricardo Monreal. The bill established a vague definition of “relevant” social networks (those with more than 1 million users) and required them to censor content such as “hate messages,” “fake news,” and content that could affect “order and public interest.” The bill did not have clear guidance on how such terms are defined. This was considered a mechanism of prior censorship by civil society organizations, as the government could have used this regulation to ban outlets it did not like.
A key difference in the Latin American story, compared to that of the Global North, is an imbalance in power between governments and technology companies. Brazil’s PL 2630 tried to establish obligations for internet intermediaries to address “systemic risks” posed by illegal content. In response, both Google and Telegram invested in intense advertising and political lobbying campaigns against this initiative and were accused by local politicians of interfering in the country’s democratic discourse. As technology companies have disproportionately more resources and power, local politicians lack tools necessary to regulate or penalize them.
To alleviate local criticism, technology companies have created funds to support local journalism. However, investments so far have been inadequate to financially compensate for local news’s loss in revenue. From 2018 to 2020, the Google News Initiative has supported projects by 1,190 media outlets in Latin America for a total of $26 million. If, for example, Argentine media received 10 percent of that figure (the data regarding how much money has gone to each country is not currently available), that amount would be around $2.6 million in three years. That is less than 1 percent of the Argentine advertising market, or 0.01 percent of Google's advertising revenue in 2021. Moreover, if local media companies are heavily financed by technology platforms, that compromises their ability to provide impartial reporting on these companies.
The entry of social media companies into the Latin American market has had detrimental effects to local media viability. Though local governments have tried to emulate the actions of their Global North counterparts, they lack the political leverage to make their efforts successful. Meanwhile, voluntary efforts from companies fall short on addressing the problem. Any solution developed, be it state aid or subsidies for public service or community media, will need to be customized to the region’s needs and the resources available.