Lawmakers mull franchise requirement for social media platforms

Administration lawmakers on Tuesday said they are looking into requiring social media platforms to secure a Congressional franchise to operate, in order to ensure compliance with existing laws.

At present, those applying for a legislative franchise include public utilities and TV and radio stations.

Surigao del Norte Representative Ace Barbers and Abang Lingkod party-list Representative Stephen Paduano made the pitch after learning that advertisers on video-sharing platform YouTube, which is operated by its parent company Google LLC, pay advertising money to Google, which is outside of Philippine jurisdiction.

“Google Philippines and other entities in the Philippines, they do not own nor operate the YouTube platform. Google LLC does. And so that's why the taxes that we [in Google Philippines] pay to the BIR are the ones only proper to the local entities, not [covering] the advertising [revenues from YouTube],” Yves Gonzalez, the head of government affairs and public policy for Google Philippines, said during the House TriCommittee's inquiry into the proliferation of disinformation online.

The TriComm is composed of the House Committees on Public Order and Safety, Public Information, and Information and Communications Technology.

Barbers asked Google how content creators on YouTube earn money, and if proper income taxes are being paid as a result.

Gonzalez explained that YouTube has a revenue-sharing model called the YouTube Partner Program (YPP) where content creators monetize their content while adhering to YouTube's policies, including community guidelines, terms of service, and advertiser-friendly guidelines.

This means that entities can place advertisements at the beginning or in the middle of the content creators’ videos, and part of Google LLC’s ad revenues goes to them.

“We are contemplating on maybe perhaps asking all the social media platforms to secure a franchise in this Congress," Barbers said in response. "Because we want to make sure that it’s not just the platforms who make money but also the Philippine government. That’s one.

"Number two, if you are under the franchise of this government, then you will toe the line. Sorry, I do not mean toe the line. Meaning, you will be subject to the regulations and then the rules that will be enforced under this law,” he added.

“Kailangang magkaroon ng regulasyon. Merong regulatory policy dapat itong ating mga social media platforms and actors in social media. Kasi hindi naman puwedeng gagamitin nila yan para magpahayag ng kanilang disgusto sa pamamagitan lang ng pagpapakalat ng pekeng news o walang basehang mga pahayag,” he also said.

(There has to be regulation. There has to be a regulatory policy for social media platforms and actors in social media . Because they can't just spread fake news or baseless statements.)

Paduano, for his part, said laws can be amended to classify social media platforms as public utilities needing a congressional franchise to operate.

“A social media platform, in this case, Google, YouTube, and all other social media platforms are not included in the list of all public utilities under the Public Service Act. How can you regulate something which is not covered by law? You are doing business here. You earn revenues. I think it is just fair. You should pay taxes,” he said.

“Those content creators in your platform, they have to pay taxes, too,” Paduano added.

Gonzalez responded by saying that as it is, there are sufficient Philippine laws governing social media platforms such as YouTube.

“There are regulations in the Philippines that govern social media platforms. For example, the recently enacted law imposing VAT (Value Added Tax) on digital platforms. That law covers YouTube and other [online] platforms. It covers even non-resident digital platforms. Another example is the Internet Transactions Act.  That law also covers us and other online platforms and YouTube,” he said. — BM, GMA Integrated News