Save the media from monopolies now!
Shatter the ad-tech monopolies and let newspapers and other media live again
It’s about time we fixed this situation: more than half the revenue from ads on news websites goes to ad-tech companies, the biggest of whom are Google and Facebook who have effectively squeezed the financial life out of the newsrooms and into their pockets.
The story is illuminated in detail in Cory Doctorow’s posting from yesterday, the 24th of May, on the Electronic Freedom Foundation (EFF) website.
Two key observations:
The monopoly: The big ad-tech duopoly (Google and Facebook) exploit their respective vertical-advertising monopolies — ad tech stacks — to suck the economic life out of the news business. Each ad-tech stack has three main interoperating parts:
A “supply-side platform” (SSP): The SSP acts as the publisher’s broker, bringing each user to market and selling their attention on the basis of their “behavioral” traits;
A “demand-side platform” (DSP): The DSP represents the advertisers, consulting a wishlist of specific behavioral traits that each advertiser wants to target;
A marketplace: The marketplace solicits bids on behalf of the SSP, collects bids from DSPs, and then consummates the transaction by delivering the winning bidder’s ad to the SSP to be crammed into the user’s eyeballs.
[Other monopolists are emerging on the Internet. Amazon wants to be as successful as Google and Facebook in running its own ad-tech monopoly — in the online retail business. They’re not quite there yet, but they’re working on it!]
The EFF article has several metaphors for the monopoly power all these mega players engage in. Here’s just one:
Imagine if a divorce lawyer represented both parties, and was also the judge in the divorce court, and was also trying to match both of the soon-to-be-single parties on a dating service.
Doctorow notes: “The ad-tech market isn’t a market at all: it’s a big store con where everyone the publisher sees is in on the game: the buyer’s agent, the seller’s agent, and the marketplace where they bring the publisher’s product are all run by a single company, or by two companies that have secretly agreed not to compete. If you can’t spot the sucker at the poker-table…you’re the sucker.”
There is a new bill in Congress, with bipartisan support, aimed at breaking up these vertical-advertising monopolies.
That’s where the AMERICA Act comes in. Introduced by Sen. Mike Lee [R-UT], the bill is truly bipartisan, numbering among its co-sponsors both Sen. Ted Cruz [R-TX] and Sen. Elizabeth Warren [D-MA], and many other powerful senators from both sides of the aisle.
What a pleasant surprise, a bipartisan bill! Republicans and Democrats are working together!
Under the AMERICA Act’s provisions, companies like Google and Meta would be forced to sell off or shut down their demand-side (buyer) platforms and their supply-side (seller) platforms. No large company (processing $20 billion per year or more in ad transactions) that operated an ad exchange would be allowed to represent the buyers and sellers who used that exchange. Likewise, no buyer-side platform could operate a seller-side platform, and vice-versa.
To-do list for you:
Read the EFF article for more.
Check with your Federal representatives to see if they’re going to support the AMERICA act. Let them know how you feel about this effort.
Pass the word around: everyone should support this bill.
Go broader too: What do you think about applying the same anti-trust constraints on other platforms that dominate the supply side and demand side platforms for their marketplaces? (Hint: go look at the ads that pollute Amazon’s site. I used to love Amazon. But they’re abusing and confusing buyers and sellers too.)
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