Thread by @doctorow

There's an old Irish joke whose punchline goes, "If you want to get there, I wouldn't start from here." That's basically how I feel about the so-called Australian "link tax" and Facebook's retaliation.

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Let's start with the fact that it's not a link tax - it's a form of arbitrated collective bargaining that's meant to correct an imbalance in negotiating power created by monopolization.

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The problem that the system is supposed to ameliorate is that the ad-tech platforms cheat. They lie about the reach of their ads. They lie about the performance of their ads. They rig markets so they can price-gouge. They collude to rig prices.

papers.ssrn.com/sol3/papers.cf…

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They design their systems so publishers leak intelligence to them, then they exploit that leakage to gouge the publishers further. It hurts advertisers, readers and publishers, and it's the result of an illegal, collusive, corrupt ad-tech duopoly.

pluralistic.net/2020/12/06/sur…

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The existence of an advertising duopoly, meanwhile, is the result of lax antitrust enforcement. Facebook and Google were permitted to execute a long string of anticompetitive mergers and acquisitions, producing the hyper-concentrated market we see today.

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The obvious remedy to this situation is to break up the monopolies, but that is off the table (for now). 40 years of neoliberal orthodoxy says that monopolies are efficient and breakups don't work, so we're left yanking on other policy levers.

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For example, ad-tech pioneered a long, accelerating trend to surveillance. Their reach meant they could gather data on nearly everything that happened online (Facebook Like buttons, Google Analytics). Their capital meant they could strangle privacy laws in the cradle.

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Eventually this became too much to bear. The EU passed the GDPR - but without breakups or other explicit antimonopoly measures. The result was that FB/Goog had to look down the back of the sofa for change to pay for compliance.

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Meanwhile smaller, EU-based competitors (who were much dirtier than FB/Goog because they needed to behave worse to be economically viable in the cracks left by the duopoly) were driven out of business, handing even more market-power to Googbook.

papers.ssrn.com/sol3/papers.cf…

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Which brings me back to Australia. It's undeniable that publishers get ripped off by Googbook. Their ad marketplaces are frauds from top to bottom: fake metrics for fake users seeing fake ads, run on bid-rigging and self-dealing.

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Publishers that complain about this get slammed: Googbook uses the fact that they have created anticompetitive, vertically integrated cartels to tie a willingness to submit to crooked ad payments to traffic.

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That means that publishers who make a stink about being ripped off - or who take measures to prevent leakage of their internal business data - have their traffic switched off. This is possible because regulators permitted vertical mergers between search/social and ad-tech.

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This vertical integration is the source of confusion about whether this is a link-tax. The goal of the regulation is to clean up the ad markets, but Googbook use links as a stick to beat up publishers when they don't submit to corrupt ad practices, so links get implicated.

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But the regulation's primary levers are transparency: it forces Googbook to disclose which data it harvests from publishers and how it uses it; it forces Googbook to disclose algorithmic changes that will result in significant changes to ad performance.

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Just as importantly, it forbids Googbook from using their search/social business to retaliate against publishers who object to bad practices in their ad-tech units.

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At @matthewstoller writes, the idea "is to mimic a healthy market, where there is transparency of data and a robust set of buyers and sellers instead of a few dominant platforms."

mattstoller.substack.com/p/facecrook-de…

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The hope/wish is that all this transparency and guaranteed of non-retaliation might means Googbook ending their market corruption so publishers will get a fair price for their ad-inventory. And if they don't, there's an arbitrator who hears both sides and sets prices.

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This is how collective bargaining often works - when you have one side of a deal who has all the power (like a big employer) and a diffuse set of actors who lack power (like workers), an arbitrator hears both sides and hands down a deal that's meant to be fairer.

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But of course, this isn't a negotiation between workers and employers: it's a bargain between a cartel of news organizations and a search duopoly. That's not ideal! For starters, it means that the government gets to decide who is a "news organization."

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That's RIPE for abuse. News organizations are expected to report on the government AND the government gets to decide whether they are entitled to participate in collective bargaining with Googbook, which could mean the difference between financial viability and bankruptcy.

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Remember, one of the problems this system is supposed to resolve is powerful entities (Googbook) using their power to punish news organizations for complaining about their behavior - governments were in that game long before Googbook came into existence.

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And there's another problem: the structure of the Australian news market, which is yet another highly concentrated industry, dominated by a rapacious billionaire who uses his power to manipulate politics: Rupert Murdoch.

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Murdoch conquered Australian media the same way Googbook conquered the net: through anticompetitive conduct that was waved through by collusive regulators who never met a monopoly they didn't view as efficient.

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It's not wrong to say that the only reason this regulation got off the drawing-board is that Murdoch viewed it as a way to shift a few balance-points from Big Tech's side of the ledger to Big Media's side.

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Can't we - journalists, readers - hope for something better than being dominated by a different set of giants and praying that the new boss drops a few more crumbs than the old boss?

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Goddamned right. The Australian reg tries to get a fair shake for the independent press as well as the Murdoch press, setting out some objective criteria for who is entitled to enter the bargaining unit.

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But the fact is that monopolies reproduce themselves. As @ddayen describes in MONOPOLIZED, when a monopoly forms, all the other participants in the supply chain have to monopolize or die.

pluralistic.net/2021/01/29/fra…

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Big Pharma gets monopolized and squeezes hospitals. Hospitals monopolize to fight back and squeeze insurers. Insurers monopolize and squeeze...us. We're the only ones who don't get to organize to push back.

The people's countermonopolistic entity is the democratic state.

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The state's job is to prevent monopolies from forming, and it has failed to do that job for 40 years. Now it's stuck trying to fix the effects of monopoly without fixing monopolies themselves.

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40 years ago, we got rid of the idea of fighting monopolies because they corrupted our governments and working lives - we replaced it with the neoliberal idea of "consumer welfare," which held that only "bad" monopolies should face enforcement.

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What's a bad monopoly? It's when companies conspire to raise prices. That's why the US government clobbered the Big Six publishers when they leaned on Amazon to stop engaging in predatory ebook pricing.

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But while the "consumer welfare" monopoly enforcement is aggressive when two or more companies collude to set prices, it has NO PROBLEM if those companies merge with one another and then do exactly the same thing.

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When the CEOs of two companies conspire to set prices, it's illegal. When they merge their companies and engage in the same conspiracy, it's not. Collective bargaining is out, monopolization is in. That's why the Big Six publishers are now the Big Four.

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"If you wanted to get there, I wouldn't start from here." The highly monopolized news sector is mainly controlled by extremist billionaires and private-equity looters. The principal beneficiaries the Australian regulation are part of the problem.

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That doesn't change the fact that Googbook are a corrupt, collusive duopoly. It also doesn't change the fact that there are a BUNCH of indie news-outlets that got to ride on Murdoch's coat-tails in this regulation.

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As with the GDPR, the question to ask is whether this will strengthen or weaken monopolists, and there, I think, is some cause for hope. Forcing Googbook to reveal their data-collection and algorithmic practices and prohibiting retaliation is a solid anti-monopoly move.

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Likewise, establishing a precedent for inter-industry collective bargaining is a useful harm-reduction measure for dealing with a monopolized market while we muster political will for breakups. It sure beats the alternative of merging every industry into its own monopoly.

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It's a confusing issue. Link-taxes are bullshit and they're pro-monopolistic, since big companies can afford them and little ones can't. But this isn't a link tax – the only reason it seems like one is because links are the stick that Googbook beats its supply-chain with.

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Image: IPWAI (modified)
commons.wikimedia.org/wiki/File:An_A…

CC BY-SA:
creativecommons.org/licenses/by-sa…

eof/

ETA: here's an unrolled link to share and read, on my surveillance-free, ad-free, tracker-free blog, pluralistic.net:

pluralistic.net/2021/02/21/pal…