Thread by @doctorow

#BigTech steals from news, but what it steals isn't *content*. Talking about the news isn't theft, and neither is linking to it, or excerpting it. But stealing *money*? That's *definitely* theft.

1/

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2023/05/25/str…

2/

Big Tech steals money from the news media. 51% of every ad-dollar is claimed by a tech intermediary, a middleman that squats on a chokepoint between advertisers and publishers.

3/

Two companies - #Google and #Meta - dominate this sector, and both of these companies are "full-stack" - which is cutesy techspeak for "#VerticalMonopoly*."

4/

Here's what that means: when an advertiser wants to place an ad, it contracts with the "#DemandSidePlatform" (#DSP) to seek out a chance to put an ad in front of a user based on nonconsensually gathered surveillance data about a potential customer.

5/

The DSP contacts an ad-exchange - a marketplace where advertisers bid against each other to cram their ads into the eyeballs of a user based on surveillance data matches.

6/

The ad-exchange receives a constant stream of chances to place ads. This stream is generated by the "#SupplySidePlatform" (#SSP), a service that represents publishers who want to sell ads.

7/

#Facebook and Google are "full stack" for ads: they represent buyers *and* sellers, and run the market. When sales close, #Googbook collects commissions from advertisers, from publishers, *and* a market usage fee. And of course, Googbook are both publishers *and* advertisers.

8/

This is like a stock exchange where one company operates the exchange, while serving as broker and underwriter for every stock bought or sold, while owning huge amounts of stock in many of the listed companies as well as owning the largest companies on the exchange outright.
9/

It's like a realtor representing the buyer *and* the seller, while buying and selling millions of homes for its own purposes, bidding against its buyers and also undercutting its sellers, in an opaque auction that only it can see.

10/

It's a single lawyer representing both parties in a divorce, while serving as judge in divorce court, while trying to match one of the divorcing parties on Tinder.

11/

It's *incredibly* dirty. Ad-tech gobbles up most of every ad dollar in commissions and junk fees, and says it's because they're just really danged good at buying and selling ads. Forgive me if I sound cynical, but I think it's a lot more likely that they're good at cheating.

12/

We could try to make them stop cheating with a bunch of rules about how a company with this kind of gross conflict of interest should conduct itself. But enforcing those rules would be hard - merely *detecting* cheating would be hard.

13/

A simpler, more effective approach is to *remove* the conflict of interest.

Writing on @EFF's Deeplinks blog, I explain how the #AMERICAAct - introduced by @SenMikeLee, with bipartisan cosponsors from @SenWarren to #TedCruz (!) - can do just that:

eff.org/deeplinks/2023…

14/

The AMERICA Act would require the largest ad-tech companies to sell off two of their three ad-tech divisions - they could be a buyer's agent, a seller's agent or a marketplace - but not all three (not even two!).

15/

This is in keeping with a well-established principle in #antitrust law: #StructuralSeparation, the idea that a company can be a platform owner, or a platform user, but not both.

16/

In the heyday of structural separation, railroad companies were banned from running freight companies that competed with the firms that shipped freight on their rails. Likewise, banks were banned from owning companies that competed with the businesses they loaned money to.

17/

Basically, the rule said, "If you want to be the ref in this game, you can't own one of the teams":

eff.org/es/deeplinks/2…

18/

Structural separation acknowledges that some conflicts of interest are so consequential and so hard to police that they shouldn't exist. A judge won't hear a case if they know one of the litigants - and certainly not if they have a financial stake in the outcome of the case.

19/

The ad-tech duopoly controls a massive slice of the ad market, and holds in its hands the destiny of much of the news and other media we enjoy and rely on.

20/

Under the AMERICA Act's structural separation rule, the obvious, glaring conflicts of interest that dominate big ad-tech companies would be abolished.

21/

The AMERICA Act also regulates smaller ad-tech platforms. Companies with $5-20b in turnover would have a duty to "act in the best interests of their customers, including by making the best execution for bids on ads."

22/

They would be required to maintain transparent systems that are designed to facilitate third-party auditing.

23/

If a single company operated brokerages serving both buyers and sellers, it would need to create firewalls between both sides of the business, and would face stiff penalties for failures to uphold their customers' interests.

24/

EFF's endorsement of the AMERICA Act is the first of four proposals we're laying out in a series on saving news media from Big Tech. We introduced those proposals last week in a big "curtain raiser" post:

eff.org/deeplinks/2023…

25/

Next week, we'll publish our proposal for using privacy law to kill surveillance ads, replacing them with "context ads" that let publishers - not ad-tech - control the market.

26/

Image:
EFF
eff.org/deeplinks/2023…

CC BY 3.0
creativecommons.org/licenses/by/3.…

eof/