'Blind Spot: The Attention Economy and the Law' by Tim Wu in (2018)
Antitrust Law Journal comments
Human attention is a resource. An increasingly large and important sector of the economy, including firms such as Google, Facebook, Snap, along with parts of the traditional media, currently depend on attentional markets for their revenue. Their business model, however, present a challenge for laws premised on the presumption of cash markets. This paper introduces a novel economic and legal analysis of attention markets centered on the “attention broker,” the firms that attract and resell attention to advertisers.
The analysis has important payouts for two areas: antitrust analysis, and in particular the oversight of mergers in high technology markets, as well as the protection of the captive audiences from so-called “attentional theft.”
Wu states
Human attention, valuable and limited in supply, is a resource. It has become
commonplace, especially in the media and technology industries, to speak of an
“attention economy” and of competition in “attention markets.” There is even an
attentional currency, the “basic attention token” (BAT) which purports to serve as a
medium of exchange for user attention.
Firms like Facebook and Google, which have
emerged as two of the most important firms in the global economy, depend nearexclusively
on attention markets as a business model.
Yet despite the well-recognized commercial importance of attention markets, the
law has struggled when it encounters the attention economy.
Antitrust agencies, tasked
with assessing the effects of mergers and controlling anticompetitive behavior, seem to
lack a way to understand the market dynamics when the firms offer “free products” that
are actually competing for attention.
Meanwhile, those tasked with consumer
protection have no good paradigm for dealing with attentional intrusions stemming from
non-consensual, intrusive advertising or debates over the use of telephones on airlines.
This essay aims to provide a legal and economic analysis to help face the
challenges here described. In other work, I have described the rise and spread of the
“attention industry,” the businesses that depend on the resale of attention, a global
industry with an annual revenue of approximately $500 billion.
This essay builds on
that work by focusing on the economic decisions implicit in “Attention Brokerage.” As
described here, brokerage is the resale of human attention. It is to attract attention by
offering something to the public (entertainment, news, free services and so on), and then reselling that attention to advertisers for cash. Examples of pure Attention Brokers
include social media companies like Instagram and Facebook, search engines like Google
or Bing, ad-supported publishers like Buzzfeed or AM News, and some television
channels like CBS or NBC. The Brokers’ activities are critical to the operation of
attention markets, for the business model creates much of the competition for attention
that this paper describes.
This approach offers new promise for the antitrust law and some of the challenges
it confronts in the attention economy. Markets and market definition are central to
contemporary antitrust law, and this paper offers a new approach to the definition of
attention markets, in cases where enforcers and courts may otherwise become confused
by the presence of a “free” product or by two-sided market analysis.
It suggests defining the relevant consumer markets based on “time spent” (or just “time”) as the currency,
and then making use of the familiar economic concept of substitution to find an
appropriate market. And so, for example, in a case centered on online mapping
products, an enforcement agency may ask whether products like Google Maps, Waze,
and Apple Maps are, in fact, substitutes for each other in attention markets. The law can
then address appropriate market definition by asking whether other products, like
streaming video, compete for the same attention as online maps. That makes possible
the use of an “Attentional Small but Significant and Non-Transitory Increase in Price”
test, or “A-SSNIPS” test as an aid to finding the appropriate market definition for
consumer markets.
The implications of this paper are not merely theoretical. Armed with a better
analysis, it would not be too late for an American antitrust agency to challenge some of
the relevant acquisitions consummated over the 2010s, like Facebook-Instagram, or
Google-Waze, under either Section 7 of the Clayton Act, or Section 2 of the Sherman
Act. The passage of years might, in fact, provide clearer evidence of whether such
mergers have, in fact, generated efficiencies, or instead yielded either higher advertising
prices, or increased the ad-load experienced by consumers, or resulted in quality effects,
like diminished privacy protections. xxx
In any event, taking attention markets seriously will be essential for agencies
confronting a new generation of challenges raised by importance of the businesses that resell human attention. The goal of this paper is to encourage economists and agencies
to develop workable models that help the law face these challenges.
'Freedom: The Holberg Lecture, 2018' by Cass R. Sunstein
asks
If people have freedom of choice, do their lives go better? Under what conditions? By what criteria?
Consider three distinct problems. (1) In countless situations, human beings face a serious problem of “navigability”; they do not know how to get to their preferred destination, whether the issue involves health, education, employment, or well-being in general. This problem is especially challenging for people who live under conditions of severe deprivation, but it can be significant for all of us. (2) Many of us face problems of self-control, and our decisions today endanger our own future. What we want, right now, hurts us, next year. (3) In some cases, we would actually be happy or well-off with two or more different outcomes, whether the issue involves our jobs, our diets, our city, or even our friends and partners, and the real question, on which good answers are increasingly available, is what most promotes our welfare. The evaluative problem, in such cases, is especially challenging if a decision would alter people’s identity, values, or character. Private and public institutions -- including small companies, large companies, governments – can help people to have better lives, given (1), (2), and (3).
This Essay, the text of the Holberg Lecture 2018, is the basis for a different, thicker, and more elaborate treatment in a book.
