Since January 2023, the United States Department of Justice along with the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia, have been in court pursuing a civil antitrust suit against Google. And on Sept. 26, 2023, the Federal Trade Commission and 17 state attorneys general filed a separate antitrust case against Amazon. What is this fight between the government and the major online platforms? The fight is about us. That is, they are fighting over access to our personal information.
The details of our online identity and market habits represent a valuable commodity for Google and Amazon—but also for companies like Meta (formerly Facebook), X (formerly Twitter), and Apple. Think about the rough numbers involved: Internet advertising in the U.S. in 2023 has amounted to over $200 billion. The number of active online users is at least 200 million. Two hundred billion divided by 200 million makes our personal information worth about $1,000. That’s $1,000 that changes hands between marketers and the online for each and every adult per year.
This begs the question: if this is our information to begin with, why don’t we have the means to not only control it, but to potentially derive value from it? If someone wants complete privacy, they can opt out. But if someone is happy to let marketers know about their market preferences, they could be compensated for providing that valuable information.
The tech giants are not going to volunteer to initiate this sort of thing. But the current legal battles may provide a window of opportunity. Ultimately, we can expect there will have to be a third party to intervene between the online consumers and Big Tech. There are two candidates for this role—first the government, and second, some new private for-profit or not-for-profit organizations.
The government stepping into this third-party role makes sense. There seems to be an increasing appetite for “reigning in big tech” on Capitol Hill that can be found on both sides of the aisle. But legislation is likely to take the form of anti-trust prohibition to prevent an outright monopoly by a few big tech companies. Proactively entering the marketplace to require some form of profit sharing is probably beyond current-day congressional limits. The closest Congress has come so for is a now-abandoned Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data (DASHBOARD) Act, which was introduced in 2022 and would have required major platforms to explain to consumers and financial regulators what data they are collecting from online users, and how it is being monetized. The Silicon Valley lobbyists squawked loudly and so far the bill is gathering dust. And all that was proposed in that case was to make some data public. It’s safe to assume, then, that dramatic federal intervention into this marketplace is probably not in the cards.
But what about non-governmental third parties? There are literally dozens of small for-profit startups and not-for-profits in the online privacy space. Several alternative browser search engines such as Duck-Duck Go, Neeva, and Brave offer privacy-protected browsing. But as for-profits they often end up substituting their own targeted ads (presumably without sharing information) for what you would otherwise see on a Google search or a Facebook feed. Brave is experimenting with rewarding users for their attention with cryptocurrency tokens called Basic Attention Tokens (BATS). This is a step in the right direction. But so far, usage is tiny, distribution is limited to affiliated players, and the crypto value bubble complicates the incentives. While these companies try to attract customers with “privacy-protection” marketing rhetoric and small tokenized incentives, these initiatives feel more like a frequent flyer program than real money. Ultimately, Big Tech still controls the golden goose.
So how would a serious buy-in system for consumers work? It would have to allow a privacy conscious user to opt out entirely. No personal information would be extracted. No profit there, so no profit-sharing. In that sense those users “pay” for the privilege of using these platforms anonymously. YouTube offers an ad-free service for a fee as a similar arrangement. For those people open to being targeted by eager advertisers there would be an intelligent privacy interface between users and the online players. It might function like a VPN or proxy server but one which intelligently negotiates a price. “My client spent $8,500 on online goods and services last year,” the interface would say. “She’s a very promising customer. What will you bid for her attention this month?”
Read More: The Problem With Too Much Data Privacy
Programmatic online advertising already works this way. It’s all real-time algorithmic negotiations of payments for ad exposures. One computer system run by the social media and browser companies gathers data about users based on their online behavior and geography, and electronically offers their “attention” to another computer system run by the ad agencies. The computers talk to each other and the ad agencies have 10 milliseconds to respond to an offer and then algorithmically accepts the highest high-speed bid for attention. Deal done in a flash. Tens of thousands of deals every second. That component of the online ad market is about a $100 billion. Of course, ad blocking technologies may complicate the picture when users opt to use them. It is a bit of a technical cat and mouse game as aggressive advertisers try to embed their ads in ways that are difficult for ad blockers to detect. But so far ad blockers mostly just block when they can. It’s like a switch. Blocking is on or off. That’s not very intelligent privacy negotiation.
If access to your attention is worth $1,000, it may be worth thinking about this privacy issue in more depth. Ad blockers don’t currently offer to negotiate a price for access. Some users may value privacy very highly and demand much more than advertisers would find practical, so no deal. Others are ambivalent or actually interested in connecting with marketers. So let’s put the evolving capacity of AI agents to work. Your algorithm talks to my algorithm—intelligent privacy. Now there’s a possible positive outcome from the current legal battles.
We Should Get Paid for Our Online Data
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30.11.2023
Since January 2023, the United States Department of Justice along with the Attorneys General of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia, have been in court pursuing a civil antitrust suit against Google. And on Sept. 26, 2023, the Federal Trade Commission and 17 state attorneys general filed a separate antitrust case against Amazon. What is this fight between the government and the major online platforms? The fight is about us. That is, they are fighting over access to our personal information.
The details of our online identity and market habits represent a valuable commodity for Google and Amazon—but also for companies like Meta (formerly Facebook), X (formerly Twitter), and Apple. Think about the rough numbers involved: Internet advertising in the U.S. in 2023 has amounted to over $200 billion. The number of active online users is at least 200 million. Two hundred billion divided by 200 million makes our personal information worth about $1,000. That’s $1,000 that changes hands between marketers and the online for each and every adult per year.
This begs the question: if this is our information to begin with, why don’t we have the means to not only control it, but to potentially derive value from it? If someone wants complete privacy, they can opt out. But if someone is happy to let marketers know about their market preferences, they could be compensated for providing that valuable information.
The tech giants are not going to volunteer to initiate this sort of thing. But the current legal........
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