Monopoly Power and the Future of Facebook
What is your time on Facebook worth to publishers? Advertisers already evaluate this proposition — our online activity is part of what Tim Wu describes as an attention economy. Media consumption from the early days of the penny press, Wu argues in his book The Attention Merchants, has increasingly been an exercise in connecting eyeballs to advertisers. However, monopoly power of networked information platforms presents another revenue stream: directly charging content creators for access to consumers. This market paradigm shift, which would radically change the open internet, is a very real proposition that Facebook is testing.
Mashable reports that Facebook is experimenting with removing content from the news feed unless publishers pay for access in select countries. Facebook acknowledges that this program is currently being tested in Bolivia, Cambodia, Guatemala, Serbia, Slovakia and Sri Lanka. With over 2 billion monthly users around the world this practice opens a new revenue stream for the company while limiting consumer choice in information consumption.
Facebook and other networks platforms are ostensibly social spaces. In exchange for viewing ever present advertising we as users can create, share, connect with, and consume information. However, the size of a company like Facebook means an outsized influence over our information economy. Facebook has considerable power to algorithmically differentiate between our information consumption habits and push an advertising-rich junk-information diet. For two years Facebook has already been seeking to leverage the power of their considerable user-base to develop publisher relationships. In 2015 Facebook launched Instant Articles, gaining access the data of news readers and opening the possibility for revenue-sharing schemes. Charging publishers for access to users would transformFacebook into a play-for-play space where Facebook has an ever increasing influence over the type of content we see.
Network monopoly power is the same concern that underpins another issue Tim Wu has raised: network neutrality and broadband discrimination. If you rely on a single company for internet access that company can start charging websites and services to for access to internet users. Facebook has come under fire from network neutrality advocates in the past for undercutting the open internet. In 2010 Facebook launched Facebook Zero, a partnership with telecommunications providers that offers users a restricted version of the internet without data charges. The service, later rebranded Free Basics, found stiff opposition in India where users protested that the limited access to only 38 websites was a far cry from the open internet. Kiran Jonnalagadda helped launch the #SaveTheInternet campaign ultimately succeeding in the Telecom Regulatory Authority of India asking Facebook’s Indian partner Reliance Communications to cease offering the limited service.
Facebook’s experiment with charging publishers demonstrates a stark reality for the future of the internet — the realization that the advertiser-driven model alone is not as valuable as the power to directly charge for access to information consumers. Monopoly power of platforms is not unique to Facebook. For example Amazon has amassed the infrastructure to prevent meaningful competition and Google uses their dominance in the search engine market to favor its own services and offerings. Facebook is now looking for new ways to use its users as a product for sale. As each tech company develops limited-competition spaces consumers and publishers are squeezed between gatekeepers. Publishers have been unhappy with the revenue from Instant Articles but the size of Facebook leaves them without alternatives.
The past presidential election provided a stark reminder: the advertising value of popular lies are greater than the value of unpopular truths. However, the structural dilemma is the outsized rule of a single company in mediating information consumption. If Facebook seeks to charge publishers then consumers and publishers alike will look to policymakers for protection. As Washington bickers over political advertising on Facebook the real opportunity is missed: addressing network monopolies and the need for competitive markets.
