“Digital Deceit II” Debunked

Inside the beltway we are seeing an epidemic of emotionally based policy proposals from DC think tanks who are woefully disconnected from the rest of the country.

One such recent example comes from New America’s new paper, “Digital Deceit II.” Over the course of 67 pages, the authors lay out their dystopian view of reality and then provide solutions to these constructed problems.

Ironically for an organization called “New America,” the authors of the paper fear the modern age of technology. The authors believe we are living in a digital dystopia, with our lives being controlled by tech monopolists hiding behind the screen of our smartphone.

The concerns of New America are not shared by the public, and their policy prescriptions are not supported by the public either.

The concerns of New America are not shared by the public, and their policy prescriptions are not supported by the public either.

A recent Gallup Poll found the highest percentage of optimism among Americans since 2010. Americans are optimistic about the future and technology — they don’t support New America’s “digital deceit.”

Unlike New Americas dispirited authors, the rest of us overwhelmingly enjoy the empowerment enabled by online platforms. 70% of Americans say digital platforms, including their advertising, contribute value to the national economy. 77% of Americans say digital platforms help small businesses.

Online platforms have empowered consumers like never before.

After misstating the nonexistent problems of tech platforms, “Digital Deceit II” then puts forward solutions that will only cause more problems.

There is a disconnect between privileged elites in Washington and the rest of the country.

Americans value online platforms as a way for them to truly be a part of the internet revolution. Lawmakers and policy professionals in D.C. must recognize that. By pointing out the problems with this paper, we hope that more DC groups will start listing to Americans beyond the beltway.

Theme-by-theme, we break down the disconnect between anti-tech advocates like those behind “Digital Deceit” and the public below.

Regulating Tech

New America:

“Without the oversight of regulators, the consumer has no chance in this contest. The appropriate policy response to contain and redress the negative externalities of the data tracking-and-targeting business must begin with an earnest treatment of privacy policy. But the U.S. government currently possesses no clear way of placing checks on the business practices relating to personal data.” p26

America disagrees:

Only 13% of Americans agree with New America and say government regulations would not harm consumer freedom and choice online. Across the board, there was widespread skepticism of government regulation of online platforms — by a 3-to-1 margin, Democrats still thought red tape on tech would harm consumer choice and freedom.

Opposing Smart Advertising

New America:

May 2017 Poll: only 13% are “happy to give companies my data if results in less annoying advertising.” p27

“On platforms like Facebook and Google, meanwhile, money rules over all else, expressed through the sale of aggregated attention to the end showing the consumer a relevant ad.” p53

America disagrees:

NetChoice polling shows that by a 3-to-1 margin, Americans prefer their online services to be “paid for” by targeted advertising.

Presumably, the New America would support regulations that would limit the ability of consumers to share data to receive free online services, but such regulations would only have the support of 12% of Americans. Over 70% would oppose such a measure.

Breaking Up Big Tech

New America:

“[T]here is simply no economically viable method for any company to match Google’s capability in the search market or Facebook’s capacity in social networking…Because there is little competition in these markets, and therefore little consumer choice, there is no option when a consumer becomes sensitive to rising privacy prices.” p41–42

“Scholars and critics have furthermore contested that antitrust officials can and should pursue vertical integrations of firms in the digital ecosystem. We agree with this perspective.” p52

America disagrees:

Only 16% of Americans say services like Apple, Google, Facebook, and Amazon could not be replaced if a better competitor came along. 43% of Americans have chosen to stop using a social media platform. 81% did so either because they preferred a competing platform or because they no longer needed to use the service they left. Contrary to New America’s claims, consumers are empowered.

Such a focus of the government’s antitrust resources on tech platforms, as evidently supported by New America, is only supported by 5% of Americans. Over twice as many say this focus should be on the oil and gas industry, and almost six times as many say so for the pharmaceutical industry.

Banning Startup Acquisition

New America:

“This practice of acquiring competitors should be monitored and restricted. Looking back, it is clear that regulators should have been far more careful in assessing the potential of past mergers to result in market power and consumer harms. Any mergers that are permitted should be scrutinized and conditioned to restrict data-sharing between affiliates.” p44.

“Moreover, merger review should explicitly consider not only the concentration of horizontal market power but also the concentration of data that enables competitive advantage in multiple adjacent market segments. For example, in the case of Facebook’s acquisition of Instagram, a case can be made that these services address different markets. However, the user data they collect that informs ad-targeting decisions is firmly in the same market, and more importantly, it is the market where most of the revenues are generated.” p44

America disagrees:

Americans do not share the New America’s skepticism for vertical integration too. 90% do not support government bans on large tech companies acquiring startups.