Today during the 25th annual competition law and telecoms conference in Brussels, Serafino Abate, Senior Director of Competition Economics at GSMA, discussed the novel concept of using the value of consumer attention to help define digital markets – particularly zero-priced product and services supported by ad-funded business models.
Consumers’ attention is a critical component underlying the goods and services being exchanged in the digital economy, and focusing on that could help raise the debate above the controversy and confusion generated by the crossover between personal data, privacy, competition law and regulation.
We give our attention to digital platforms – often in exchange for free product and services. This attention is then marketed and sold to advertisers by attention brokers (Tim Wu). The more attention is captured, the higher the profits of ad-funded digital platforms. For some digital platforms, such as Google and Facebook, advertising revenue accounts for more than 90% of the total. It’s also a fast-growing revenue stream for other players, such as Amazon.
However, human attention is scarce and valuable. There’s plenty of behavioural science studies that show how abuse and misuse of attention can harm users and society. It can, in some cases, be the result of anticompetitive behaviour, so it deserves attention from competition authorities. In the past, regulators have used the instruments of broadcasting antitrust (such as must-carry obligations and restrictions on content) to protect audiences from monopolisation and other market failures affecting the quality and quantity of products, including ads.
Today, we could look at this past body of evidence through the lenses of digital markets to find solutions – ranging from labelling sponsored content to limiting algorithms’ ability to show extreme content to widespread problems affecting consumers and society.