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mostlysignssomeportents · 4 months

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UK publishers suing Google for $17.4b over rigged ad markets

THIS WEEKEND (June 7–9), I'm in AMHERST, NEW YORK to keynote the 25th Annual Media Ecology Association Convention and accept the Neil Postman Award for Career Achievement in Public Intellectual Activity.

Look, no one wants to kick Big Tech to the curb more than I do, but, also: it's good that Google indexes the news so people can find it, and it's good that Facebook provides forums where people can talk about the news.

It's not news if you can't find it. It's not news if you can't talk about it. We don't call information you can't find or discuss "news" – we call it "secrets."

And yet, the most popular – and widely deployed – anti-Big Tech tactic promulgated by the news industry and supported by many of my fellow trustbusters is premised on making Big Tech pay to index the news and/or provide a forum to discuss news articles. These "news bargaining codes" (or, less charitably, "link taxes") have been mooted or introduced in the EU, France, Spain, Australia, and Canada. There are proposals to introduce these in the US (through the JCPA) and in California (the CJPA).

These US bills are probably dead on arrival, for reasons that can be easily understood by the Canadian experience with them. After Canada introduced Bill C-18 – its own news bargaining code – Meta did exactly what it had done in many other places where this had been tried: blocked all news from Facebook, Instagram, Threads, and other Meta properties.

This has been a disaster for the news industry and a disaster for Canadians' ability to discuss the news. Oh, it makes Meta look like assholes, too, but Meta is the poster child for "too big to care" and is palpably indifferent to the PR costs of this boycott.

Frustrated lawmakers are now trying to figure out what to do next. The most common proposal is to order Meta to carry the news. Canadians should be worried about this, because the next government will almost certainly be helmed by the far-right conspiratorialist culture warrior Pierre Poilievre, who will doubtless use this power to order Facebook to platform "news sites" to give prominence to Canada's rotten bushel of crypto-fascist (and openly fascist) "news" sites.

Americans should worry about this too. A Donald Trump 2028 presidency combined with a must-carry rule for news would see Trump's cabinet appointees deciding what is (and is not) news, and ordering large social media platforms to cram the Daily Caller (or, you know, the Daily Stormer) into our eyeballs.

But there's another, more fundamental reason that must-carry is incompatible with the American system: the First Amendment. The government simply can't issue a blanket legal order to platforms requiring them to carry certain speech. They can strongly encourage it. A court can order limited compelled speech (say, a retraction following a finding of libel). Under emergency conditions, the government might be able to compel the transmission of urgent messages. But there's just no way the First Amendment can be squared with a blanket, ongoing order issued by the government to communications platforms requiring them to reproduce, and make available, everything published by some collection of their favorite news outlets.

This might also be illegal in Canada, but it's harder to be definitive. The Canadian Charter of Rights and Freedoms was enshrined in 1982, and Canada's Supreme Court is still figuring out what it means. Section Two of the Charter enshrines a free expression right, but it's worded in less absolute terms than the First Amendment, and that's deliberate. During the debate over the wording of the Charter, Canadian scholars and policymakers specifically invoked problems with First Amendment absolutism and tried to chart a middle course between strong protections for free expression and problems with the First Amendment's brook-no-exceptions language.

So maybe Canada's Supreme Court would find a must-carry order to Meta to be a violation of the Charter, but it's hard to say for sure. The Charter is both young and ambiguous, so it's harder to be definitive about what it would say about this hypothetical. But when it comes to the US and the First Amendment, that's categorically untrue. The US Constitution is centuries older than the Canadian Charter, and the First Amendment is extremely definitive, and there are reams of precedent interpreting it. The JPCA and CJPA are totally incompatible with the US Constitution. Passing them isn't as silly as passing a law declaring that Pi equals three or that water isn't wet, but it's in the neighborhood.

But all that isn't to say that the news industry shouldn't be attacking Big Tech. Far from it. Big Tech compulsively steals from the news!

But what Big Tech steals from the news isn't content.

It's money.

Big Tech steals money from the news. Take social media: when a news outlet invests in building a subscriber base on a social media platform, they're giving that platform a stick to beat them with. The more subscribers you have on social media, the more you'll be willing to pay to reach those subscribers, and the more incentive there is for the platform to suppress the reach of your articles unless you pay to "boost" your content.

This is plainly fraudulent. When I sign up to follow a news outlet on a social media site, I'm telling the platform to show me the things the news outlet publishes. When the platform uses that subscription as the basis for a blackmail plot, holding my desire to read the news to ransom, they are breaking their implied promise to me to show me the things I asked to see:

https://www.eff.org/deeplinks/2023/06/save-news-we-need-end-end-web

This is stealing money from the news. It's the definition of an "unfair method of competition." Article 5 of the Federal Trade Commission Act gives the FTC the power to step in and ban this practice, and they should:

https://pluralistic.net/2023/01/10/the-courage-to-govern/#whos-in-charge

Big Tech also steals money from the news via the App Tax: the 30% rake that the mobile OS duopoly (Apple/Google) requires for every in-app purchase (Apple/Google also have policies that punish app vendors who take you to the web to make payments without paying the App Tax). 30% out of every subscriber dollar sent via an app is highway robbery! By contrast, the hyperconcentrated, price-gouging payment processing cartel charges 2-5% – about a tenth of the Big Tech tax. This is Big Tech stealing money from the news:

https://www.eff.org/deeplinks/2023/06/save-news-we-must-open-app-stores

Finally, Big Tech steals money by monopolizing the ad market. The Google-Meta ad duopoly takes 51% out of every ad-dollar spent. The historic share going to advertising "intermediaries" is 10-15%. In other words, Google/Meta cornered the market on ads and then tripled the bite they were taking out of publishers' advertising revenue. They even have an illegal, collusive arrangement to rig this market, codenamed "Jedi Blue":

https://en.wikipedia.org/wiki/Jedi_Blue

There's two ways to unrig the ad market, and we should do both of them.

First, we should trustbust both Google and Meta and force them to sell off parts of their advertising businesses. Currently, both Google and Meta operate a "full stack" of ad services. They have an arm that represents advertisers buying space for ads. Another arm represents publishers selling space to advertisers. A third arm operates the marketplace where these sales take place. All three arms collect fees. On top of that: Google/Meta are both publishers and advertisers, competing with their own customers!

This is as if you were in court for a divorce and you discovered that the same lawyer representing your soon-to-be ex was also representing you…while serving as the judge…and trying to match with you both on Tinder. It shouldn't surprise you if at the end of that divorce, the court ruled that the family home should go to the lawyer.

So yeah, we should break up ad-tech:

https://www.eff.org/deeplinks/2023/05/save-news-we-must-shatter-ad-tech

Also: we should ban surveillance advertising. Surveillance advertising gives ad-tech companies a permanent advantage over publishers. Ad-tech will always know more about readers' behavior than publishers do, because Big Tech engages in continuous, highly invasive surveillance of every internet user in the world. Surveillance ads perform a little better than "content-based ads" (ads sold based on the content of a web-page, not the behavior of the person looking at the page), but publishers will always know more about their content than ad-tech does. That means that even if content-based ads command a slightly lower price than surveillance ads, a much larger share of that payment will go to publishers:

https://www.eff.org/deeplinks/2023/05/save-news-we-must-ban-surveillance-advertising

Banning surveillance advertising isn't just good business, it's good politics. The potential coalition for banning surveillance ads is everyone who is harmed by commercial surveillance. That's a coalition that's orders of magnitude larger than the pool of people who merely care about fairness in the ad/news industries. It's everyone who's worried about their grandparents being brainwashed on Facebook, or their teens becoming anorexic because of Instagram. It includes people angry about deepfake porn, and people angry about Black Lives Matter protesters' identities being handed to the cops by Google (see also: Jan 6 insurrectionists).

It also includes everyone who discovers that they're paying higher prices because a vendor is using surveillance data to determine how much they'll pay – like when McDonald's raises the price of your "meal deal" on your payday, based on the assumption that you will spend more when your bank account is at its highest monthly level:

https://pluralistic.net/2024/06/05/your-price-named/#privacy-first-again

Attacking Big Tech for stealing money is much smarter than pretending that the problem is Big Tech stealing content. We want Big Tech to make the news easy to find and discuss. We just want them to stop pocketing 30 cents out of every subscriber dollar and 51 cents out of ever ad dollar, and ransoming subscribers' social media subscriptions to extort publishers.

And there's amazing news on this front: a consortium of UK web-publishers called Ad Tech Collective Action has just triumphed in a high-stakes proceeding, and can now go ahead with a suit against Google, seeking damages of GBP13.6b ($17.4b) for the rigged ad-tech market:

https://www.reuters.com/technology/17-bln-uk-adtech-lawsuit-against-google-can-go-ahead-tribunal-rules-2024-06-05/

The ruling, from the Competition Appeal Tribunal, paves the way for a frontal assault on the thing Big Tech actually steals from publishers: money, not content.

This is exactly what publishing should be doing. Targeting the method by which tech steals from the news is a benefit to all kinds of news organizations, including the independent, journalist-owned publishers that are doing the best news work today. These independents do not have the same interests as corporate news, which is dominated by hedge funds and private equity raiders, who have spent decades buying up and hollowing out news outlets, and blaming the resulting decline in readership and profits on Craiglist.

You can read more about Big Finance's raid on the news in Margot Susca's Hedged: How Private Investment Funds Helped Destroy American Newspapers and Undermine Democracy:

https://www.press.uillinois.edu/books/?id=p087561

You can also watch/listen to Adam Conover's excellent interview with Susca:

https://www.youtube.com/watch?v=N21YfWy0-bA

Frankly, the looters and billionaires who bought and gutted our great papers are no more interested in the health of the news industry or democracy than Big Tech is. We should care about the news and the workers who produce the news, not the profits of the hedge-funds that own the news. An assault on Big Tech's monetary theft levels the playing field, making it easier for news workers and indies to compete directly with financialized news outlets and billionaire playthings, by letting indies keep more of every ad-dollar and more of every subscriber-dollar – and to reach their subscribers without paying ransom to social media.

Ending monetary theft – rather than licensing news search and discussion – is something that workers are far more interested in than their bosses. Any time you see workers and their bosses on the same side as a fight against Big Tech, you should look more closely. Bosses are not on their workers' side. If bosses get more money out of Big Tech, they will not share those gains with workers unless someone forces them to.

That's where antitrust comes in. Antitrust is designed to strike at power, and enforcers have broad authority to blunt the power of corporate juggernauts. Remember Article 5 of the FTC Act, the one that lets the FTC block "unfair methods of competition?" FTC Chair Lina Khan has proposed using it to regulate training AI, specifically to craft rules that address the labor and privacy issues with AI:

https://www.youtube.com/watch?v=3mh8Z5pcJpg

This is an approach that can put creative workers where they belong, in a coalition with other workers, rather than with their bosses. The copyright approach to curbing AI training is beloved of the same media companies that are eagerly screwing their workers. If we manage to make copyright – a transferrable right that a worker can be forced to turn over their employer – into the system that regulates AI training, it won't stop training. It'll just trigger every entertainment company changing their boilerplate contract so that creative workers have to sign over their AI rights or be shown the door:

https://pluralistic.net/2024/05/13/spooky-action-at-a-close-up/#invisible-hand

Then those same entertainment and news companies will train AI models and try to fire most of their workers and slash the pay of the remainder using those models' output. Using copyright to regulate AI training makes changes to who gets to benefit from workers' misery, shifting some of our stolen wages from AI companies to entertainment companies. But it won't stop them from ruining our lives.

By contrast, focusing on actual labor rights – say, through an FTCA 5 rulemaking – has the potential to protect those rights from all parties, and puts us on the same side as call-center workers, train drivers, radiologists and anyone else whose wages are being targeted by AI companies and their customers.

Policy fights are a recurring monkey's paw nightmare in which we try to do something to fight corruption and bullying, only to be outmaneuvered by corrupt bullies. Making good policy is no guarantee of a good outcome, but it sure helps – and good policy starts with targeting the thing you want to fix. If we're worried that news is being financially starved by Big Tech, then we should go after the money, not the links.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/06/06/stealing-money-not-content/#content-free

#pluralistic #competition #advertising #surveillance advertising #saving the news from big tech #link taxes #trustbusting #competition and markets authority #uk #ukpoli #Ad Tech Collective Action #digital markets unit #Competition Appeal Tribunal

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sapphicscholar · 10 months

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Hey so remember how I posted yesterday about how it’s not a great idea to be condescending to people assuming the worst about the surveillance state and the role of the internet and tech companies in upholding and enforcing it? Well anyway, here’s an important thread on the House’s Section 702 “reform” bill, scheduled for a floor vote ASAP (as early as Dec. 12), which would be one of the largest expansions of surveillance within the US (accessible text below the images along with links to the linked articles)

Tweet thread from Elizabeth Goitein:

RED ALERT: Buried in the House intelligence committee’s Section 702 “reform” bill, which is schedule for a floor vote as soon as tomorrow, is the biggest expansion of surveillance inside the United States since the Patriot Act. 1/11

Through a seemingly innocuous change to the definition of “electronic service communications provider,” the bill vastly expands the universe of U.S. businesses that can be conscripted to aid the government in conducting surveillance. 2/11

Under current law, the government can compel companies that have direct access to communications, such as phone, email, and text messaging service providers, to assist in Section 702 surveillance by turning over the communications of Section 702 targets. 3/11

Under Section 504 of the House intelligence committee’s bill, any entity that has access to *equipment* on which communications may be transmitted or stored, such as an ordinary router, is fair game. What does that mean in practice? It’s simple… 4/11

Hotels, libraries, coffee shops, and other places that offer wifi to their customers could be forced to serve as surrogate spies. They could be required to configure their systems to ensure that they can provide the government access to entire streams of communications. 5/11

Even a repair person who comes to fix the wifi in your home would meet the revised definition: that person is an “employee” of a “service provider” who has “access” to “equipment” (your router) on which communications are transmitted. 6/11

The bill’s sponsors deny that Section 504 is intended to sweep so broadly. What *is* the provision intended to do, and how is the government planning to use it? Sorry, that’s classified. 7/11

At the end of the day, though, the government’s claimed intent matters little. What matters is what the provision, on its face, actually allows—because as we all know by now, the government will interpret and apply the law as broadly as it can get away with. 8/11

This isn’t a minor or theoretical concern. One of the FISA Court amici posted a blog to warn Americans about this provision. I can’t overstate how unusual it is for FISA Court amici to take to the airwaves in this manner. We’d be foolish to ignore it. https://www.zwillgen.com/law-enforcement/fisa-reform-bill-702-surveillance/ 9/11

If you don't want to have to worry that the NSA is tapping into communications at the hotel where you're staying, tell your House representative to vote NO on the House intelligence bill this week. More on the many flaws with that bill here: https://t.co/i9PEXmg5r6 10/11

Instead, they should vote for the Protect Liberty & End Warrantless Surveillance Act, a bill passed by the House Judiciary Committee on a 35-2 vote that would reauthorize Sec. 702 with strong reforms to protect Americans’ privacy and civil liberties. https://t.co/CN7ZepGSUu 11/11

#us politics #surveillance state expansion #no such thing as too much caution when it comes to privacy in a state or free market that has no incentives to provide it 🙃

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theficpusher · 1 year

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Human Zoo by jaerie | E | 1209 Harry is a hybrid that was captured for display in an isolated country far from home. Someone from his past could be a savior, but he has other plans.

Twenty-Eight by beardyboyzx | M | 1499 "Can't believe you finally caught him," Niall says, clapping him on the back. He's been there with him on his very first mission, when Twenty-Eight was just the first criminal Harry encountered in his spy career to them. or: Agent Harry Styles has finally caught his nemesis, but there's a knot in the plot he's not ready to detangle.

routine surveillance by disgruntledkittenface | E | 2680 Harry’s training period for the Bureau consists of routine surveillance. One night, it becomes a little less routine.

The Night Market by Anonymous | E | 3000 It’s to earn a bit of extra spending money and have a bit of fun while doing it, that’s all. Harry examines his reflection in the mirror as Niall does up the back of his outfit. The clothes he wore on the train here are already safely tucked away in a locker, along with the key to the thick, heavy collar around his neck. The little green light shines from the centre of it, indicating that he’s available.

excuses for adultery by Anonymous | E | 3588 Louis asks for a break from sex, Harry finds a way to get his needs met. Louis finds his way to get revenge.

Knot's Farms by Anonymous | E | 4774 Hybrid travel visas are much stricter than laws for human travel. About twenty more hoops to jump through, and five times the cost. Louis’ proud, so proud of Harry going off on his first big tour, but he’s realistic, too. They would see barely a dime of that money if they had to spend on a hybrid EU visa. So, he’s spending ten days at Knot’s Farms, one of the higher rated hybrid kennel agencies.

the trolley problem by ThereAreOnlySecrets | E | 7350 In front of him are three men of different ages, but with similar distressed looks on their faces. Beaten and bloody, each one tied to a chair. Panicked, Louis backs away from the sight - and straight into a solid, muscled chest. “What - what is this?” “Oh, this is a little problem I thought you could help me with,” Harry murmurs into his ear lightly. “You see, these three men betrayed me, baby. And I want your help in deciding which one to make an example out of. Now, it’s a very simple game. I will put on a ten-minute timer and by the end of the countdown, you will tell me which one of these very distraught and scared men deserves to die. If you don’t choose anyone…Well, then I will kill all three of them.” This is not how Louis thought his day would go. Please let this be a sick, twisted joke...

The Revelation by creamcoffeelou | E | 8373 Harry feels his edges start to unravel. He can’t find where he ends and where Louis begins.

Lick the Knife by larry_hiatus | E | 13303 Three things about Harry: 1. He wants all of his exes dead. 2. He has a blood kink. 3. He’s Louis’ roommate. Three things about Louis: 1. He’s a serial killer. 2. He hates Harry. 3. He also kind of loves him.

#dark fics #lick the knife #the revelation #the trolley problem #Knot's Farms #excuses for adultery #The Night Market #routine surveillance #Twenty-Eight #human zoo #larry_hiatus #creamcoffeelou #ThereAreOnlySecrets #disgruntledkittenface #beardyboyzx #jaerie

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commiepinkofag · 1 year

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TikTok kept tabs on users who watched clips that were tagged under topics such as “LGBT,” short for lesbian, gay, bisexual and transgender, and monitored them for at least a year.

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Social media companies are known to maintain user profiles in order to offer them personalized ads. However, social media platforms are advised not to collect sensitive data like sexual orientation as it has the potential to make users into targets.

lists… tiktok and every other corporation

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monetizeme · 22 days

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In Leak, Facebook Partner Brags About Listening to Your Phone’s Microphone to Serve Ads for Stuff You Mention

"We know what you're thinking. Is this even legal?"

In a pitch deck to prospective customers, one of Facebook's alleged marketing partners explained how it listens to users' smartphone microphones and advertises to them accordingly.

As 404 Media reports based on documents leaked to its reporters, the TV and radio news giant Cox Media Group (CMG) claims that its so-called "Active Listening" software uses artificial intelligence (AI) to "capture real-time intent data by listening to our conversations."

#surveillance capitalism #creepy as fuck #404 media #cox media group #social media #big tech #privacy #ai #artificial intelligence #google #technology #facebook #meta #marketing #advertising

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iliterallydecepticanteven · 2 years

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Even though Mac has no scientific background, I still can't stop myself from imagining her in conversation with some of your OCs, like complaining about Headmaster with Mai or hearing all of Emily's divorce tea. Maybe they meet because Mac inadvertendly tripped the radiation detector where Mai works and sent everything into high alert.

YES I feel like she and Mai would get along well!!!! (I promise I'll make a more fleshed out coherent profile for Mai eventually I'm just super busy). And the radiation thing is totally possible especially since Mai is a chemical engineer and facilities that work with radioactive materials often have detectors at the entrances and exits to ensure you don't track radioactive particles out of the facility. You also have to wear a personal detector in the facility so I can just imagine Mai holding her detector up to Mac, it going off, and then going silent when she pulls it back, and immediately suspecting her of stealing radioactive material from one of the labs (obviously she did not but it takes Mai a while to figure this out since humans aren't usually radioactive).

Unfortunately, Emily finds out Mac is radioactive and doesn't let her within six feet of Alexandria because she's a baby and she doesn't need radiation to stunt her growth. She is willing to give her all the tea from a distance though.

#mai would love to see what kind of shit a radioactive person could do #meanwhile emily makes her sit on the other side of the porch while she bitches about tom #there are multiple different radioactive elements and they all have their own purpose in research #they also all glow different colors #and are varying levels of radioactive #there is also a huge black market for radioactive substances #which is why they have to stay locked up and under close surveillance #sorry to infodump but i love talking about radiation and the different types #my oc mai #joan mai nguyen #my oc emily #lol emily still doesnt have a last name #ill get to that #mackenzie adam

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quixoticanarchy · 2 years

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while a lot of modern technologies have been getting worse (i.e. new phone updates etc aren’t cool and fun anymore insomuch as they just sell you new and better ways to surveil you and mine your data) i am pleased to announce that flip phones these days are actually getting better. i can even watch youtube on it

#which means i can watch my rock operas hehehehe #no social media and not a very good camera but i mean. my smartphone was so dysfunctional i could barely do things anyway #but im sooo impressed w flip phones now they do a lot more than they did in 2013 #without it feeling like every 'feature' is a somewhat sinister marketing or surveillance ploy

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thecubes · 1 year

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the chromium base vs firefox argument on here is so tiring. theyre more or less the same in privacy terms, ESPECIALLY with no settings tweaks and any nonzero amount of extensions. obv the main chrome is worse, but brave browser is objectively more privacy centric than basic firefox lol. chromium fork ≠ evil google spyware

if we're talking decent privacy browsing, firefox is only better than chrome, but only bc it isnt google (and therefore some of your habits are separated from whatever else google knows about you) theres no anti fingerprinting measures and most people install a shitton of uniquely identifying extensions anyway. if using tor is unrealistic/pointless for you (i.e. you do a lot of irl shopping/banking/work /school stuff), mullvad browser is the 2nd best (all the anti fingerprinting measures of the tor browser without running on the onion network) or librewolf gives that firefox feel with slightly better than stock anti fingerprinting measures (providing u dont just install a bunch of useless extensions/turn off all the privacy measures)

there are obviously layers, and using firefox is better than using chrome, but it is kind of ridiculous to say that chrome forks are all as bad as mainline chrome. they aren't, and some are actually more privacy conscious than firefox! wild

#idk how to tag T_T #it also really depends on other privacy measures youve got going on and what you want to achieve from online privacy #those avoiding law/government would need to take stricter measures but most of us just want to avoid mass marketing/surveillance

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nando161mando · 8 months

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Many of the ills of today’s internet have a single thing in common: they are built on a system of corporate surveillance. This Data Privacy & Protection Day, we're calling for a ban on the targeting of ads based on our online behavior.

youtube

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desertrosew · 1 year

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mostlysignssomeportents · 2 months

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FTC vs surveillance pricing

Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

In the mystical cosmology of economics, "prices" are of transcendental significance, the means by which the living market knows and adapts itself, giving rise to "efficient" production and consumption.

At its most basic level, the metaphysics of pricing goes like this: if there is less of something for sale than people want to buy, the seller will raise the price until enough buyers drop out and demand equals supply. If the disappointed would-be buyers are sufficiently vocal about their plight, other sellers will enter the market (bankrolled by investors who sense an opportunity), causing supplies to increase and prices to fall until the system is in "equilibrium" – producing things as cheaply as possible in precisely the right quantities to meet demand. In the parlance of neoclassical economists, prices aren't "set": they are discovered.

In antitrust law, there are many sins, but they often boil down to "price setting." That is, if a company has enough "market power" that they can dictate prices to their customers, they are committing a crime and should be punished. This is such a bedrock of neoclassical economics that it's a tautology "market power" exists where companies can "set prices"; and to "set prices," you need "market power."

Prices are the blood cells of the market, shuttling nutrients (in the form of "information") around the sprawling colony organism composed of all the buyers, sellers, producers, consumers, intermediaries and other actors. Together, the components of this colony organism all act on the information contained in the "price signals" to pursue their own self-interest. Each self-interested action puts more information into the system, triggering more action. Together, price signals and the actions they evince eventually "discover" the price, an abstraction that is yanked out of the immaterial plane of pure ideas and into our grubby, physical world, causing mines to re-open, shipping containers and pipelines to spark to life, factories to retool, trucks to fan out across the nation, retailers to place ads and hoist SALE banners over their premises, and consumers to race to those displays and open their wallets.

When prices are "distorted," all of this comes to naught. During the notorious "socialist calculation debate" of 1920s Austria, right-wing archdukes of religious market fundamentalism, like Von Hayek and Von Mises, trounced their leftist opponents, arguing that the market was the only computational system capable of calculating how much of each thing should be made, where it should be sent, and how much it should be sold for.

Attempts to "plan" the economy – say, by subsidizing industries or limiting prices – may be well-intentioned, but they broke the market's computations and produced haywire swings of both over- and underproduction. Later, the USSR's planned economy did encounter these swings. These were sometimes very grave (famines that killed millions) and sometimes silly (periods when the only goods available in regional shops were forks, say, creating local bubbles in folk art made from forks).

Unplanned markets do this too. Most notoriously, capitalism has produced a vast oversupply of carbon-intensive goods and processes, and a huge undersupply of low-carbon alternatives, bringing the human civilization to the brink of collapse. Not only have capitalism's price signals failed to address this existential crisis to humans, it has also sown the seeds of its own ruin – the market computer's not going to be getting any "price signals" from people as they drown in floods or roast to death on sidewalks that deliver second-degree burns to anyone who touches them:

https://www.fastcompany.com/91151209/extreme-heat-southwest-phoenix-surface-burns-scorching-pavement-sidewalks-pets

For market true believers, these failures are just evidence that regulation is distorting markets, and that the answer is more unregulated markets to infuse the computer with more price signals. When it comes to carbon, the problem is that producers are "producing negative externalities" (that is, polluting and sticking us with the bill). If we can just get them to "internalize" those costs, they will become "economically rational" and switch to low-carbon alternatives.

That's the theory behind the creation and sale of carbon credits. Rather than ordering companies to stop risking civilizational collapse and mass extinction, we can incentivize them to do so by creating markets that reward clean tech and punish dirty practices. The buying and selling of carbon credits is supposed to create price signals reflecting the existential risk to the human race and the only habitable planet known to our species, which the market will then "bring into equilibrium."

Unfortunately, reality has a distinct and unfair leftist bias. Carbon credits are a market for lemons. The carbon credits you buy to "offset" your car or flight are apt to come from a forest that has already burned down, or that had already been put in a perpetual trust as a wildlife preserve and could never be logged:

https://pluralistic.net/2022/03/18/greshams-carbon-law/#papal-indulgences

Carbon credits produce the most perverse outcomes imaginable. For example, much of Tesla's profitability has been derived from the sale of carbon credits to the manufacturers of the dirtiest, most polluting SUVs on Earth; without those Tesla credits, those SUVs would have been too expensive to sell, and would not have existed:

https://pluralistic.net/2021/11/24/no-puedo-pagar-no-pagara/#Rat

What's more, carbon credits aren't part of an "all of the above" strategy that incorporates direct action to prevent our species downfall. These market solutions are incompatible with muscular direct action, and if we do credits, we can't do other stuff that would actually work:

https://pluralistic.net/2023/10/31/carbon-upsets/#big-tradeoff

Even though price signals have repeatedly proven themselves to be an insufficient mechanism for producing "efficient" or even "survivable," they remain the uppermost spiritual value in the capitalist pantheon. Even through the last 40 years of unrelenting assaults on antitrust and competition law, the one form of corporate power that has remained both formally and practically prohibited is "pricing power."

That's why the DoJ was able to block tech companies and major movie studios from secretly colluding to suppress their employees' wages, and why those employees were able to get huge sums out of their employers:

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation

It's also why the Big Six (now Big Five) publishers and Apple got into so much trouble for colluding to set a floor on the price of ebooks:

https://en.wikipedia.org/wiki/United_States_v._Apple_(2012)

When it comes to monopoly, even the most Bork-pilled, Manne-poisoned federal judges and agencies have taken a hard line on price-fixing, because "distortions" of prices make the market computer crash.

But despite this horror of price distortions, America's monopolists have found so many ways to manipulate prices. Last month, The American Prospect devoted an entire issue to the many ways that monopolies and cartels have rigged the prices we pay, pushing them higher and higher, even as our wages stagnated and credit became more expensive:

https://prospect.org/pricing

For example, there's the plague of junk fees (AKA "drip pricing," or, if you're competing to be first up against the wall come the revolution, "ancillary revenue"), everything from baggage fees from airlines to resort fees at hotels to the fee your landlord charges if you pay your rent by check, or by card, or in cash:

https://pluralistic.net/2024/06/07/drip-drip-drip/#drip-off

There's the fake transparency gambit, so beloved of America's hospitals:

https://pluralistic.net/2024/06/13/a-punch-in-the-guts/#hayek-pilled

The "greedflation" that saw grocery prices skyrocketing, which billionaire grocery plutes blamed on covid stimulus checks, even as they boasted to their shareholders about their pricing power:

https://prospect.org/economy/2024-06-12-war-in-the-aisles/

There's the the tens of billions the banks rake in with usurious interest rates, far in excess of the hikes to the central banks' prime rates (which are, in turn, justified in light of the supposed excesses of covid relief checks):

https://prospect.org/economy/2024-06-11-what-we-owe/

There are the scams that companies like Amazon pull with their user interfaces, tricking you into signing up for subscriptions or upsells, which they grandiosely term "dark patterns," but which are really just open fraud:

https://prospect.org/economy/2024-06-10-one-click-economy/

There are "surge fees," which are supposed to tempt more producers (e.g. Uber drivers) into the market when demand is high, but which are really just an excuse to gouge you – like when Wendy's threatens to surge-price its hamburgers:

https://prospect.org/economy/2024-06-07-urge-to-surge/

And then there's surveillance pricing, the most insidious and profitable way to jack up prices. At its core, surveillance pricing uses nonconsensually harvested private information to inform an algorithm that reprices the things you buy – from lattes to rent – in real-time:

https://pluralistic.net/2024/06/05/your-price-named/#privacy-first-again

Companies like Plexure – partially owned by McDonald's – boasts that it can use surveillance data to figure out what your payday is and then hike the price of the breakfast sandwich or after-work soda you buy every day.

Like every bad pricing practice, surveillance pricing has its origins in the aviation industry, which invested early on and heavily in spying on fliers to figure out how much they could each afford for their plane tickets and jacking up prices accordingly. Architects of these systems then went on to found companies like Realpage, a data-brokerage that helps landlords illegally collude to rig rent prices.

Algorithmic middlemen like Realpage and ATPCO – which coordinates price-fixing among the airlines – are what Dan Davies calls "accountability sinks." A cartel sends all its data to a separate third party, which then compares those prices and tells everyone how much to jack them up in order to screw us all:

https://profilebooks.com/work/the-unaccountability-machine/

These price-fixing middlemen are everywhere, and they predate the boom in commercial surveillance. For example, Agri-Stats has been helping meatpackers rig the price of meat for 40 years:

https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy

But when you add commercial surveillance to algorithmic pricing, you get a hybrid more terrifying than any cocaine-sharks (or, indeed, meth-gators):

https://www.nbcnews.com/news/us-news/tennessee-police-warn-locals-not-flush-drugs-fear-meth-gators-n1030291

Apologists for these meth-gators insist that surveillance pricing's true purpose is to let companies offer discounts. A streaming service can't afford to offer $0.99 subscriptions to the poor because then all the rich people would stop paying $19.99. But with surveillance pricing, every customer gets a different price, titrated to their capacity to pay, and everyone wins.

But that's not how it cashes out in the real world. In the real world, rich people who get ripped off have the wherewithal to shop around, complain effectively to a state AG, or punish companies by taking their business elsewhere. Meanwhile, poor people aren't just cash-poor, they're also time-poor and political influence-poor.

When the dollar store duopoly forces all the mom-and-pop grocers in your town out of business with predatory pricing, and creating food deserts that only they serve, no one cares, because state AGs and politicians don't care about people who shop at dollar stores. Then, the dollar stores can collude with manufacturers to get shrunken "cheater sized" products that sell for a dollar, but cost double or triple the grocery store price by weight or quantity:

https://pluralistic.net/2023/03/27/walmarts-jackals/#cheater-sizes

Yes, fliers who seem to be flying on business (last-minute purchasers who don't have a Saturday stay) get charged more than people whose purchase makes them seem to be someone flying away for a vacation. But that's only because aviation prices haven't yet fully transitioned to surveillance pricing. If an airline can correctly calculate that you are taking a trip because you're a grad student who must attend a conference in order to secure a job, and if they know precisely how much room you have left on your credit card, they can charge you everything you can afford, to the cent.

Your ability to resist pricing power isn't merely a function of a company's market power – it's also a function of your political power. Poor people may have less to steal, but no one cares when they get robbed:

https://pluralistic.net/2024/07/19/martha-wright-reed/#capitalists-hate-capitalism

So surveillance pricing, supercharged by algorithms, represent a serious threat to "prices," which is the one thing that the econo-religious fundamentalists of the capitalist class value above all else. That makes surveillance pricing low-hanging fruit for regulatory enforcement: a bipartisan crime that has few champions on either side of the aisle.

Cannily, the FTC has just declared war on surveillance pricing, ordering eight key players in the industry (including capitalism's arch-villains, McKinsey and Jpmorgan Chase) to turn over data that can be used to prosecute them for price-fixing within 45 days:

https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-issues-orders-eight-companies-seeking-information-surveillance-pricing

As American Prospect editor-in-chief David Dayen notes in his article on the order, the FTC is doing what he and his journalistic partners couldn't: forcing these companies to cough up internal data:

https://prospect.org/economy/2024-07-24-ftc-opens-surveillance-pricing-inquiry/

This is important, and not just because of the wriggly critters the FTC will reveal as they use their powers to turn over this rock. Administrative agencies can't just do whatever they want. Long before the agencies were neutered by the Supreme Court, they had strict rules requiring them to gather evidence, solicit comment and counter-comment, and so on, before enacting any rules:

https://pluralistic.net/2022/10/18/administrative-competence/#i-know-stuff

Doubtless, the Supreme Court's Loper decision (which overturned "Chevron deference" and cut off the agencies' power to take actions that they don't have detailed, specific authorization to take) will embolden the surveillance pricing industry to take the FTC to court on this. It's hard to say whether the courts will find in the FTC's favor. Section 6(b) of the FTC Act clearly lets the FTC compel these disclosures as part of an enforcement action, but they can't start an enforcement action until they have evidence, and through the whole history of the FTC, these kinds of orders have been a common prelude to enforcement.

One thing this has going for it is that it is bipartisan: all five FTC commissioners, including both Republicans (including the Republican who votes against everything) voted in favor of it. Price gouging is the kind of easy-to-grasp corporate crime that everyone hates, irrespective of political tendency.

In the Prospect piece on Ticketmaster's pricing scam, Dayen and Groundwork's Lindsay Owens called this the "Age of Recoupment":

https://pluralistic.net/2024/06/03/aoi-aoi-oh/#concentrated-gains-vast-diffused-losses

For 40 years, neoclassical economics' focus on "consumer welfare" meant that companies could cheat and squeeze their workers and suppliers as hard as they wanted, so long as prices didn't go up. But after 40 years, there's nothing more to squeeze out of workers or suppliers, so it's time for the cartels to recoup by turning on us, their customers.

They believe – perhaps correctly – that they have amassed so much market power through mergers and lobbying that they can cross the single bright line in neoliberal economics' theory of antitrust: price-gouging. No matter how sincere the economics profession's worship of prices might be, it still might not trump companies that are too big to fail and thus too big to jail.

The FTC just took an important step in defense of all of our economic wellbeing, and it's a step that even the most right-wing economist should applaud. They're calling the question: "Do you really think that price-distortion is a cardinal sin? If so, you must back our play." Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

https://clarionwriteathon.com/members/profile.php?writerid=293388

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/07/24/gouging-the-all-seeing-eye/#i-spy

#pluralistic #gouging #ftc #surveillance pricing #dynamic pricing #efficient market hypothesis brain worms #administrative procedures act #chevron deference #lina khan #price gouging

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