1. Not really sure I agree about "winner takes all" - Facebook bought IG, Whatsapp and dozens of other companies. That's not winning based off product superiority - it's winning based off access to financing. There are plenty of ways to stop companies from ever reaching that size - Limit M&A, limit the amount of hot money used to finance growth ahead of revenue, and impose stricter regulations on larger companies - I'm talking investigating violations and prosecuting civilly and criminally - no compliance BS.
2. I'm not going to explain the Safe Harbor provision to you. Look it up. We already have externalities - removing algorithmic feeds would take (e.g. Facebook) back to where it was in the late 2000s, where users were in control of the content they saw. The only negative externality is that Facebook and other companies would make less money of targeted ads.
3. You've never heard of a transaction tax? I find that hard to believe. Why don't you think about other times you've paid tax on a transaction, and then maybe you can come up with answers to the rest of your questions.
1. Facebook already had 1 billion MAU in 2012, the year it acquired Instagram. How would you limit M&A? Won't that really hurt the startup ecosystem if you use the state to close off one of the paths to an exit? How do you propose limiting 'hot money' to finance growth ahead of revenue? Are you proposing getting rid of venture capital?
2. I'm familiar with safe harbor provisions, but am asking you for more specifics. Many sites/app personalize content (aka algorithmic content feeds) for the user, based off of what will drive engagement. I understand you dislike Facebook, but if you attack Facebook for personalization, how do you not hurt everybody else that is trying to cater experiences to what their users are likely to want?
3. What's the transaction in your proposal? Who is getting taxed? There are multiple actors in the advertising system, from advertisers to ad networks to publishers to website visitors. Your glib response is a signal to me that perhaps you haven't had much in the weeds exposure to how advertising functions, and may be operating from more of a mainstream mood affiliation perspective. Which is fine, but you answered a question to someone's query for 'good ideas' for regulation.
1. Without serious competition we will never know if their waning mainstream popularity would have diminished their financial success.
Limit M&A by denying acquisitions that would consolidate markets, like we did for a long time in this country. You don’t have to hurt startups if you have a little bit of creativity. Create different tiers of review, etc.
You cut down on hot money by reinstating the firewall between commercial banking/insurance and investment banking. It’s not getting rid of venture capital, but it does restrict the amount of money that can be levered by them.
2. Im not worried about hurting businesses that focus on algorithmic content. If their algorithms are feeding right wing propaganda to impressionable people I want them to go out of business.
3. An ad auction is no different than any other financial contract that gets sold on an exchange. The buyer sells a contract for placement, which an advertiser buys in exchange for a promise to pay. You levy a tax on this transaction to make the overall cost of doing it more expensive and to offset the cost of externalities created. I’ve thought through it plenty, but since it doesn’t feel like you aren’t asking questions in good faith or doing the least bit of research, I’m not going to bother taking you particularly serious.
2. You dislike algorithms that feed right wing propaganda to people. What about left wing propaganda? What about sites that don't feed right wing propaganda? How would you craft rules that address what you see as the problem? The devil is in the details. I totally get you want to attack Facebook and its ilk, but regulation can entrench the incumbents and reduce competition if not thought through.
3. Thanks for answering the question this time. So advertisers are getting taxed, which will increase the cost of advertising for companies seeking to drive awareness for their products. Some potential effects of this:
* It raises the cost of advertising. This means that you'll need higher margins for the increased cost of advertising to make sense as an advertiser. Given the higher cost/margin requirement, you may see smaller advertisers drop-off, having the potential to reducing competition in different markets. This would be a good thing for big companies/incumbents.
* Depending on the size of the tax, it could put upward pressure on prices elsewhere, as businesses attempt to maintain their margins and account for the increased marketing costs.
* Tax collection will add a new operational cost for ad networks. Google and Facebook, given their size and profitability will be able to deal with this cost easier than most.
* If it reduces total ad revenue for publishers, you'll likely see a bunch of smaller companies go out of business that depend on ad revenue. Smaller and local news/content sites will be hurt, leaving fewer sources, and further entrenching the major news companies. Ad revenue models by their nature promote strategies to appeal to the widest audience possible, in order to maximize impressions/engagement. The alternative model in news (just to use as an example) is subscription, which doesn't have that same incentive. The incentive is to maximize paying customers. In some niche areas you may likely see higher quality (which we already see today). But some of the downsides are: less privileged people won't have access to the same information that they may have previously, increased polarization & bubbles as publishers cater to exactly what their paying customers want to hear (and thus continue paying for).
> I totally get you want to attack Facebook and its ilk, but regulation can entrench the incumbents and reduce competition if not thought through.
They're already entrenched. What exactly are you worried about? You are just playing the devils advocate without actually having a point.
> It raises the cost of advertising.
Huge assumption that nothing better takes the place of algorithmic CPC-based advertising, or that a marketplace based entirely on ad-driven consumption is even desirable. It's not even worth discussing the rest of the speculation, because I reject the premise. The well-being of these ad-networks is no where near the top of my priorities list.
2. I'm not going to explain the Safe Harbor provision to you. Look it up. We already have externalities - removing algorithmic feeds would take (e.g. Facebook) back to where it was in the late 2000s, where users were in control of the content they saw. The only negative externality is that Facebook and other companies would make less money of targeted ads.
3. You've never heard of a transaction tax? I find that hard to believe. Why don't you think about other times you've paid tax on a transaction, and then maybe you can come up with answers to the rest of your questions.