This paper – which can be found here – seeks to address an imbalance: while it “has become commonplace, especially in the media and technology industries, to speak of an “attention economy” and of competition in “attention markets” (…)the study of “attention markets” has only very recently become of interest to legal scholars, and only in connection with specific cases (…)”. This paper is “an effort to close that gap, and show why a better understanding of attentional markets will be critical to addressing pressing legal issues, such as antitrust’s treatment of the high technology industry and emerging public policy questions surrounding the “theft” of attention from captive audiences.”

The fulcrum of the analysis is the “attention broker” – someone who “attracts attention by offering something to the public and then reselling that attention to advertisers for cash”, such as Google, Facebook or, more prosaically, TV channels and free subway newspapers. The author contends that the concept of “Attention Brokers” can prove useful for antitrust analysis. At the moment, media and technology industries are dominated by large companies, and yet antitrust agencies have struggled  to come up with analyses that are able to assess the pro- and anti-competitive effects of their activities. “The focus on Attention Brokers makes possible an analysis based on the “attentional markets” that weighs “time spent” as the appropriate means of measuring the question of market power.

The paper is structured as follows:

  • Part I introduces the concept of attention, and relies mainly on the scientific literature (which includes a reference to one of my favourite videos of all time, “Counting the Amount of Times a Ball was Passed” – see https://wwyoutube.com/watch?v=vJG698U2Mvo. The answer to this video, if you want to know, is that I did not). The main takeaway from this section seems to be that “attention can be seized in an involuntary fashion.”
  • Part II describes the economic and legal scholarship on attention and related topics. This includes literature on: (i) the economics of time (i.e. opportunity costs); (ii) the economics of advertising and marketing; and (iii) Herbert Simon’s (of bounded rationality fame) work on attention. Concerning antitrust, most work on attention is rather recent and mainly undertaken by economists in the context of, or following antitrust investigations in the United States and Europe directed at prominent Attention Brokers – with Google foremost among them.
  • Part III develops the concept of the Attention Broker and if competition in attentional markets. It is the crux of the article, so it is worth devoting a bit more attention to it.

Attention is said to have two main characteristics: (1) limited supply, and (2) constant spending. While one could use these basic units as equivalent to price in a market definition model, this model must be qualified. In particular, the model assumes that everyone’s attention is worth roughly the same; and that access to all mental-states should be valued equally. None of these assumptions is realistic.

A second step of the analysis is to explain what Attention Brokers are – i.e.  businesses that rely solely on the resale of attention to make money. Attention Brokers can also be described as specialized versions of platform intermediaries in two-sided markets. The most important specificity in this regard is that, unlike typical two-sided markets such as credit cards, Attention Brokers sit  at the juncture between markets with different currencies — money on the one side, and attention on the other. However, like other platforms in two-sided markets, an Attention Broker usually has to make two key price-setting decisions. On one side of the market,  the broker sets the price of the service or good meant to attract the audience to be resold (which in many, but not all cases will be zero). On the other side of the market, it sets its advertising rates depending on its audience, the perceived desirability of that audience, and finally, some sense of the quality of their attention. At this point, the article pursues a somewhat meandering description of various pricing strategies adopted by Attention Brokers, which will not be reviewed here (but that include the observation that strategies entailing the provision of services for free / below cost / without advertising, typical in many digital markets, are ultimately a form of predatory pricing used to achieve critical mass / market power).

  • Part IV goes into the legal implications of the previous analysis for antitrust and the protection of captive audiences. For obvious reasons, I’ll focus strictly on antitrust.

The basic argument here is that the tools currently employed to try and understand competitive effects in the new economy are greatly hindered by a lack of appreciation for attention markets, which is where many of the relevant actors in fact compete. Regarding market power and market definition, in virtually all antitrust cases these key questions are addressed by focusing on markets effects on prices. This paper suggests that in some cases, particularly in the technology-media space, regulators should be focusing on attentional markets as opposed to money markets to understand the real effects of certain practices on competition.  The author then looks at a few practical examples of this – including the OFT’s decision to clear the Facebook/Instagram merger, which he considers “in retrospect, [to be] riddled with errors and absurdities”. He is particularly critical of the OFT’s conclusion that these apps were not competitors, since “while they were not competing on price, (yet), they were competing for another metric: “time on site.” (additionally, Facebook is said to have neutralised its greatest competitor in mobile ecosystems at the time without a peep from the authorities).

This leads to the development of a metric which is argued to be superior to price when assessing the practices of companies which compete for attention in order to sell it to advertisers: ““time on site.” [Agencies] can then assess the consequences [of a merger] for competition by determining the projected market power of the combined companies not in terms of dollars spent, but in terms of the total hours spent with each application, as compared to the hours spent with social media in total. And while the approach is not without measurement challenges, those challenges are moderated by the fact that these are companies whom, by their business models, keep enormous amounts of data on how their users spend their time and attention.

The author notes that this approach may be challenged because it is unclear how to define the market based on consumer substitutability. Yet, he holds that the essential question is whether the products are viewed by consumers as substitutes, though not for the spending not of cash but of time and attention. This is in line with traditional price-based market definition. Nonetheless, it is acknowledged that we need better ways to test substitutability in attentional markets, and that work must be done on this.

  • The paper then concludes (the antitrust section) by arguing that: “As it stands, the major antitrust agencies do not have a handle on competition in the attention economy, and without one, they will be unable to, in a useful way, protect the public against undue consolidation, without hindering or preventing those mergers which benefit the public.

This is an interesting paper – and, as would be expected from the only antitrust scholar I know who regularly writes for the New Yorker (and who coined the expression “net neutrality”), it is a pleasure to read. Even though it builds on Wu’s primary concerns about the protection of freedom of expression – and of neutral communication mechanisms that promote the diversity of ideas – his points about antitrust strike me as valid.

Furthermore, the paper is an expression of a larger underlying issue that the new economy has brought to the forefront: the importance of non-price parameters of competition. “As numerous critics have written, antitrust has become “price-fixated” or “price-centric. That is to say, it faces great difficultly addressing forms of competition that do not turn on providing a cheaper product, and also has difficultly addressing harm that amounts to something other than the raising of prices to consumers. Unfortunately, as the economy gets more complex, these are hardly the only forms of competition or harm.” The paper thus attempts to both argue for a move away from a focus on price, and  to provide a hook on which to hang a non-price analysis in certain markets. It is doubtful that the approach is fully successful: it works only for specific markets where attention is traded for advertising; identifying markets and market power are, to say the least, a challenge under this approach; and I cannot see how, exactly, one would identify an anticompetitive practice on this basis – nor, I suspect, does the author, given his focus on mergers throughout the paper. Having said that, the author may be on to something, and these difficulties are, to a greater or lesser extent, endemic to all (or almost all) non-price parameters of competition.

In short, a highly recommended (and readable) paper

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