I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here’s the PDF, but I have also pasted the entire thing down below.
_____________________________
A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
Google today unveiled the Data Liberation Front, a team of engineers in Chicago dedicated to ensuring that Google build “liberated products”—ones that have “built in features that make it easy (and free) to remove your data from the product in the event that you’d like to take it elsewhere.” We’ve spent a lot of time here warning about the dangers of Googlephobia, but now that Google has brazenly appropriated the TLF’s unique mock-Communist iconography, we’re starting to think that Jeff Chester and Scott Cleland may be right: Maybe Google really is trying to take over the world!
So we regret to announce our filing of a lawsuit in the Twelfth Circuit Court of Appeals to challenge Google’s infringement of our mark. We demand 50% of the $0.00 Google earns every time they “allow” users to port their application data out of Google to a competitor’s services! We will, of course, dedicate these royalties to the important project of educating and empowering users about how they can determine their own destiny online.
But seriously… We heartily agree with our Data Liberation Front comrades that users should be fully empowered to switch from one service to another online. This kind of competition is clearly the best protection for consumers in the Digital Age. Making switching easy should assuage not just antitrust concerns, but also concerns about how much privacy or security each web service offers to its users, no matter how big its market share: If you don’t like what a service offers, just take your data and leave! Who needs the government micro-managing the Internet when users have that kind of control?
Viva la (Technology) Revolution!
P.S. In case you haven’t seen it the Monty Python video we’re all riffing on:
Continue reading →
Sometimes the most revealing conversations about policy issues happen with our loved ones at the breakfast table. Although loyal TLF readers may remember my partner Michael as my “Posterboy for Advertising’s Pro-Consumer Quid Pro Quo,” he doesn’t usually get into the policy issues I cover. But this morning, we fell into a conversation about the bitterly contentious issue of marketing to kids:
Michael: Growing up in South Korea, on a military base, we didn’t have any commercials on television. We had three channels and all they showed was public service announcements.
Sounds like paradise for anti-advertising zealots like Jeff Chester and the media reformistas who want to re-create the old media scarcity in the name of “media democracy“! Anyway:
We moved back to the U.S. when I was nine, and suddenly, during all my favorite cartoons, there were ads for toys. It was exciting—and more than a little bit overwhelming! It wasn’t just that I wanted these toys; it was that felt this incredible sense of urgency: I thought we had to go get the toys right now or they’d be gone!
What did Rousseau call his innocent man, the Noble Savage? That’s what we were: The noble savage, coming into this world of sophisticated toy advertisements.
But it didn’t take long for me to get over this initial bewilderment. My parents explained to me that we didn’t really have to go to the store right away. (They also explained to me that I couldn’t haggle with the staff at Toys ‘R Us the same way I’d haggled with street vendors back in Korea—something that utterly mystified the staff.) After one trip to Toys Toys ‘R Us, I got the toys I wanted most and, over the next few months, realized that they weren’t anywhere near as exciting as I had imagined.
After that, I enjoyed the toy ads on TV, but I lost interest in many of the toys I already had, preferring to create my own toys or play outside.
I explained that advertising of toys to kids has long been the cause celebre of anti-advertising crusaders:
Michael: But kids are acquisitive, too! How are they supposed to know about the latest toys if you can’t advertise to them? And what’s the big deal, anyway? I got used to toy ads and I think most kids would, too. The thing that’s different is incentive programs at stores.
Continue reading →
I noted yesterday that a coalition of self-styled “privacy advocates” chose Monday, September 1, to launch an all-out attack on online advertising—which happened to be 70 years to the day after the start of World War II. Since the term “Privacy War” has been used since the late 90s as a catch-all for the battle of ideas about whether and how to regulate online data collection (especially for advertising ), I found it noteworthy that a second round of the “Privacy Wars” had commenced on the anniversary of World War II.
The parallels are striking: Both World War I and Privacy War I (~95-2001) ended in settlements that left many combatants seething with the desire for revenge, followed by a period of rising tensions that ultimately erupted into another full-blown conflict. But most striking was the fact that World War II began with a bang (the German invasion of Poland) followed by eight months of inaction—the sitzkrieg or “sitting war”—before the Battle of France. I expect we are in precisely the same situation now in the Privacy Wars: a rhetorical “war” to be followed by awkward delay before the eventual introduction of legislation on the Hill. I also noted that:
What Churchill said of the debt owed by the British people to the heroic airmen of the RAF during the Battle of Britain could be said about online advertising over the last decade: “Never was so much owed by so many to so few.” Never before has advertising done so much good for consumers in funding innovation and creativity on so broad a scale for so many. Yet never before has advertising been so reviled in Washington as now.
I bent over backwards to emphasize that, in noting these historical parallels, I was “not actually comparing the coalition to Hitler” and that such comparisons (the Reductio ad Hitlerium or Godwin’s Law) are “surely the dirtiest rhetorical trick in the book.” Despite this disclaimer, Jeff Chester, who has fought a personal war against advertising for over three decades, has has seized this opportunity to distract from the real issues at stake in this battle of ideas about the future of the Internet—just as he’s repeatedly questioned the motives of those who challenge him. So before Jeff uses this as a political/fundraising stunt by putting out a press release ascribing insensitivity to the Holocaust to those who question whether crippling online advertising would really be good for consumers, let me make this clear:
- Again, I did not mean to draw a moral equation between the critics of advertising to the Nazis, only to point out the historical parallels in how these conflicts unfolded.
- I certainly understand why any analogy to World War II is sensitive. My own great-grandfather was among the first to be rounded up and put in a concentration camp when Hitler took power. He survived, but left the camp a broken man, and the lives of my grandmother and, through her, my father were changed forever by the experience.
So, if my historical comparison or use of the alliterative title “Attack of the Anti-Advertising Axis” legitimately offended others who aren’t just looking for an excuse to squelch dissent, I readily apologize. I’ll be even more sorry if Chester succeeds in twisting this contrived controversy of political correctness to further his own radical agenda of promoting sweeping preemptive Internet regulation over the real solutions to concerns about online privacy: educating and empowering users to choose for themselves.
Note the disclaimer below, emphasized here
Seventy years ago yesterday, German troops invaded Poland. Thus began World War II—after twenty years of rising tension in Europe. For the next eight months, the world sat waiting for the other shoe to drop—the sitzkrieg (literally “sitting war”) or “Phoney War,” as the English dubbed it. Finally, Germany invaded France and the Low Countries in May 1940 and the real war in Europe had begun.
In an eerie coincidence, yesterday also marked the beginning of Privacy War II: A coalition of ten “privacy and consumer advocacy” groups launched an attack of their own against targeted advertising, calling for sweeping preemptive privacy regulation to stop the much-dreaded “behavioral advertising” (customizing online ads to consumers likely interests based on “tracking” the websites they visit). This war rests on a much-repeated, but little-examined rhetorical fiction (much as the German invasion of Poland was justified by a staged “Polish” attack on a German radio station near the border): Consumers are in dire peril if government does not act to protect them from… what, exactly?
What Churchill said of the debt owed by the British people to the heroic airmen of the RAF during the Battle of Britain could be said about online advertising over the last decade: “Never was so much owed by so many to so few.” Never before has advertising done so much good for consumers in funding innovation and creativity on so broad a scale for so many. Yet never before has advertising been so reviled in Washington as now.
No, I’m not actually comparing the coalition to Hitler [I've added the emphasis here since many readers seem to have missed this disclaimer, and followed up with a re-emphasis here] (surely the dirtiest rhetorical trick in the book), despite my tongue-in-cheek title. But I would be remiss as an armchair historian for not pointing out the significant parallels between the pattern of the World Wars and the Privacy Wars. Whether one wants to say that the “opening shot” of Privacy War II was fired yesterday or at one of the hearings or FTC Town Hall meetings held over the last two years, we clearly are in a sitzkrieg phase of this great Conflict of Visions over information, the great currency of the online economy: The shooting has started, but the real battle won’t start until Chairman Boucher actually introduces his much-anticipated legislation. Continue reading →
A coalition of ten self-described “consumer and privacy advocacy organizations” today demanded legislation that would restrict the collection and use of data online for customizing advertising based on Internet users’ interests. I’ll have more to say on this but here are my initial comments:
These so-called “consumer advocates” are actually anti-consumer elitists. Not only do they presume that consumers are too stupid or lazy to make their own decisions about privacy, but they ignore the benefits to consumers: more relevant advertising plus more and better content.
Advertising has been the “mother’s milk” of media in America since colonial times and the future of media depends on the ability of publishers to replicate that revenue model online. Micropayments, donations, subscriptions alone simply can’t fund a vibrant marketplace of ideas. Only personalized advertising can sustain publishers through the Digital Revolution.
Regulatory advocates haven’t demonstrated any harm to consumers that would justify such sweeping preemptive regulation. By strangling funding for new media, such regulations would amount to an “Industrial Policy” for the Internet. Instead, policymakers should focus on educating consumers and empowering them by promoting development of better privacy management tools.
Mediapost has published an interview I gave to Omar Tawakol, founder of the BlueKai registry entitled “User Empowerment, Not Regulation, Is The Answer to Privacy Concerns About Targeted Ads” in which I summarize the arguments Adam Thierer and I have been making since our “Principles to Guide the Debate” piece last September.
We argue for user empowerment over restrictive defaults (like “opt-in”) for data use and collection because, as the Supreme Court held in 2000: “Technology expands the capacity to choose; and it denies the potential of this revolution if we assume the Government is best positioned to make these choices for us.”
We promote tools that let users make their own decisions about privacy, not only because those decisions are fundamentally subjective, but because regulatory mandates could stifle the development of online content and commerce.
I also note the parallels between speech controls and privacy regulation, and call for a consistent, principled approach to both:
Since 1997, the Supreme Court has struck down multiple legislative attempts to censor online and offline content [especially the CDA] because there were “less restrictive alternatives” that would not so heavily burden free speech rights. In a 2000 cable-related decision, the Court held that “targeted blocking [by users] is less restrictive than banning, and the Government cannot ban speech if targeted blocking is a feasible and effective means of furthering its compelling interests.”
Courts have struck down other federal and state speech controls because parents had the tools to filter their kids’ access to information online, in video games, etc., as described in my PFF colleague Adam Thierer’s ongoing catalog of these tools…
Many who oppose industry self-regulation are not really “consumer advocates” because they don’t recognize that consumers have many, competing values. Those regulatory advocates are more interested in their preferred one-size-fits-all mandates than in empowering users to determine their own privacy preferences.
Like advocates of censorship, privacy zealots assert great dangers to which citizens are supposedly oblivious but which urgently require government intervention-dismissing arguments to the contrary as either uninformed or irresponsible.
The comments on the interview are equally worth reading. Jeff Chester, who has made a career out of attacking advertising, quickly posted a comment dismissing, but ignoring, my arguments about consumer welfare as corporate propaganda—just as he did with his comment on the post Adam and I wrote in June about congressional hearings on the issue featuring Chester (and Scott Cleland, the right-wing “Bizarro Chester“). I’ve had it with Chester’s ad hominem attacks on the motives of those who disagree with him, as I explained in my reply to Chester: Continue reading →
by Berin Szoka & Adam Thierer
This morning, the House Energy & Commerce Committee will hold a hearing on “Behavioral Advertising: Industry Practices And Consumers’ Expectations.” If nothing else, it promises to be quite entertaining: With full-time Google bashers Jeff Chester and Scott Cleland on the agenda, the likelihood that top Google officials will be burned in effigy appears high!
Chester, self-appointed spokesman for what one might call the People for the Ethical Treatment of Data (PETD) movement, is sure to rant and rave about the impending techno-apocalypse that will, like all his other Chicken-Little scenarios, befall us all if online advertisers were permitted to better tailor ads to consumers’ liking. After all, can you imagine the nightmare of less annoying ads that might actually convey more useful information to consumers? Isn’t serving up “untargeted” dumb banner ads for Viagra to young women and Victoria’s Secret ads to Catholic school kids the pinnacle of modern online advertising? Gods forbid we actually make advertising more relevant and interest-based! (Those Catholic school boys may appreciate the lingerie ads, but few will likely buy bras.)
Anyway, according to National Journal’s Tech Daily Dose, the hearing lineup also includes:
- Charles Curran, Executive Director, Network Advertising Initiative
- Christopher Kelly, Chief Privacy Officer, Facebook
- Edward Felten, Director, Center for IT Policy, Princeton University
- Anne Toth, Chief Privacy Officer & Vice President, Policy, Yahoo!
- Nicole Wong, Deputy General Counsel, Google
That’s an interesting group and we’re sure that they will say interesting things about the issue. Nonetheless, because four of them have a corporate affiliation that fact will inevitably be used by some critics to dismiss what they have to say about the sensibility of more targeted or interest-based forms of online advertising. So, we’d like to offer a few thoughts and pose a few questions to make sure that Committee members understand why, regardless of what it means for any particular online operator, targeting online advertising is very pro-consumer and essential to the future of online content, culture, and competition. As Wall Street Journal technology columnist Walt Mossberg has noted, “Advertising is the mother’s milk of all the mass media.” Much of the “free speech” we all cherish isn’t really free, but ad-supported!
Continue reading →
Comments 
Posted in: Media Regulation 
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
