Blind Spot: The Attention Economy and the Law

• Author: Tim Wu
• Position: Julius Silver Professor of Law, Columbia University
• Pages: 771-806

BLIND SPOT:

THE ATTENTION ECONOMY AND THE LAW

T

IM

W

U

*

Human attention, valuable and limited in supply, is a resource. It has be-

come commonplace, especially in the media and technology industries, to

speak of an “attention economy” and of competition in “attention markets.”

1

There is even an attentional currency, the “basic attention token,” which pur-

ports to serve as a medium of exchange for user attention.

2

Firms like

Facebook and Google, which have emerged as two of the most important

firms in the global economy, depend nearly exclusively on attention markets

as a business model.

3

Yet despite the well-recognized commercial importance of attention mar-

kets, antitrust and consumer protection authorities have struggled when they

encounter the attention economy.

4

Antitrust agencies, tasked with assessing

the effects of mergers and controlling anticompetitive behavior, seem to lack a

way to understand the market dynamics when the firms offer “free products”

that are actually competing for attention.

5

Meanwhile, those tasked with con-

sumer protection have no good paradigm for dealing with attentional intru-

sions stemming from non-consensual, intrusive advertising or debates over the

use of telephones on airlines.

This essay aims to provide a legal and economic analysis to help face the

challenges here described. In other work, I have described the rise and spread

* Julius Silver Professor of Law, Columbia University. My thanks to participants at the Co-

lumbia faculty retreat, the Jevons group meeting, the Silicon Flatirons conference, and to George

Andreou, David Evans, Philip Bobbitt, Scott Hemphill, and Bert Huang, and to research assist-

ants Josh Obear, Zoe Carpou, and Janice Lee.

1

See, e.g., Mathew Ingram, The Attention Economy and the Implosion of Traditional Media,

F

ORTUNE

(Aug. 12, 2015), fortune.com/2015/08/12/attention-economy/.

2

See B

ASIC

A

TTENTION

S

OFTWARE

, Basic Attention Token (BAT) Blockchain Based Digital

Advertising (Mar. 13, 2018), basicattentiontoken.org/index/BasicAttentionTokenWhitePaper-

4.pdf.

3

See infra Part II.A.

4

See infra Parts I.A, III.A, III.B.

5

See infra Part III.A.

771

82 Antitrust Law Journal No. 3 (2019). Copyright 2019 American Bar Association. Reproduced

by permission. All rights reserved. This information or any portion thereof may not be copied

or disseminated in any form or by any means or downloaded or stored in an electronic

database or retrieval system without the express written consent of the American Bar

Association.

772

A

NTITRUST

L

AW

J

OURNAL

[Vol. 82

of the “attention industry,” the businesses that depend on the resale of atten-

tion, a global industry with an annual revenue of approximately $500 billion.

6

This essay builds on that work by focusing on the economic decisions implicit

in “Attention Brokerage.” As described here, brokerage is the resale of human

attention. It is to attract attention by offering something to the public (en-

tertainment, news, free services, and so on), and then reselling that attention to

advertisers for cash. Examples of pure Attention Brokers include social media

companies like Instagram and Facebook, search engines like Google or Bing,

ad-supported publishers like Buzzfeed or AM News, and some television

channels like CBS or NBC. The Brokers’ activities are critical to the opera-

tion of attention markets, for the business model creates much of the competi-

tion for attention that this essay describes.

7

This approach offers new promise for the antitrust law and some of the

challenges it confronts in the attention economy. Markets and market defini-

tion are central to contemporary antitrust law, and this essay offers a new

approach to the definition of attention markets in cases where enforcers and

courts may otherwise become confused by the presence of a “free” product or

by two-sided market analysis.

8

It suggests defining the relevant consumer

markets based on “time spent” (or just “time”) as the currency, and then mak-

ing use of the familiar economic concept of substitution to find an appropriate

market. And so, for example, in a case centered on online mapping products,

an enforcement agency may ask whether products like Google Maps, Waze,

and Apple Maps are, in fact, substitutes for each other in attention markets.

The law can then address appropriate market definition by asking whether

other products, like streaming video, compete for the same attention as online

maps. That makes possible the use of an “Attentional Small but Significant

and Non-Transitory Increase in Price” test, or “A-SSNIPS” test as an aid to

finding the appropriate market definition for consumer markets.

The implications of this essay are not merely theoretical. Armed with a

better analysis, it would not be too late for an American antitrust agency to

challenge some of the relevant acquisitions consummated over the 2010s, like

Facebook-Instagram, or Google-Waze, under either Section 7 of the Clayton

Act, or Section 2 of the Sherman Act.

9

The passage of years might, in fact,

provide clearer evidence of whether such mergers have, in fact, generated

6

See T

IM

W

U

, T

HE

A

TTENTION

M

ERCHANTS

: T

HE

E

PIC

S

CRAMBLE TO

G

ET

I

NSIDE

O

UR

H

EADS

(2016).

7

See infra Part II.

8

Cf. Ohio v. Am. Express Co., 138 S. Ct. 2274 (2018).

9

See United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586 (1957); Standard Oil Co.

of N.J. v. United States, 221 U.S. 1 (1911); United States v. Microsoft Corp., 253 F.3d 34 (D.C.

Cir. 2001); see also C. Scott Hemphill & Tim Wu, Nascent Competitors, U. P

A

. L. R

EV

. (forth-

coming 2020).

2019]

B

LIND

S

POT

: T

HE

A

TTENTION

E

CONOMY AND THE

L

AW

773

efficiencies, or instead yielded either higher advertising prices, or increased

the ad-load experienced by consumers, or resulted in quality effects, like di-

minished privacy protections.

In any event, taking attention markets seriously will be essential for agen-

cies confronting a new generation of challenges raised by the importance of

the businesses that resell human attention. The goal of this essay is to en-

courage economists and agencies to develop workable models that help the

law face these challenges.

I. BACKGROUND

A. T

HE

B

LIND

S

POT

We may begin with two legal problems, one from antitrust, one from con-

sumer protection, which demonstrate the challenges that attentional markets

create for current laws.

1. Mergers When Products Are “Free”

Contemporary antitrust doctrine assumes cash markets where customers

spend fiat currency to buy goods or services.

10

Consumer harm, under this

approach, is primarily measured in terms of higher prices, reduced output, or

other money-related harms. This approach has a number of known limita-

tions.

11

But a particularly problematic blind spot—one that has become promi-

nent over the last decade—emerges when the companies in question seem to

give away their products for “free” and are, in fact, competing in attention

markets.

12

10

See infra Part III.A.1. Cf. SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 (2d Cir. 1981)

(rejecting the argument that the threat of antitrust liability could “attach upon the acquisition of a

patent at a time prior to the existence of the relevant market and, even more disconcerting, at a

time prior to the commercialization of the patented art”).

11

Neglect of innovation-related harms and effects on product quality are two prominent limi-

tations. See OECD, The Role and Measurement of Quality in Competition Analysis, DAF/COMP

(2013); Mark McMillan, Quality Collusion: News, If It Ain’t Broke, Why Fix It?, 39 F

ORDHAM

U

RB

. L.J. 1895 (2012); see generally Tim Wu, Taking Innovation Seriously: Antitrust Enforce-

ment If Innovation Mattered Most, 78 A

NTITRUST

L.J. 313 (2012).

12

This essay is not the only work to notice the problem with merger review in this area. Some

scholars have argued that there has been a failure to understand the importance of big data. See,

e.g., M

AURICE

E. S

TUCKE

& A

LLEN

P. G

RUNES

, B

IG

D

ATA AND

C

OMPETITION

P

OLICY

107–26

(2016). Others, like Newman, have focused on the problem of “zero price” markets. See John M.

Newman, Antitrust in Zero-Price Markets: Foundations, 164 U. P

A

. L. R

EV

. 149 (2015) [herein-

after Newman, Foundations]; John M. Newman, Antitrust in Zero-Price Markets: Applications,

94 W

ASH

. U. L. R

EV

. 49, (2016) [hereinafter Newman, Applications]; see also Michal S. Gal &

Daniel L. Rubinfeld, The Hidden Costs of Free Goods: Implications for Antitrust Enforcement,

80 A

NTITRUST

L.J. 521 (2016).