Tech and the Fake Market tactic – Humane Tech – Medium
Par Anil Dash
In one generation, the Internet went from opening up new free markets to creating a series of Fake Markets that exploit society, without most media or politicians even noticing.
But before long, those rankings started to be tainted by spammers, due to the fact that higher ranking in those listings suddenly had monetary value, and making spam links was cheaper than paying for Google’s advertising products. What was an open market to do?
The inevitable automated gaming of the early open digital markets inadvertently catalyzed the start of the next era: rigged markets. Google got concerned about nefarious search engine optimization tricks, and kept changing their algorithm, meaning that pretty soon the only web publishers that could thrive were those who could afford to keep tweaking their technology to keep up in this new arms race. After just a few years, this became a rich-get-richer economy, and incentivized every smaller publisher to standardize on one of a few publishing tools in order to keep up with Google’s demands. Only the biggest content providers could afford to build their own tools while simultaneously following the demands of Google’s ever-changing algorithm.
Amazon went through a similar process, when it started putting its thumb on the scale, showing its own products first when doing a product search, even if they weren’t the cheapest. We saw a rapid shift where the companies hosting formerly-open markets started to give themselves unfair advantages that couldn’t be countered by the other sellers in the market.
That’s not to say these systems are fair: the big companies can pick which players in the market get to compete, and issues of network inequality mean people or companies that are privileged enough to be early adopters get unfair advantages. But even with these inequities, we could muddle through and new products or competitors could sometimes emerge.
This has been the status quo for most of the last decade. But the next rising wave of tech innovators twist the definition of “market” even further, to a point where they aren’t actually markets at all.
But unlike competitive sellers on eBay, Uber drivers can’t set their prices. In fact, prices can be (and regularly have been) changed unilaterally by Uber. And passengers can’t make informed choices about selecting a driver: The algorithm by which a passenger and driver are matched is opaque—to both the passenger and driver. In fact, as Data & Society’s research has shown, Uber has at times deliberately misrepresented the market of available cars by showing “ghost” cars to users in the Uber app.
It seems this “market” has some awfully weird traits.
Consumers can’t trust the information they’re being provided to make a purchasing decision.
A single opaque algorithm defines which buyers are matched with which sellers.
Sellers have no control over their own pricing or profit margins.
Regulators see the genuine short-term consumer benefit but don’t realize the long-term harms that can arise.
This is, by any reasonable definition, no market at all. One might even call Uber a “Fake Market”.
Fake markets don’t just happen in traditional products and services — they’re coming to the world of content and publishing, too. Publishers are increasingly being incentivized to use platforms like Facebook’s Instant Articles and Google’s AMP format. Like Uber’s temporarily-subsidized cheaper prices and broader access to ride hailing, these new publishing formats do offer some short-term consumer benefits, in the form of faster loading times and a cleaner reading experience.
But the technical mechanism by which Facebook and Google provide that faster reading experience happens to incidentally displace most of the third-party advertising platforms — the ones that aren’t provided by Facebook and Google themselves.
By contrast, what are the barriers to self-driving news? We’ve already seen that a lot of news consumers aren’t interested in being safely and reliably delivered to accurate news. Success in this case will be much easier: A robotic publisher only has to deliver content that’s emotionally engaging enough to earn a person’s readership for a few moments. That’s even easier to do if the publisher or distributor of the content doesn’t care if the story is true or not. Peter Thiel is on Facebook’s board of directors.