Regulation

Congress Wants Digital Platforms To Release Their Algorithms – Why?

U.S. lawmakers proposed new legislation last week that would require internet platforms to more or less lay bare the intellectual property that drives their business model – their algorithms.

The Filter Bubble Transparency Act targets “large-scale internet platforms” and the so-called “filter bubbles” they create when their “secret algorithms” are used to curate and personalize search returns. Since consumers don’t know what goes into creating those returns, the algorithms create the “filter bubbles” that the Act’s sponsors say are both manipulative to the consumer and harmful to innovation.

In practice, the Act would give consumers a “plain vanilla” search return option, devoid of the “filter bubbles” that lawmakers say are created when their browsing history, prior search queries, devices and locations are used to personalize and curate search results – in other words, garbage.

Under the Act, consumers can also opt-in to give these platforms access to basically the same information used now to return results when a search is initiated.

Thus, the proposed legislation would introduce a new layer of friction to a process that works pretty well and garners few complaints from consumers.

The Act was named after a book written by Eli Pariser called “The Filter Bubble: How the New Personalized Web Is Changing What We Read and How We Think.” Pariser is the CEO of Upworthy, a website for viral content that he started in 2012.

The main feature on the Upworthy home page as of yesterday, when I last checked, was about Mariah Carey declaring that the Christmas season is officially here. And so it must be. (Pariser is also the board chairman of Moveon.org.)

Excluded from the Act are internet platforms that employ fewer than 500 employees, have data on fewer than one million people and earn less than $50 million in annual revenues. Apparently, not until the 501st employee is hired, data is gathered on 1,000,001 people and annual sales reach $50,000,001 do algorithms become both secret and pernicious.

The Filter Bubble Transparency Act would make it unlawful – as in, against the law and subject to civil penalties – if internet platforms do not (a) clearly notify users that it creates “filter bubbles” using “secret algorithms” and (b) provide users with the option to transition between filter bubble and filter bubble-free versions of search.

A suggested visual cue for that option is a “sparkle icon” that lets consumers know when they are moving between the two search return versions.

I kid you not.

Welcome to the latest chapter of Big Tech bashing.

The Beginning of the End of Reliable Search Results?

Like many new pieces of proposed legislation, this one is sufficiently vague on how any of its proposed regulations will work in the real world.

Taking the Act’s authors and key supporters at their word, though, those filter bubbles can only be popped if consumers are given information about how the “secret algorithms” used by these platforms are created, so they can decide whether they want their search results filtered or unfiltered.

That would be giving them – and every other business and competitor – the wiring diagram for the intellectual property that these platforms have invested billions upon billions of dollars over years, even decades, to create.

If I were cynical, I might make the point that giving businesses power and protection over their intellectual property rights has always created a highly-coveted competitive advantage for businesses everywhere – and particularly here in the U.S., where so much of tech innovation has emerged and flourished.

So much so, that it has become one of the big obstacles standing in the way of ending the China-U.S. trade war. The current administration is insisting that as a condition of ending the tariffs, the Chinese must take concrete steps to respect the intellectual property rights of U.S. companies doing business there.

And if I were cynical, I might also make the point that asking U.S. firms to give up their own intellectual property rights under the auspices of giving consumers more choice in how their data is used seems a bridge too far – even by the now de rigueur “let’s bash Big Tech” standards.

And it’s quite possibly not what this Act is all about.

It’s not clear how the Act’s co-authors define a large-scale internet platform, but the book that is its namesake highlights Google, Facebook and Apple as examples of quintessential “filter bubbles.”

But those aren’t the only places where consumers seek information.

Today’s consumers have a nearly endless array of marketplaces and other aggregators of products and services where they can search and find information. And they do. They also seem quite happy to move between them as their information requirements dictate.

That makes the dynamics – and competitive playing field – for search now very different. Google competes with Facebook for ad dollars and eyeballs, but vies with Apple in an entirely different way. All three compete with Amazon. You might as well throw Walmart into the mix – and Instagram and WhatsApp and Expedia, and Houzz, and Airbnb and Open Table, and Skyscanner and Trip Advisor, and Zillow, too. While we’re at it, let’s toss in Netflix and Spotify. And Boxed.

Consumers use all of those platforms to look for and find stuff. But why stop there?

There are the delivery platforms where consumers search for take out, including Grubhub, which got caught with its hand in the search engine gaming cookie jar when it was buying restaurant names and keywords. There’s Etsy and 1st Dibs and Chairish and eBay where consumers search for things they want to buy, and Home Advisor for home repairs, and LinkedIn that’s now in the content distribution business. Of course, there’s Pinterest too, along with the thousands of other platforms that consumers now have available to them to find what they want and need.

Will all of those platforms be subject to the Act? Or do you have to be part of the Band of FAANG to be regulated by it?

Most important, it’s not even clear that consumers think they have a filter bubble problem. Or let me put it more bluntly—there is no evidence that consumers want what the Senators are selling.

But they could soon have one if the Act’s sponsors have their way.

There’s a reason why these platforms keep their algorithms secret, besides the fact that they don’t want their competitors to copy their hard-earned innovations.

Many of these platforms are helping consumers sift through lots of different entities – like websites for search, products for marketplaces and applications for app stores. Naturally, every one of these entities would like to be at the top of the stack.

So all of these platforms are constantly working to prevent these entities from gaming the algorithms. As more secrets of the algorithms dribble out, they’ll have an easier time gaming the system – so even consumers who don’t opt-in to the “plain vanilla” option will start getting the garbage they don’t want.

Houston, Is There Really a Problem?

The Filter Bubble Transparency Act is both troubling and amusing for many reasons, but perhaps even more so given the results of at least three different brand studies released over the last several months.

These studies, done by well-respected brand research organizations – Kantar, Morning Consult and Interbrand – each have their own methodologies for measuring the value of top consumer brands and the attachments those brands have with the American consumer. Value, of course, is a mix of attributes linked to the consumer’s use of (and satisfaction with) those brands, as well as the return on that value.

Across all three of those studies, in 2019, Amazon, Google and Apple each occupy one of the top three spots, and they have for years. This year, in two of those three studies, Facebook appears in the top 10, but lost some ground over last year. It is the Kantar study that reported Facebook’s drop out of the top 10 for the first time in many years.

Those results are also consistent with how consumers trust and use these platforms to innovate their payments experiences. Some combination of Amazon, Google, and Apple is always in the top five, and Facebook, when it comes to payments, appears at the bottom of the list.

All of these independent sources of information point to consumers who seem largely happy with the large-scale internet platforms they interact with today. They also don’t hesitate to let brands know when they’ve been disappointed and then turn away.

This also suggests that most consumers are also quite savvy about interpreting search returns and understanding how they work. They can distinguish between ads that are paid and organic search results that are not. Many marketplace sites also give consumers options to choose their own filter bubbles – lowest price, highest discount, newest arrivals.

When they are on the hunt for information, time-starved and convenience-driven consumers seem to value internet platforms. And internet platforms have invested billions of dollars into giving them relevant, personalized options.

In an era when the consumer demands relevance in context, personalized experiences and instant and timely return of queries when they make them, introducing friction into an experience they seem pretty happy with seems backward-looking instead of forward-facing.

Popping the Bubble of the Filter Bubble Transparency Act

Transparency is a powerful word, and one that is rightfully and importantly used today to hold businesses accountable for their actions on behalf of all their stakeholders.

Perhaps an act that purports to be all about transparency should be a little more transparent about its own motives.

Consumers aren’t complaining, and the current model seems to work very well for them. They can search for free for anything they might want to find. Advertisers can compete for the chance to grab their eyeballs, and hopefully a click-thru and a sale. Publishers and content creators invest in SEO techniques to build authority in organic search by creating content that those algorithms will recognize as relevant and useful.

Those who do complain are typically those who can’t compete unless they first have all of the answers – and can then use them to game the system for their own benefit. The Filter Bubble Transparency Act wouldn’t be the first piece of legislation proposed because competitors felt disadvantaged. The record-breaking fine that Google paid in the EU was the result of efforts funded by Microsoft, whose search engine Bing was unable to attract eyeballs and advertisers to its platform.

That doesn’t mean there aren’t things to worry about.

It’s possible to roil against Facebook for its repeated failures to govern and explore remedies to fix the systemic problems that exist in that platform, since they don’t seem able to do that themselves.

It’s possible to raise a yellow flag when the ecosystems that Big Tech has largely ignited in this now very dynamic digital world have the potential to create conflicts that could harm consumers and businesses. We should be keeping a careful watch as Google becomes more of a marketplace itself and starts to compete with established marketplaces, like travel aggregators, food delivery aggregators and local services aggregators. We need to understand how they will keep competition fair.

It’s also possible to do all of that without collectively throwing all of Big Tech as we know it today under the bus for policymakers and regulators to run roughshod over. And without forcing them to expose the valuable IP they’ve spent decades and billions creating for the benefit of their stakeholders.

We’re only about two decades into the massive transformation of our economy, thanks to the innovations Big Tech has created and the many more that innovators have built to give consumers and businesses unprecedented opportunities to find each other and do business.

But tech firms, like pretty much all big firms, probably have done – and certainly will do – some bad stuff. For most consumers, however, they are anything but horrible. They think of them as big, but not in a bad way. Their bigness does a lot to simplify their lives.

So, before jumping on the “Big Tech is manipulative and harmful to innovation” bandwagon, it might be time to ask consumers how they would rate Big Tech against other firms that provide them with services – like their local cable provider or the post office.

Or Congress.

In fact, Congress has a 20 percent approval rating among all Americans and hasn’t broken a 30 percent approval rating in 10 years.

As for me, if the Filter Bubble Transparency Act ever makes it into law, I can’t wait to see the redesigned search pages that go horizontal instead of vertical so that everyone – relevant or not – can be given the top spot in a plain vanilla search world that most of us happily left behind two decades ago.

And how could you not love that sparkle icon?

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