Fixing the Information Marketplace

A recent article in the ACM Communications is aptly titled How the Hippies Destroyed the Internet. The social media companies have adopted an opaque business model where the cost of publishing and consuming the information appears as zero, when in reality it is not.

The author points out that the business model built on advertising revenue creates an invisible tax on consumers — and an opportunity for surveillance and censorship. When the service is free, the provider of such service owes nothing to consumers and everything to the sponsors. The author explains:

Communism is the most famous 20th-century attempt to build market-free economies. It required coercion on a colossal scale, with an incalculable cost in human lives. The Internet is the second major attempt to build a market-free economy, limited to information.

The question we must ask ourselves is whether information freedom is good for society. I argue that it is not.

Zero cost to publish gives rise to hearsay and conspiracy theories. Zero cost to consume amplifies sensationalism and fake news. Advertising-driven publishing results in censorship and surveillance. No matter how you twist it, in such a business model someone’s ideas are bound to be suppressed.

On the other hand, markets with transparent pricing give us a way to agree on the value of the services we consume. If the cost of publishing is not free, the publishers have to find ways to recoup their costs and even profit from their content by delivering value to consumers. If the cost of consumption is not free, the consumers have to find publishers they value and agree on the price with them.

Until Internet users start demanding quality content from publishers by paying subscription fees that make publishers profitable, the information will continue to be advertising-driven. To fix the fake news, the get rid of the trolls and bots, we literally need to vote with our wallets.