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Supreme Court Empowers American Express To Gag Merchants

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On June 26, 2018

In Corporate Nation State, Corporate Power, Restraint of Trade, Supreme Court

Photo: consumerist.com

Supreme Court Justice, Clarence Thomas, wrote in the majority opinion released yesterday, “two-sided platforms, differ from traditional markets in important ways. Since card companies deal with both merchants and consumers.” He continued “people challenging actions as anticompetitive must take account of the effect on both sets of market participants.”  The majority did not see the restraint in trade by American Express requiring merchants to only offer their card, and not tell customers that Visa and Mastercard had cheaper swipe fees.

The majority was by only one vote 5-4,  with Justice Stephen J. Breyer reading his minority opinion summary, an unusual step, when he said, “I particularly fear the interpretive impact of the majority’s discussion of what it calls ‘two-sided platforms,’ in an era when that term might be thought to apply to many internet-related goods and services that are becoming ever more important.”

The bottom line is this: American Express can gag its merchants legally from telling their customers that American Express fees are higher than other cards and they will have to raise prices as a result.  Plus, the implication is that other cards are not available for customers to pay for their purchases.

American Express has a huge market share in credit card networks:

Source: valuepenguin.com – 2017

Yes, that’s right Amex did .695 trillion dollars in transactions in 2016! While Visa does have a larger share, American Express is essentially gaging its merchants about the costs of transactions and restraining trade.

Next Steps:

We are frustrated and disappointed that SCOTUS has sided with a Corporate Nation State, American Express, to support continuing to build their financial empire at the cost of retailers optimally running their businesses. Think of retailer’s position – caught in an Amazon competitive whirl wind, Internet global access to products and constantly trying to gain the attention of shoppers to come into their store.

The American Express ‘steering clause’ is clearly a restraint of trade, we need court decisions focused on creating a level playing field for all companies to do business.  Congress needs to pass a law making it clear that these ‘two sided’ platforms are just another form of distribution so a product or services provider cannot restrain the distributor from exercising his business rights and doing what is right for their customer.

Amazon’s Growing Corporate Power In Washington – Threat to Capitalist Democracy

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On June 20, 2018

In Anti Trust, Corporate Nation State, Corporate Power, Corporate Reform, Executive Compensation, Stock Buybacks

Source: e-brand.biz

An oligarchy is defined by Wikipedia as, “a form of power structure in which power rests with a small number of people”.  One of the Elite is corporate tycoon Jeff Bezos, Amazon founder, who is thought to be the wealthiest person in the world with net worth estimated at $141 billion.  He wields great corporate power leading an innovative company, pioneering e-retailing when many said it couldn’t be done building a $177 billion empire in e-Commerce, web services, grocery, and just about everything you can buy in a store you can get from Amazon.  Amazon owns 43 % of the e-Commerce market, and has been responsible for a complete transformation of brick-n-mortar retailing causing the loss  of thousands of jobs.  The company name is synonymous with going out of business as some store owners declare they have been ‘Amazoned’.

Amazon has one of the largest lobbying forces in Washington, 94 strong:

Sources: The Center for Responsible Politics, The Wall Street Journal, 6/20/18

Amazon spent $13 million on lobbying and is one of the top spenders on lobbying along with Google, AT & T and Oracle.

The Amazon corporate power juggernaut keeps rolling.  The e-Commerce giant owns 50 % of the book print sales market for publishers, with Barnes and Noble in the teens and independent book sellers about 6 – 8 percent. Ten years ago, independent book stores held a 30 % share of the book print sales market until Amazon drove them out of business, with convenience and not being required to pay sales taxes to states (though the Supreme Court just ruled last week that e-Commerce firms must pay sales taxes). Now, in an ironic twist the firm has 3 brick- n-mortar stores and is opening 5 more in 2017- so Amazon drives the competition out of business, with low cost prices and no taxes then starts opening brick n-mortar-stores.  Is that fair? In audio books Amazon owns Audible the No. 1 provider of audio books where last year listener – readers heard over 2 billion hours of programming.  The Kindle subscription business holds 14 % of the e-reader market and is the fastest growing segment increasing 4 % in 2016

Amazon is humongous compared to its competitors with brick-n-mortar stores:

Source: visualcapitalist.com – 12/30/16

Amazon is larger than the next 8 competitors and it is killing their businesses by amortizing its cut rate prices with profits from its Business to Business cloud enterprise – Amazon Web Services (AWS).

Source: Geekwire – 10/1/16

Without AWS Amazon would not be able to take profit from the B to B side of the business and fund the cut rate prices driving other stores out of business. While it may seem like this is capitalism ‘creative destruction’ at its best, this condition strikes us as unfair competition. Add a tax cut giveaway to corporations like Amazon, and the juggernaut keeps picking up speed at the expense of workers and democracy.

Next steps:

  1. One Lobbyist Limit – The Company is a citizen according to the Supreme Court in Citizens United, then good it has one lobbyist representative to Congress.
  2. Sunshine Contractor Monitoring – Amazon and the top 100 government contractors would have to contribute to a web site noting their business with the Federal Government, revenue from the contracts, agencies working with, number of government staff working with Amazon, Amazon staff size working on projects, where they are located, and all contacts with Congress, Executive branch staff – date, time, attends, discussion top, money involved, follow up. All these details would be available to the public on a web site 24/7.  These disclosure are a ‘annual report’ to the people of the US about what the top 100 contracts are doing for our federal government, and us and how they are contributing to our government and society goals.
  3. Campaign Contribution limits – $2700 per corporation if they are a person, that is all a citizen is allowed to contribute, and the Supreme Court found corporations were citizens, so Amazon has the same limit as a citizen.
  4. Corporate Reform – top 2 corporations in an industry sector must have a minority number of outside board members elected by all the shareholders. Employees can form ‘councils’ along the line of the German worker council models.  Salaries for executives would be limited to 50 times the average worker in the firm (consumer discretionary sector the average for CEOs is 350 times, Bloomberg, Feb 1 2018)., Stock buy backs need to end, or be phased out as they are artificially raising the price of stock on major exchanges by 20 – 15 % experts estimate just to line the pockets of executives and major shareholders, the funds are not going to wage increases, productivity investments or job training.
  5. Anti – trust – Amazon needs to be broken up into a corporate web business – Amazon Web Services, and grocery business (Whole Foods never should have been approved) spun off. The e-Commerce business needs to stand on its own, plus we need to look for other ways to create fair- play markets possibly separating services from distribution,

The Rich View Our Government as A Trusted Rule Keeper, The Common Man Not So Much

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On June 15, 2018

In Common Good, Corporate Nation State, Environment, Executive Compensation, Labor, Stock Buybacks, Student Debt, Worker Wages

Image: Your Little Planet

Thomas Jefferson and James Madison saw the need to frame a government such that ‘forced compromises’ would push political leaders to focus on the Common Good.  The institutions that maintain our common good include the federal government three estates:  The Supreme Court, Congress and The Executive.  In addition, the Fourth Estate, a Free Press is crucial for our citizens to have access to fair and impartial reporting about the activity of government officials and their policies. We have spotlighted the key role Education, as the Fifth estate, plays in educating our people to make critical decisions and understand comprehensively the information they receive from a Free Press.

Trust in our federal government has been falling since the presidency of Lyndon Johnson in 1965.

Source: Pew Research Center – 12/14/17

We noted in our first post on the Common Good that there were two factors contributing to the decline in trust:

“We see two major factors for the lack of trust.  One, is that economic inequality has been increasing over the last 60 years to the point where it is at the worst it has ever been since 1929.  Americans expect their government to be the rule keeper of a fair shot at economic opportunity not a bastion for the rich and powerful.  As wealthy donors have taken over control of both major parties, the influence of the average citizen has been reduced to nearly nothing except at the ballot box – but not in legislative policy.”

The second major factor is the change in information access and news viewing habits of our society.

“In the 1950s and 1960s families gathered around the television set to watch Walter Cronkite or Huntley and Brinkley bring them the news for the day.  These news anchors had teams of trained journalists in how to gather news, provide airing of opposing views and investigation to reveal the facts of the story. As cable news programs became popular people drifted away from central network journalist supported news programs toward popular ‘viewpoint news’ programs like Fox News or CNN.  Then, from 1995 until today, the Internet was a catalyst for the growth of blogging, and ‘friend news’ on Facebook which had virtually no formally trained journalists and limited understanding of the difference between facts and opinions.  Opinions spread virally through the Internet often with no foundation in formal fact gathering or fact finding investigation techniques. Today, we even have presidential spokespersons talking about ‘alternative facts’ to justify their policies or opinions.”

Trust gaps by income level are increasing around the world with many developed countries showing double digit gaps between the top income quartile and the bottom income quartile and the U.S. with the largest gap:

In the U.S. incomes for the lower 80 % have been largely stagnant for the past three decades since the Reagan years, higher education costs rising to levels never seen before with student loan debt at $1.5 trillion dollars. In short, lower and middle income parents expect their children to have fewer opportunities and to make less money over their lifetime. This growing sense of hopelessness is in part triggering the populist movements we see world-wide. The top quartile trust government institutions the most because they are getting the benefits, tax cuts, relaxed environmental policies to allow their businesses to make as much money as they can, and continued stock buy backs to make even more money instead of increasing worker wages.  Workers see their votes not making a difference as Congress is at the beck and call of Corporate Nation States who make multi-million dollar campaign contributions and the Executive Branch now run by billionaires.

Little wonder the Common Good is not embraced by all people, for the rich they are on top of the economic pyramid. The rich get the laws they want and aren’t interested in sharing their wealth or time to build the Common Good.

Here is what will likely happen, in the end the rich will need to see that it is in their interest to build the Common Good, by contributing to our institutions of government and common people or they will lose what they already have and probably a lot more.

Workers Struggling Under Credit Card Debt

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On June 13, 2018

In Corporate Nation State, Corporate Reform, Debt, Labor, Low Income Finance, Worker Wages

Photo: finder.com.au

While consumers did pay down their credit card debt by $40 billion during the first quarter of 2018, they still owe a giant $1.021 trillion in revolving debt.  Credit card debt is at the second highest level since 2008, during the Great Recession.  Consumers piled on another $91.6 billion by the end of 2017, at a run rate of 104 % of the average over the past 10 years.

Sources: Marketwatch, WalletHub – 6/13/18

Adding to consumer woes are interest rates that are rising, adding to the servicing costs of credit card, auto loan, and student loan debts. Below the chart shows debt servicing costs as a percentage of disposable income, while mortgage debt servicing is declining consumer servicing costs are rising.

Sources: Federal Reserve, National Bureau of Economic Research, The Wall Street Journal, The Daily Shot – 6/13/18

Finally, non-supervisory worker’s wages are stuck at 2.5% and when inflation is taken into account are largely flat. As consumers continue to try and maintain their standard of living, they are taking on more revolving debt which is costing more for them to pay. This financial squeeze is sustainable as long as jobs are abundant as they seem to be now, but if the economy turns down and layoffs happen it will be hard times for workers.  A survey published today in the Wall Street Journal blog – The Daily Shot showed executives plan layoffs as the first approach to deal with tightened financial conditions and slow sales.

 Next Steps:

 Workers need to receive a living wage that is not stagnant as wages have been for the past 10 years since the recession. Over 14 % of all workers have not received a raise in the last year versus 11% prior to the recession. Stock buy backs need to end and those funds invested in raising worker wages, increasing productivity and providing job training and development.  Corporations stash over 40 % of their profits in overseas tax sheltered accounts – all those funds need to come back to the US with companies paying their fair share of taxes. Corporations are the beneficiaries of job training and education, and should pick up more responsibility in terms of taxes for apprenticeship programs on par with those in Germany to provide US workers with the advanced skills needed to obtain a good paying job and create a dual track besides college. Today, there are more job openings than candidates available to fill those jobs, we need to invest developing worker’s job skills to close the gap.

AT & T Wins Time-Warner – Americans Lose Free Press

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On June 12, 2018

In Common Good, Conflicts of Interest, Corporate Nation State, Media Concentration, Public Interest, Wages

Photo: Tim Carter

A federal court judge approved the $85 billion bid by AT &T of Time – Warner, creating a huge vertically integrated media giant.  The judge found no need for the kind of conditions placed on the Comcast acquisition of NBC Universal in 2011, or ensuring a free press.  Though both cases are quite similar in that AT & T and Comcast are both major media companies acquiring content providers and news organizations (NBC, and CNN).  In approving the Comcast – NBC bid, the judge laid out detailed conditions to protect consumers, requiring adherence to net neutrality for Internet supported content providers and assistance for low income users. Since the Comcast – NBC merger Comcast has violated several provisions of the agreement as outlined by former FCC commissioner Mignon Clyburn and Senator Richard Blumenthal including: not adhering to network neutrality in providing channels to consumers, slow implementation of low income Internet assistance programs, not providing smaller cable channels with fair rates to access regional sports networks and discriminated against Bloomberg Television (a competitor of CNBC).   Clyburn and Blumenthal in their op-ed piece pose three key questions to be answered in every major merger (our answer):

  1. How will consumers be affected? Negatively by lack of competition
  2. What will this do to competition in the industry? Reduce competition significantly
  3. What will it mean for small businesses? Small businesses will be squeezed out of the market

For some reason, the court in the AT & T – Time Warner case did not seem interested in answering these questions related to safeguarding consumers, businesses or freedom of the press. Federal regulators found in the Comcast – NBC bid the need for 150 conditions to be placed on the merged corporate organization.

Today, the court saw a need for no conditions?  Why? When we have a deregulation federal government policy wave rolling across the country today it is even more imperative that conditions be in place if these giant mergers are to be approved.

Next steps:

Our position is the merger juggernaut needs to be stopped now, and this merger not approved – later we will have to break it up anyway.  Mergers contribute to lack of jobs as well which hurt wage gains by workers.  Media concentration limits access to information and choices for media coverage. In 1983, 90 % of media, entertainment and distribution markets were controlled by 50 companies, today, there are 6 major players:

By approving the AT &T – Time-Warmer deal the court is giving a green light to deals now under review like the Disney bid (Comcast biding too) for 21st Century media which would create yet another huge conglomerate strangling competition and reducing the number of news sources. Other major Internet players are waiting in the wings like Apple, Google, Amazon and Facebook who are flush with cash and looking to control both the Internet, broadcast and film content and distribution.

We have said that deals like this need to be reviewed in supporting the common good ensured by freedom of the press.  This AT &T deal should not be approved on media concentration and press limitation grounds.  Jefferson and Madison observed correctly that a democracy can not long survive without a well-informed citizenry making decisions based on multiple points of view. Major corporations win in deals like the AT &T – Time Warner merger, the American citizen loses.

Activists Push Environmental Corporate Reform at McDonalds

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On May 24, 2018

In Corporate Nation State, Corporate Reform, Environment, Solution

 

Image: thepeoplesconvention.org

We believe corporate behavior will most likely only change when shareholders demand change through corporate reform.  While some farsighted companies are moving to all sustainable materials for their packaged goods McDonalds has been slow to make it happen.

McDonalds says it is willing to move to eliminate plastic straws by 2025 – seven years from now.  That timeframe is just too late.  There are plastic straw substitutes like biodegradables are available now made from starch, corn or bamboo. The giant restaurateur has been dragging on making shift.  Plastic in our oceans is a huge problem, destroying habitat for ocean creatures and fouling their food sources multiplying each year by 8 million metric tons.

Source: The Ocean Conservancy – 5/24/18

We applaud the plastic straw proposal by SumOfUs, corporate reform activists, obtaining 450,000 signatures to qualify for a shareholder vote.

Corporate decision making must continue to be monitored, and when a decision is making our planet more uninhabitable it must be changed to make our life here sustainable.  The reality is that those profits are not going to matter in a planet where our environment is destroying the world we live in placing people world-wide in jeopardy of shortened life spans.

Unfortunately, today the plastic straw proposal only received 8 % of shareholder votes.  The vote of major shareholders and institutions against the proposal shows there is still work to be done to in corporate reform.   We are pleased to see major institutions, like Blackrock, where CEO Larry Fink has demanded that companies they invest in get more engaged in environmental issues and ‘how’ they make money not just make money. When CEOs at major companies see that it is in their interest to move the paradigm of environmental protection ahead then we will know that they are listening to us, the people, rather than Wall Street. Corporations and the wealthy control Congress so we need to go directly to Corporate Nation States to bring about real change.

Supreme Court Hands Corporations Another Win Over Employees

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On May 22, 2018

In Arbitration, Corporate Nation State, Employees, Wages

Photo: Central Penn Business Journal

Yesterday, the Supreme Court announced a major decision that further limits employee rights. Newly appointed Supreme Court, Justice Neil M. Gorsch wrote the majority opinion holding that a 1925 Arbitration held over a 1935 National Labor relations law allowing employees to sue their employers.  The court held that employees can not bind together in class action law suits where they have common interests in a complaint against a company, they must use arbitration specified in the agreement.  Employees are coerced into employee agreements in that they must sign them to take the job, corporations have the power in a job negotiation as they can just go to the Internet and find another 25 or 100 candidates for many jobs.  The candidate cannot negotiate clauses in employment contracts with their own attorney because they want the job more than worrying about a contract clause.

Supreme Court Justice Ruth Bader Ginsberg wrote the minority opinion outlining how unjust this decision is, a part of the opinion she read aloud in court:

“The court today holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one,” she said. “Federal labor law does not countenance such isolation of employees.”

Research supports Justice Ginsberg’s finding, in most cases the employee is more likely to lose a case in arbitration versus court suits and when judgements are won the final awards are much smaller.

Source: The Economic Policy Institute – 10/14/2016

The decision clearly is another win for corporations increasing their power over employees by severely limiting the ability of an employee to equalize the leverage with their employer in bringing a complaint.  Corporations can now take on employees one by one where they will not have the attorney fire power that corporations wield.

Next Steps:

Congress needs to pass a law to make clear that the National Labor Relations Act takes precedence over the Arbitration Law which was passed to use arbitration processes for company to company complaints.  Then over the years since 1925 corporations have use their lobbying influence and ability to buy control of presidents appointed justices to extend the law to covering consumers in credit agreements and employee contracts. Corporate control of campaign funding with the Citizens United decision, succeeding Super PACs and extreme lobbying spending strengthens the hegemony of corporations over employees.  It is obvious that employee power is at an all-time low as we have the lowest unemployment rate in 10 year while wages for the 80 % in income stagnant.

Employers Should Pay Hourly Employees Fairly, Not Chip Away at Stagnant Wages

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On May 21, 2018

In Automation, Corporate Nation State, Wages, Worker Wages

Photo: smallbusiness.chron.com

As more corporations use software to track hourly employee hours some have tipped the data collection rules in their favor.   American Airlines is facing a suit from 400 employees for shorting their hours, Kroger and Montage are facing similar suits.  We realize that corporations are under great pressure to cut costs on labor to increase profits and meet shareholder and Wall Street expectations.  However, since the wages of production employees and non-supervisors have been essentially stagnant for the past 5 years we ask:  who is really getting hurt?  Corporations have all time low taxes, all time high stock buy backs to juice executive salaries, and all time cash nearly $1 trillion stashed in most offshore accounts.

Meantime employees are at the lowest point of wage power in the workplace in decades with reduced health benefits at greater cost, competition for their jobs from other workers on the Internet, automation, corporate mergers reducing the number of jobs available, and union busting laws.  So who are the wage scales tipped toward?  Corporations.  Average hour worker income has continued to fall when inflation is included.

Sources: Bureau of Labor Statistics, Real Investment Advice – 5/15/18

So, when companies use software to track employee hours, then ‘round hours up’ for breaks or deduct breaks that didn’t happen – like for nurses in healthcare at the University of Missouri Health Care using time tracking software where they cared for patients during their breaks but the software recorded a break anyway.  The nurses are losing money, and even more than just wages respect for the work they do.

Next Steps:

Employers wake up! Work is a social contract that is two-way and should be equitable, time cards should be signed by employees in some manner before wages are dispersed.  The signing which used to be performed is a confirmation that the employee and employer understand the work being performed and the fair hours completed. Software should not just automatically capture data and cut checks.  When time cards were used, filled out by employees – now done online, yet most systems allowed for electronic signatures.  In haste, these companies are just using the software to capture the hours, record the hours and post checks. Company IT departments set the rules of the software sometimes in favor the company not the employee.  These rules changes can be for just minutes or more but at infrequent times so it is hard for employees to discern what is happening to their paycheck.  Time tracking software should be required to show an audit trail for the employee to see to ensure that it is a just capture of their hours. Let’s be clear when these systems don’t treat employees fairly, and allow for confirmation of hours worked the employer is committing a real in justice to the employee.  Corporations need to review the process of their time recording software for hour employees, ensure adequate safeguards are in place for employee input and install these systems with employee support.

What Happened to Our Common Good?

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On May 4, 2018

In Common Good, Conflicts of Interest, Corporate Nation State

 

Image: Your Little Planet

Alexander Hamilton, James Madison and John Jay wrote a series articles in 1787 called the Federalist Papers defending the newly written Constitution. In Federalist Paper No. 57, Madison proposed to ‘first obtain for rulers men who possess the wisdom to discern, and most virtue to pursue the common good’. They were quite concerned that an overbearing majority would run over the needs of the public good or a minority group.  Or that a ruling class of the privileged and wealthy would use the tools of government to continue to gain more wealth at the expense of the common people.

Today a sense of the common good is almost non-existent in our political discourse as our federal government has become so partisan as to be completely inept at coping with the common problems facing Americans.  There is intense conflict between factions about our public interest in clean air, water and land, safe communities, equal economic opportunities, an open education system for all, justice for immigrants seeking to contribute to our country and being a leading light of democracy around the world.  On many issues, corporations, public interest groups and other nations are ahead of us by 10 – 20 years in solving many foundational issues of our time.

What happened to our shared sense of the Common Good?  One way to understand the loss of our common shared interest is in the lack of trust Americans feel in their democratic institutions that have the responsibility to protect and sustain our common interests and public good.

Source: Pew Research Center – 12/14/2017

There has been a slow and continuous decline in public trust since President Eisenhower until the ultimate low today during President Trump’s administration.

We see two major factors for the lack of trust.  One, is that economic inequality has been increasing over the last 60 years to the point where it is at the worst it has ever been since 1929.  Americans expect their government to be the rule keeper of a fair shot at economic opportunity not a bastion for the rich and powerful.  As wealthy donors have taken over control of both major parties, the influence of the average citizen has been reduced to nearly nothing except at the ballot box – but not in legislative policy.  A study by Professors Martin Gilens of Northwestern, and Benjamin Page of Princeton found that the opinion of the bottom 90 % made no difference in laws passed by Congress over a 20-year period. For example, the present GOP Administration is out of step with most Americans that want a clean environment even if there is an economic cost based on a Gallup poll. Americans know that the system is rigged as both candidates on the far left and far right, Bernie Sanders and Donald Trump gained great support by proclaiming that the economy and government was rigged against them.

The second major factor was the evolution of media and the Internet.  In the 1950s and 1960s families gathered around the television set to watch Walter Cronkite or Huntley and Brinkley bring them the news for the day.  These news anchors had teams of trained journalists on how to gather news, ensure airing of opposing views and investigation to reveal the facts of the story. As cable news programs became popular people drifted away from central network journalist supported news programs toward popular ‘viewpoint news’ programs like Fox News or CNN.  Then, from 1995 until today, the Internet was a catalyst for the growth of blogging, and ‘friend news’ which had virtually no formally trained journalists and limited understanding of the difference between facts and opinions.  Opinions spread virally through the Internet often with no foundation in formal fact gathering or fact finding investigation techniques. Today, we even have presidential spokespersons talking about ‘alternative facts’ to justify their policies or opinions.

We have come a long way from a shared common understanding of the facts to base opinions and policy ideas about. Unfortunately, the factional conflict is tearing at the foundations of our democratic institutions that keep our country free and protect the rights of all.

Next week, we will examine deeper how Madison and the founding leaders viewed factions and how to deal with them to keep new ideas coming yet keep the Union together.  They had ideas that are insightful for our situation today as they placed their trust in the people to make the right decisions when provided with good information and facts.

EU Defends Social Media User Privacy – We Should Follow

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On April 24, 2018

In Corporate Nation State, Digital Advertising, Privacy

 

Image: fbi.gov

The EU has been working with social media companies to comply with new regulations protecting consumer privacy on social media called the General Data Protection Regulation or GDPR.  It will begin enforcement of the act in May, the commissioner leading the privacy protection effort, Vera Jourva found that both Google and Facebook were implementing software features to support the new regulation. The GDPR regulations seek to limit the actions of huge social media companies to take control of customer data in exchange for services.  The regulations require that an affirmative consent be obtained before all social media companies can give access to users to their advertising clients.

Google has told website owners and app publishers they must explicitly obtain user’s consent for targeted ads or they will be cut off from the Google ad network.  Facebook has placed pop pages on it European sites to invite users to affirm their receptivity to targeted ads.   Their marketing clout has put small ad tech companies that work directly with site providers in bind as advertisers don’t want users hit with many consent pop ads from multiple sites.  Google and Facebook make it easy and simple for digital advertisers to reach their audiences with targeted ads with one permission screen.  The two social media behemoths are forcing many ad tech companies into a difficult position with their clients, and some may go out of business

Source: The Wall Street Journal – 4/23/18

Google and Facebook track the majority of web page loads for surveillance of users and targeting ads. This means they have unchecked marketing power with advertisers and users to promote their digital channels to the exclusion of other players.

Next Steps:

Frankly, the EU regulations don’t go far enough, the law should establish that users own their content and they license its use to the social media corporations for certain limited business purposes. Besides explicit consent for allowing tracking, users should be able to opt out of tracking if they want and still be able to use the service – leaving advertisers to reach users when they are only on their site.  We don’t allow cable broadcasters to track their viewers (even though digitally they know who is watching) and place ads based on what channel they are watching.  Targeted advertising is a form of spying on the users, and needs to stop. Google and Facebook should make their consent information available to websites that use their services to make a level playing field on ad networks as well. We need to carefully examine the business processes of these new giant companies to ensure that market rules are setup for a level playing field for all participants and further review breaking up services where undue market clout is being exercised.  For example, Google has over 7 different services which 1 billion people use at least once per month. A detailed investigation should be conducted by the DOJ to evaluate the anti-trust and public good issues inherent in such market power. We note in our blog on Identity Theft that corporations need to be held accountable for securing our content and they have a fiduciary responsibility to us to safeguard our content for us as  content owners.

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