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Miller Hudson

If you’ve been watching TV news recently, you’ve almost certainly seen an appeal from a hitherto-unknown outfit named the CCIA (Computer and Communications Industry Association) urging you to contact Democratic Colorado U.S. Sens. Michael Bennet and John Hickenlooper. The CCIA wants you to ask them to oppose Senate Bill 2992.

During a single 30-minute show last week, this commercial played five times, lamenting the potential end of Amazon Prime’s two-day delivery policy. In the likely event you haven’t the slightest idea what this legislation is all about, be advised it is Minnesota Democratic Sen. Amy Klobuchar’s bill designed to curtail self-serving and monopolistic practices on the part of Big Tech’s Big Four — Amazon, Apple, Google and Facebook.

Klobuchar has attracted co-sponsors as far right as Josh Hawley of Missouri. It requires a genuine talent for brazen market manipulation to raise political hackles on both sides of the aisle in Washington. Klobuchar is leading an apparent, bipartisan Senate majority ready to impose anti-trust restrictions on Silicon Valley. As the author of a well-reviewed text examining the history of anti-trust regulation, Klobuchar aims to rein in Big Tech’s power to steer revenues into their own pockets at the expense of retailers who must reach digital consumers using their platforms. It’s no secret that internet markets are rapidly replacing trips to a shopping mall.

As Walmart ascended to the zenith of its retailing success during the 1990s, an acerbic joke circulated among small American manufacturers that went something like this, “We’ve got good news and bad news today: The good news is that Walmart intends to sell our widget. The bad news is that Walmart wants to buy our widgets.” The problem, of course, was and remains that Walmart squeezes so hard on vendor margins ("Always the lowest price") that its suppliers earn little more despite producing ten- or twenty-times as many widgets. As rural Walmarts were putting Main Street retailers out of business, they became the country’s largest employer.

Sam Walton intended to offer a broader range of quality goods across the nation, a worthy goal to be sure, but even Walmart has had to bend its business model to accommodate the convenience of shop-at-home indolence. Unlike Kmart and numerous other retailers that have simply vanished, the Walton family successfully navigated their transition into digital marketing. It may not have been Sam’s expectation that he would shower his children and grandchildren with sufficient profits to purchase the Denver Broncos for $4.5 billion, but their riches can actually be traced. Rarely is that true in today’s digital marketplace.

Writing in the London Review of Books, Donald Mackenzie explains, “Click… on a news website. If you have a fast internet connection, you will see the article almost immediately, but the slots for adverts will remain empty for another second or two. The ads which then appear aren’t generally chosen in advance. Instead, a near instantaneous, automated auction of each slot goes on behind the scenes to determine which ad you will be shown.” Selection algorithms that can view your cookies and browsing history prompt supply-side platforms to bid in these flash auctions. Submitted bids are then evaluated by demand-side platforms that choose winners. You don’t have to be a data nerd to imagine the opportunities for steering ad traffic to benefit platform managers.

Price Waterhouse spent 15 months auditing ad revenue for publishers in Great Britain and were unable to track where 15% of revenues wound up. Were they diverted? Were "bot" hackers stealing them with bogus clicks? Who knows? I’m a lousy target for digital advertisers, rarely glancing at ads that pop up on my screen. When I do, digital bloodhounds will track me for months. What do you think occurs when you ask Google for a business near you? How are vendor listings prioritized, or even earn a mention? Colorado businesses have questions about the fairness of this process.

Colorado Congressman Ken Buck (R-Windsor) and Joe Neguse (D-Lafayette) have provided leadership on the House side to set regulatory ground rules for internet platforms. Last week Buck held a Zoom forum with small business owners to hear their concerns. Aside from the fact that Amazon demands an eye-popping 30% tariff skimmed off the top, they’ve been found to use proprietary sales data to recruit third-party sellers who will provide copycat products to compete with independent businesses already using their platform — not to mention holding their vendors hostage by requiring them to purchase Amazon’s warehousing and shipping systems.

When you make that call to your senators, encourage support for SB-2992 and market rules that level the playing field. Majority leader Chuck Schumer (D-New York) has scheduled a vote for later this month, but Washington D.C. beltway gossip suspects supporters are going weak in the knees before the tsunami of Big Tech spending. Apparently, advantage is worth defending.

Miller Hudson is a public affairs consultant and a former Colorado legislator.

Miller Hudson is a public affairs consultant and a former Colorado legislator.

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