Funding The Web

Executive Summary

Over five billion people use the web through browsers which they never pay for, despite browser engines being complex and costly products. This is possible because browser vendors and search engine providers have developed a funding system — the search levy — in which search engines pay browsers (including public-interest ones like Mozilla Firefox) for traffic under specific conditions. This arrangement has succeeded in keeping browsers free and cutting-edge, but over two decades of operation it has also created an artificial monopoly over search with cascading negative consequences.

Taking a system view of the web, search is a logical place at which to apply a levy. Search extracts value from content and behaviour on the web (search engines would have no value otherwise) and renders it available at a functional control point since it is required for web discovery. Conversely, web content is valuable because browsers, funded by search, provide critical services that render that content available. As a result, the levy initially produced a virtuous cycle through which both search and the web at large grew together. Unfortunately, the levy failed to evolve as the web grew into the essential service that it is today. We don’t need to get rid of this system: to get a healthy web, it is simpler to restructure the levy that we have through better governance.

This report documents how the levy works and which problems it creates, but more importantly what we can do about it.

The search market is worth several hundred billion dollars annually. That market is structured entirely by this search levy which mechanically produces monopoly: the search engine that can pay the most for default placement captures the most users, which generates the most revenue, which enables it to outbid all competitors. This self-reinforcing cycle, confirmed as an illegal monopoly by the US District Court in United States v. Google, has consequences far beyond the search market. It empowers Google to charge supracompetitive advertising prices, which defunds the broader web (including news media) by capturing advertising revenue that would otherwise circulate to publishers and content creators. It eliminates pluralism by concentrating editorial power in the hands of a single search engine. It fails to guarantee funding for browser engines — the most expensive and critical component of web infrastructure — which leaves the evolution of web technology entirely in the hands of the companies that most benefit from the system: Apple and Google. And it provides no mechanism to hold browsers accountable when they betray their users, as Google Chrome does through pervasive deceptive design patterns that harvest people’s entire online behaviour.

A direct consequence of this market structure and of who it grants power to is that the web isn’t a commons but rather private property that the public is granted access to.

The report, informed by research, policy entrepreneurship, a workshop with the browser engine community, and direct (confidential) interviews with industry actors, outlines a set of solutions and proposes the Web Infrastructure Search Endowment (WISE) as the primary reform: a multistakeholder institution that would formalise the existing levy under democratic governance, manage browser and search choice screens through an open, accountable expert group, and condition eligibility on adherence to rules protecting people and funding web infrastructure. WISE can be bootstrapped from a single jurisdiction — most plausibly through the EU's Digital Markets Act. Complementary reforms include fiduciary duties for user agents, the gradual transition of search from a website to an open protocol that supports multihoming, and the funding of standards, testing infrastructure, and advocacy from levy proceeds. Governance draws on the precedent of SWIFT, the coöperative that manages critical global financial infrastructure through multistakeholder coöperation.

Even at a fraction of current levy rates and after accounting for the elimination of monopoly pricing, the revenue potential comfortably exceeds the cost of maintaining multiple browser engines, investing in standards and testing, and funding the democratic institutions needed to govern web infrastructure in the public interest. It makes it possible to reposition the web as an explicitly hegemonic project in support of agency and democracy after decades spent pretending that infrastructure governance is apolitical while monopolies quietly write the rules. The problem has never been that there isn't enough money. The problem is that no one accountable to the public has ever decided where it goes. This report charts a path to changing that.

Get the Funding the Web — From Cartel To Covenant report for more. You can download the PDF or read it online.