Columbia Law School professor Tim Wu's book, The Age of Extraction, argues that dominant tech platforms have shifted from product innovation to monopoly rent extraction through algorithmic placement fees and rising take rates. The analysis examines how these practices impact the cost structures for advertisers and publishers, while detailing ongoing antitrust litigation against major platforms like Amazon and Google.
The immediate implication for streaming and digital media is a shift in how regulators view advertising not as a service, but as a mandatory infrastructure fee. As platforms like Amazon and Google face scrutiny over 'algorithmic attention rents,' the cost of customer acquisition may become a central pillar of antitrust enforcement rather than just a market variable. This connects to the broader ecosystem by challenging the sustainability of high take rates that currently subsidize platform growth at the expense of publisher and seller margins. Watch for the January 2027 trial of California's antitrust case against Amazon to see if courts accept Wu's structural test for monopoly extraction.
Columbia Law professor Tim Wu’s book, The Age of Extraction, details how dominant platforms like Amazon and Google have transitioned from innovation to rent extraction. By charging high algorithmic placement fees, these companies now claim up to 45% of seller revenue, signaling a shift in how regulators view mandatory advertising infrastructure fees.
The book argues that major platforms like Amazon and Google have moved away from innovation and now focus on rent extraction through algorithmic placement fees and high take rates.
According to the analysis, Amazon's combined cut of seller revenue has risen from 19% in 2014 to an estimated 45% in 2023.
Algorithmic attention rents refer to the practice where platforms shift shoppers from organic search results to paid placements, effectively charging sellers for visibility.
The trial for California's antitrust case against Amazon is scheduled for January 2027.
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