Funding The Web (FTW)

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Browsers, and the browser engines that power them, provide critical public infrastructure to over five billion people and yet no one pays for their browser. To cover the high cost of maintaining such highly complex products, browser vendors and search engine providers have developed a system in which money is levied from search revenue and distributed to browsers. This arrangement benefits both: browsers don’t have an obvious revenue model and web search engines are only relevant to the extent that the web itself is, which in turn requires a high-quality, frictionless browsing experience.

Over the years, this ad hoc system has succeeded in providing funding to browsers but it forms a de facto private government of essential web functions in ways that produce detrimental effects on the digital sphere in general: lack of transparency, poor funding of browser engines, defunding of other parts of the web, massive market concentration, plummeting search quality, harms to privacy, lower cost for effective disinformation, reduced revenue for quality journalism, and loss of opinion pluralism.

This report documents the existing system, analyses its negative externalities so as to determine requirements for alternatives, and proposes multiple paths forward along with enforcement and governance considerations. The existing levy distributes billions of euros annually, and shows no sign of slowing. The objective here is not to break or replace this system, but to place it gradually under the kind of governance that can make it operate in the public interest and in a manner that is resilient to ongoing AI-driven transformations of both browsers and search engines. It proceeds as follows:

A brief historical context leading to the situation of the web today.

A description of the current system, how it evolved from mutualistic to parasitic, and how the levy on search that funds browsers is organised.

A comprehensive description of the problems created by the current system.

A review of the state of the art in evaluating the cost of maintaining a browser, with a surprising spread of evaluations.

An exploration of the space of solutions, set out to develop our imaginary.

Detailed considerations on the governance concerns that go into establishing a better system.

A set of options and considerations pertaining to the enforcement needed to bring a better system into existence.

Considerations pertaining to funding apportioning funds.

And, finally, a conclusion reiterating the sheer enormity of the improvements we can bring to the digital sphere simply by addressing this problem.

This work was funded under a grant by the Digital Infrastructure Insights Fund (https://infrastructureinsights.fund/), for which I am very thankful.

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...