Selling Certification, Content Moderation, and Attention

Résumé

Social media platforms moderate content in many ways, balancing the desire of content providers to be seen and trusted with consumers’ desire to see and have certified only the content that they value. Content moderation by platforms has come under regulatory scrutiny. We introduce an abstract model of content moderation for sale, where a platform can channel attention in two ways: direct steering that makes content visible to consumers and certification that controls what consumers know about the content before further engagement. The platform optimally price discriminates with both steering and certification, with content from higher willingness-to-pay providers enjoying higher certification and more views. The platform increases profits by cross-subsidizing content from low willingness-to-pay providers that appeals to consumers with higher willingness-to-pay content that does not. This cross-subsidization can also benefit consumers by making content more diverse, suggesting that regulation pushing for accurate certification may be harmful. We identify cases where imperfect certification might be most likely to occur and when forcing higher accuracy would be beneficial.