The Default Choice, So Hard to Resist

In the wide-open Web, choice and competition are said to be merely “one click away,” to use Google’s favorite phrase. But in practice, the power of digital distribution channels, default product settings and traditional human behavior often matters most.

Google made a big bet early in its history: In 2002, it reached a deal with AOL, guaranteeing a payment of $50 million to come from advertising revenue if AOL made Google its automatic first-choice search engine — the one shown to users by default. Today, Google pays an estimated $100 million a year to Mozilla, coming from shared ad revenue, to be the default search engine on Mozilla’s popular Firefox Web browser in the United States and other countries. Google has many such arrangements with Web sites. Most economists agree that Google’s default deals aren’t anticompetitive. Rivals like Bing, the general search engine from Microsoft, and partial competitors like Yelp, an online review and listing service for local businesses, have their own Web sites and other paths of distribution. Choice, in theory, is one click away. But most people, of course, never make that single click. Defaults win. The role of defaults in steering decisions is by no means confined to the online world. For behavioral economists, psychologists and marketers, defaults are part of a rich field of study that explores “decision architecture” — how a choice is presented or framed. The default values built into product designs can be particularly potent in the infinitely malleable medium of software, and on the Internet, where a software product or service can be constantly fine-tuned.

Default design choices play a central role in the debate over the privacy issues raised by marketers’ tracking of online consumer behavior. The Federal Trade Commission is considering what rules should limit how much online personal information marketers can collect, hold and pass along to other marketers — and whether those rules should be government regulations or self-regulatory guidelines. Privacy advocates want tighter curbs on gathering online behavioral data, and want marketers to have to ask consumers to collect and share their information, presumably in exchange for discount offers or extra services. Advertisers want a fairly free hand to track online behavior, and to cut back only if consumers choose to opt out.