Facebook’s dominance is built on anti-competitive behavior(insights.som.yale.edu)
insights.som.yale.edu
Facebook’s dominance is built on anti-competitive behavior
https://insights.som.yale.edu/insights/facebook-s-dominance-is-built-on-anti-competitive-behavior
226 comments
I think the very unhealthy dominance of Facebook will only start to properly recede when countries outside the USA start to block its use. This is a highly predatory company that takes away sovereignty in each nation's cyberspace and it really only makes sense for foreign countries to block it and either let their own national corporate replacements emerge (as China has done) or foster the use of open social networks and protocols (my strong preference).
This doesn't solve the problem for people in the USA of course (well, other nations fostering open social networks will help some). The USA obviously needs to look at antitrust measures to fix the issue at home. But other countries can't afford to wait for that to happen.
This doesn't solve the problem for people in the USA of course (well, other nations fostering open social networks will help some). The USA obviously needs to look at antitrust measures to fix the issue at home. But other countries can't afford to wait for that to happen.
Small countries can ban facebook from doing certain things. Ultimately, some sovereignty exists even in global commerce. If New Zealand made (eg) political advertising, targeted advertising, or such ilegal, Facebook would stop doing it in New Zealand.
That is treating the symptom, but it is not totally ineffective.
Treating the problem is dealing with the monopoly. The current state of antitrust laws, norms and regulatory pressure is entirely useless. It's entirely based around regulating 19th century monopolies, and tempered by 20th century failings.
Facebook, Amazon, & Google are not Bell. With the old infrastructure monopolies, regulators needed to break up the monopoly without losing the services & capital investments. They needed post-antitrust companies to still be viable.
Facebook doesn't have that problem. Facebook could disappear tomorrow and consumers would barely be inconvenienced. Social media is not in short supply and doesn't require much capital. Facebook didn't need to sink much capital into building it. Their competitors will not need much capital to replace it. All they need is for Facebook to move out of the way.
Antitrust action, at least in facebook's case, doesn't need to be precise. It just needs to be strong.
That is treating the symptom, but it is not totally ineffective.
Treating the problem is dealing with the monopoly. The current state of antitrust laws, norms and regulatory pressure is entirely useless. It's entirely based around regulating 19th century monopolies, and tempered by 20th century failings.
Facebook, Amazon, & Google are not Bell. With the old infrastructure monopolies, regulators needed to break up the monopoly without losing the services & capital investments. They needed post-antitrust companies to still be viable.
Facebook doesn't have that problem. Facebook could disappear tomorrow and consumers would barely be inconvenienced. Social media is not in short supply and doesn't require much capital. Facebook didn't need to sink much capital into building it. Their competitors will not need much capital to replace it. All they need is for Facebook to move out of the way.
Antitrust action, at least in facebook's case, doesn't need to be precise. It just needs to be strong.
>Facebook could disappear tomorrow and consumers would barely be inconvenienced.
Correction: If facebook disappeared tomorrow YOU would be barely inconvenienced. I don't think you accurately speak for all of Facebook's 2 billion monthly users and the millions of businesses and orgs that advertise on the platform. (paid or unpaid)
Correction: If facebook disappeared tomorrow YOU would be barely inconvenienced. I don't think you accurately speak for all of Facebook's 2 billion monthly users and the millions of businesses and orgs that advertise on the platform. (paid or unpaid)
I think you're misunderstanding me. I don't mean that FB sucks. I don't care either way.
I mean this: If toyota were to disappear tomorrow, $250bn worth of car-production capacity would disappear. Fewer cars could be made, at least until new investment in factories and such.
If FB disappeared, people would still have plenty of social media to access... or other forms of media, communication and entertainment.
I mean this: If toyota were to disappear tomorrow, $250bn worth of car-production capacity would disappear. Fewer cars could be made, at least until new investment in factories and such.
If FB disappeared, people would still have plenty of social media to access... or other forms of media, communication and entertainment.
Maybe future generations will realize how shitty FB is and stop using it (one can hope!)
A bigger problem is FB owns much better products like WhatsApp - it is easy to quit FB than WhatsApp in my opinion
A bigger problem is FB owns much better products like WhatsApp - it is easy to quit FB than WhatsApp in my opinion
None of these are easy to quit because of network effects.
Rick has to use FB because his grandkids' photos are there. Morty uses whatsapp because his soccer club posts practice times there. Network effects are essentially like infrastructure.
The problem isn't shitty FB. FB can be as shitty as it wants to be. The problem is their power, especially as a media company.
Rick has to use FB because his grandkids' photos are there. Morty uses whatsapp because his soccer club posts practice times there. Network effects are essentially like infrastructure.
The problem isn't shitty FB. FB can be as shitty as it wants to be. The problem is their power, especially as a media company.
As part of the "future generation" (Maybe? I'm 18 years old), almost none of my peers use Facebook anymore. At least not actively. We do however still use WhatsApp and Instagram.
While Instagram and WhatsApp are still used the most, by far, there are some other social media apps that are also heavily used. Most notably Snapchat and TikTok.
While Instagram and WhatsApp are still used the most, by far, there are some other social media apps that are also heavily used. Most notably Snapchat and TikTok.
I recently signed in for the first time in a long while in order to chat with a friend of mine in the Navy. While my "friend's" list is about 700 people, it looked like no more than a couple of dozen of them actually post anything regularly. That's a big change from 3 or so years ago.
Obligatory anecdotes are not data disclaimer.
Obligatory anecdotes are not data disclaimer.
So you mean the solution to the FB “problem” is people using their own free will and it doesn’t involve the Nanny State?
Nanny states are never a good idea. But lets say we prefer nanny state and lets say it works with FB. There is no guarantee that it will always work with every other shitty FB, or if it works, it might become China like, which is worse.
The best long term solution is to educate people - make them understand how much of their privacy is being violated, how much harm social media is causing (broadly speaking here, I know social media can be good too, once in a while) etc. If the general public understands these, they might stop/reduce willingly giving so much of their data to FB.
That said, not many people seemed to care (outside of tech circles) when Snowden happened :(
The best long term solution is to educate people - make them understand how much of their privacy is being violated, how much harm social media is causing (broadly speaking here, I know social media can be good too, once in a while) etc. If the general public understands these, they might stop/reduce willingly giving so much of their data to FB.
That said, not many people seemed to care (outside of tech circles) when Snowden happened :(
Nanny-state/libertarian arguments against antitrust are misguided.
I am against a nanny state. Deeply against it. It gets abused of power. is invariably useless and freedom is important for its own sake.
Monopolies extend these problems into the commercial realm. Nanny companies instead of Nanny State. Facebook is worse than most state media monopolies.
It's like living in a company town and complaining about the nanny state. Just let the company rule us in peace.
I am against a nanny state. Deeply against it. It gets abused of power. is invariably useless and freedom is important for its own sake.
Monopolies extend these problems into the commercial realm. Nanny companies instead of Nanny State. Facebook is worse than most state media monopolies.
It's like living in a company town and complaining about the nanny state. Just let the company rule us in peace.
Facebook doesn’t have coercive power to force me to do anything. The government does.
It’s not Libertarianism. It’s a fundamental distrust of governments.
It’s not Libertarianism. It’s a fundamental distrust of governments.
That's what I mean. Your distrust should extend to things that have the same qualities as "government." At the more monopolistic end of the spectrum, and in many real life examples, they're a type of government... in the sense that they govern. This can also be true of very powerful religious institutions.
Power, coercive or otherwise, is more complex than that.
If all media is state media, that's something to seriously distrust. If all media is FB, the church of england church... same problems. Whether or not media is "coercive" is uninteresting semantics.
Whether it's big tech or ccp "soft power" is a technicality. Abusable power is abusable power, and being nannied is a symptom.
Sure, you can still kinda hide from Facebook. Takes a little effort, but whatever. You can also get around the great firewall, if you really want to. A lot of chinese people do, some of the time. Most of the time though, most people read the state approved internet. Most of the time, most people are within the influence of the FB machine... and it's still gaining power.
Power, coercive or otherwise, is more complex than that.
If all media is state media, that's something to seriously distrust. If all media is FB, the church of england church... same problems. Whether or not media is "coercive" is uninteresting semantics.
Whether it's big tech or ccp "soft power" is a technicality. Abusable power is abusable power, and being nannied is a symptom.
Sure, you can still kinda hide from Facebook. Takes a little effort, but whatever. You can also get around the great firewall, if you really want to. A lot of chinese people do, some of the time. Most of the time though, most people read the state approved internet. Most of the time, most people are within the influence of the FB machine... and it's still gaining power.
Can Facebook have me arrested? Take my property via “civil forfeiture” or “imminent domain”? Can they force me to pay taxes? Do they employ police who can shoot me in the back to make me use their services? Can they hire people to choke me for nine minutes? Do their employees have military styled weapons who can be summoned to someone’s house just by making a false report?
Comparing any modern private company’s power to the government is like comparing a flea to the sun.
Comparing any modern private company’s power to the government is like comparing a flea to the sun.
> Comparing any modern private company’s power to the government is like comparing a flea to the sun.
Well, that's trivially true for corporations, since each corporation is itself an exercise of government power, so all of their power is a subset of government power.
Well, that's trivially true for corporations, since each corporation is itself an exercise of government power, so all of their power is a subset of government power.
The only remedy to this is a history lesson. Do you know that the British Empire, and many of your colonies started as chartered monopolies? Not just history either.
Anyway, what do those things have to do with the nanny state? Treating "government" as a monolith is like treating "capitalism" as a monolith.
Comparing a police force to a media organisation is a bad comparison. You made it, not me.
Anyway, what do those things have to do with the nanny state? Treating "government" as a monolith is like treating "capitalism" as a monolith.
Comparing a police force to a media organisation is a bad comparison. You made it, not me.
You mean like the government that wants to outlaw end to end encryption, run by President who threaten to “shut down Twitter” because he said something they don’t like.
Corporations are creations of governments - they literally can't exist as a separate entity without somebody strong enough blessing it (and then protecting their rights as a separate entity, by force if needed).
Thus, if you distrust governments, you should automatically distrust any and all corporations. In fact, that is one way to deal with monopolies - instead of forcibly breaking them apart, let the government simply stop recognizing and enforcing abstract property rights on capital past a certain limit. That would be a solution that strictly reduces the size and power of the government, but I suspect you'd like it even less than anti-trust.
Thus, if you distrust governments, you should automatically distrust any and all corporations. In fact, that is one way to deal with monopolies - instead of forcibly breaking them apart, let the government simply stop recognizing and enforcing abstract property rights on capital past a certain limit. That would be a solution that strictly reduces the size and power of the government, but I suspect you'd like it even less than anti-trust.
> It's entirely based around regulating 19th century monopolies,
This isn't as problematic as you suggest. We don't need an act of Congress to deal with FAAMG.
The way the laws are enforced and interpreted has changed in a very meaningful way. Read the A&P cases and ask yourself, "if Congress hasn't changed the law then what's up with Walmart?"[1]
The DOJ Antitrust division is asleep at the switch. There are a lot of reasons for this. One reason is the Microsoft case. The DOJ won at trial big time. At trial they won a break up. This was scaled back enormously on appeal, and it damaged the careers of the very talented lawyers involved. This created a high degree of risk aversion in careerist antitrust litigators. Something similar happened after Enron (fancy people were upset by how vigorously the DOJ pursued members of their class), which partially explains the lack of prosecutions after the 2008 financial crisis.
There was also a sea-change in ideology coming from the law and economics movement, and from the re-framing of antitrust through the "consumer welfare" lens.
In practice, "consumer welfare tests" only consider price. They do not consider quality. To "consumer welfare" tests, a $50 phone plan that sells my location without my consent is superior to a $55 phone plan that does not
[1] https://www.nytimes.com/1949/02/25/archives/a-p-loses-appeal...
This isn't as problematic as you suggest. We don't need an act of Congress to deal with FAAMG.
The way the laws are enforced and interpreted has changed in a very meaningful way. Read the A&P cases and ask yourself, "if Congress hasn't changed the law then what's up with Walmart?"[1]
The DOJ Antitrust division is asleep at the switch. There are a lot of reasons for this. One reason is the Microsoft case. The DOJ won at trial big time. At trial they won a break up. This was scaled back enormously on appeal, and it damaged the careers of the very talented lawyers involved. This created a high degree of risk aversion in careerist antitrust litigators. Something similar happened after Enron (fancy people were upset by how vigorously the DOJ pursued members of their class), which partially explains the lack of prosecutions after the 2008 financial crisis.
There was also a sea-change in ideology coming from the law and economics movement, and from the re-framing of antitrust through the "consumer welfare" lens.
In practice, "consumer welfare tests" only consider price. They do not consider quality. To "consumer welfare" tests, a $50 phone plan that sells my location without my consent is superior to a $55 phone plan that does not
[1] https://www.nytimes.com/1949/02/25/archives/a-p-loses-appeal...
Antitrust legislation & enforcement are inextricably linked, for all sorts of reasons. This isn't just a US problem.
The entire conventional legal approach was (and still is) flawed. First, monopolies tend to form in The way it works is by "proving" anticompetitive and/or monopolistic behaviour, and fining companies.
Take the recent EU ruling (and pending copycat cases in the US) on the adwords "platform monopoly." The idea was that (1) Google controls the search engine marketing platform and (2) they use this control to favour their own search engine. They proved it. Google got a "cost of doing fine."
First, the whole premise is. If a monopoly exists, we state prosecutors shouldn't need to prove monopolistic actions. Monopolistic practices are proof of a monopoly, but the logical premise behind antitrust law is that monopolies are harmful... and we assume that anti-competitive/monopolistic behaviour happens. Let 3rd parties sue privately for specific abuses, but the state should be focused on preventing monopoly not retroactively punishing use of that monopoly.
If prosecutors have to prove individual abuses separately, they will never make a dent. Most "monopolistic behaviours" are not proveable. They may not even be decisions, they're just what happens in a monopoly.
I totally agree with you about bogus "consumer welfare tests." This is academic hogwash, and it's probably there to provide cover for inaction.
Second, "what to do now" is unavoidably hard, subjective and uncomfortable for a court. Cases vary too much.
From a "greater good perspective," FB could just be shut down. As long as data is destroyed, no one but FB shareholders (and employees) lose. I don't mean that they should be shut down, just that there are no external welfare concerns.
Google is more complicated. Alphabet needs to be restructured into 5-6 companies. Google's (high quality and public benefiting) R&D would be in danger. You'd need to enforce non-collusion between infrastructure, content & ad platforms. It's not something a court can do well, using 19th century case law especially. Case law says nothing about whether or not a ruling was a success.
Mostly, antitrust law should deter monopolies from forming in the first place. Monopolies should voluntarily avoided by companies, because antitrust should be something that doesn't pay to mess with. As things stand, monopoly is the best strategy.
Last, a lot of what needs to happen needs to happen outside of strict antitrust bounds. The phone plans available to you are more closely related to political decisions (eg radio spectrum) than the actions of individual companies. Facebook's monopoly, the most worrying aspects of it, rest on data collection and advertising practices that most people find horrible, and believe should be illegal.
Antitrust may not have even been necessary if (a) those mergers hadn't happened (b) personal data hoarding wasn't a free-for-all and (c) advertising was not so unregulated.
I agree about sleeping on the wheel though.
The entire conventional legal approach was (and still is) flawed. First, monopolies tend to form in The way it works is by "proving" anticompetitive and/or monopolistic behaviour, and fining companies.
Take the recent EU ruling (and pending copycat cases in the US) on the adwords "platform monopoly." The idea was that (1) Google controls the search engine marketing platform and (2) they use this control to favour their own search engine. They proved it. Google got a "cost of doing fine."
First, the whole premise is. If a monopoly exists, we state prosecutors shouldn't need to prove monopolistic actions. Monopolistic practices are proof of a monopoly, but the logical premise behind antitrust law is that monopolies are harmful... and we assume that anti-competitive/monopolistic behaviour happens. Let 3rd parties sue privately for specific abuses, but the state should be focused on preventing monopoly not retroactively punishing use of that monopoly.
If prosecutors have to prove individual abuses separately, they will never make a dent. Most "monopolistic behaviours" are not proveable. They may not even be decisions, they're just what happens in a monopoly.
I totally agree with you about bogus "consumer welfare tests." This is academic hogwash, and it's probably there to provide cover for inaction.
Second, "what to do now" is unavoidably hard, subjective and uncomfortable for a court. Cases vary too much.
From a "greater good perspective," FB could just be shut down. As long as data is destroyed, no one but FB shareholders (and employees) lose. I don't mean that they should be shut down, just that there are no external welfare concerns.
Google is more complicated. Alphabet needs to be restructured into 5-6 companies. Google's (high quality and public benefiting) R&D would be in danger. You'd need to enforce non-collusion between infrastructure, content & ad platforms. It's not something a court can do well, using 19th century case law especially. Case law says nothing about whether or not a ruling was a success.
Mostly, antitrust law should deter monopolies from forming in the first place. Monopolies should voluntarily avoided by companies, because antitrust should be something that doesn't pay to mess with. As things stand, monopoly is the best strategy.
Last, a lot of what needs to happen needs to happen outside of strict antitrust bounds. The phone plans available to you are more closely related to political decisions (eg radio spectrum) than the actions of individual companies. Facebook's monopoly, the most worrying aspects of it, rest on data collection and advertising practices that most people find horrible, and believe should be illegal.
Antitrust may not have even been necessary if (a) those mergers hadn't happened (b) personal data hoarding wasn't a free-for-all and (c) advertising was not so unregulated.
I agree about sleeping on the wheel though.
I don't see how having national backed social media platforms to the likes china does is a better alternative for end users compared to facebook.
If you are a proponent for open speech this will accomplish the opposite since it simplifies state issued censorship.
I understand that bashing on facebook is a popular narrative here and they have made significant mistakes but it can hardly be argued the platform doesn't bring value to a significant share of people.
I understand that bashing on facebook is a popular narrative here and they have made significant mistakes but it can hardly be argued the platform doesn't bring value to a significant share of people.
> I understand that bashing on facebook is a popular narrative here and they have made significant mistakes but it can hardly be argued the platform doesn't bring value to a significant share of people.
You don't think other sites can provide the same kind of value, while being far more respectful of your privacy and better reflecting the values of a country's culture? I sure as hell would prefer a German Facebook rather than the Facebook we have now that drowns out all other alternatives while allowing hate speech to spread unabated and trampling all over my right to privacy and to control my data. It's not even the fact that an alternative needs to be state-backed. It would be enough for a government to ban Facebook to allow local alternatives to grow a user base.
You don't think other sites can provide the same kind of value, while being far more respectful of your privacy and better reflecting the values of a country's culture? I sure as hell would prefer a German Facebook rather than the Facebook we have now that drowns out all other alternatives while allowing hate speech to spread unabated and trampling all over my right to privacy and to control my data. It's not even the fact that an alternative needs to be state-backed. It would be enough for a government to ban Facebook to allow local alternatives to grow a user base.
I think most would agree that if there were a globally connected (meaning countries are not silos), open and privacy first alternative would exist they would want to switch however I think once these platforms grow they would hit similar problems:
* To operate in multiple countries so people can stay connected you have to abide by local laws even if they don't match the typical values.
* Social media is inherently winner-takes all due to the requirement of critical mass and connectedness. The winners have shifted over time (myspace) before but it seems harder to do than with other consumer services.
* Moderation of billions is a hard unsolved problem and is a game you can't win. You walk the tight rope of either allowing hate speech or being too overreaching in censoring. I'm not sure other startups will solve this any better.
* I'm personally not a huge fan of governments messing with competition, especially not for services where the people themselves choose to use it or not. Some share of people like using facebook and I don't feel banning them for the sake of their success is the right solution. While I'm from europe myself I feel over-regulating is one (among many) of the reasons why there are almost no dominant tech players here.
* Monetisation and use of user data. While there are other monetisation paths many people are actually ok with the trade of their data for features and should have this choice. The larger tech companies probably have some of the most well organised and privacy aware advertising platforms compared to smaller players where the likelihood of privacy incidents is arguably higher.
* To operate in multiple countries so people can stay connected you have to abide by local laws even if they don't match the typical values.
* Social media is inherently winner-takes all due to the requirement of critical mass and connectedness. The winners have shifted over time (myspace) before but it seems harder to do than with other consumer services.
* Moderation of billions is a hard unsolved problem and is a game you can't win. You walk the tight rope of either allowing hate speech or being too overreaching in censoring. I'm not sure other startups will solve this any better.
* I'm personally not a huge fan of governments messing with competition, especially not for services where the people themselves choose to use it or not. Some share of people like using facebook and I don't feel banning them for the sake of their success is the right solution. While I'm from europe myself I feel over-regulating is one (among many) of the reasons why there are almost no dominant tech players here.
* Monetisation and use of user data. While there are other monetisation paths many people are actually ok with the trade of their data for features and should have this choice. The larger tech companies probably have some of the most well organised and privacy aware advertising platforms compared to smaller players where the likelihood of privacy incidents is arguably higher.
[deleted]
> I think most would agree that if there were a globally connected (meaning countries are not silos)
The best solution to this would be regional alternatives operating on a shared standard. This would avoid the problem of values not reflecting your culture's values, not having to moderate billions of people, etc.
> I'm personally not a huge fan of governments messing with competition
I'm not a fan of the US's bizarre mix of laissez-faire "fuck you" capitalism and systems of regulatory capture. If all you value is rewarding any one company with an entire market because "they're successful", then fine. But the point of markets isn't to enrich a single company to the detriment of everybody else. It's to benefit the population.
> While there are other monetisation paths many people are actually ok with the trade of their data for features and should have this choice
There is no choice being made here. People aren't aware of how much of their date is being collected by companies like Facebook.
> The larger tech companies probably have some of the most well organised and privacy aware advertising platforms
I can't take you seriously. You must be joking.
The best solution to this would be regional alternatives operating on a shared standard. This would avoid the problem of values not reflecting your culture's values, not having to moderate billions of people, etc.
> I'm personally not a huge fan of governments messing with competition
I'm not a fan of the US's bizarre mix of laissez-faire "fuck you" capitalism and systems of regulatory capture. If all you value is rewarding any one company with an entire market because "they're successful", then fine. But the point of markets isn't to enrich a single company to the detriment of everybody else. It's to benefit the population.
> While there are other monetisation paths many people are actually ok with the trade of their data for features and should have this choice
There is no choice being made here. People aren't aware of how much of their date is being collected by companies like Facebook.
> The larger tech companies probably have some of the most well organised and privacy aware advertising platforms
I can't take you seriously. You must be joking.
> The best solution to this would be regional alternatives operating on a shared standard. This would avoid the problem of values not reflecting your culture's values, not having to moderate billions of people, etc.
You are just shifting the problem here to the edges between the different systems.
> I'm not a fan of the US's bizarre mix of laissez-faire "fuck you" capitalism and systems of regulatory capture. If all you value is rewarding any one company with an entire market because "they're successful", then fine. But the point of markets isn't to enrich a single company to the detriment of everybody else. It's to benefit the population. > There is no choice being made here. People aren't aware of how much of their date is being collected by companies like Facebook.
I don't claim the US has the optimal system here but I think it's dangerous to claim to know what people want under the guise that they don't know what they are doing. People will have vote with their actions if they want things to change.
> I can't take you seriously. You must be joking.
I failed to add enough context but I was mainly talking about advertisement based companies that chose this monetisation path. Having worked at start-ups I'm highly confident that many of them don't have security and/or privacy (anonymity) as a first (or second or third) priority. FB has made grave errors here but I'm not sure I trust "random FB replacer" any more given FB is under a magnifying glass not with people watching their every move.
You are just shifting the problem here to the edges between the different systems.
> I'm not a fan of the US's bizarre mix of laissez-faire "fuck you" capitalism and systems of regulatory capture. If all you value is rewarding any one company with an entire market because "they're successful", then fine. But the point of markets isn't to enrich a single company to the detriment of everybody else. It's to benefit the population. > There is no choice being made here. People aren't aware of how much of their date is being collected by companies like Facebook.
I don't claim the US has the optimal system here but I think it's dangerous to claim to know what people want under the guise that they don't know what they are doing. People will have vote with their actions if they want things to change.
> I can't take you seriously. You must be joking.
I failed to add enough context but I was mainly talking about advertisement based companies that chose this monetisation path. Having worked at start-ups I'm highly confident that many of them don't have security and/or privacy (anonymity) as a first (or second or third) priority. FB has made grave errors here but I'm not sure I trust "random FB replacer" any more given FB is under a magnifying glass not with people watching their every move.
> People will have vote with their actions if they want things to change.
This is why populists or platforms like FB make sure that people either don’t know that things can change or that they already live in the best version of the reality and, well, everyone else has it worse.
This is why populists or platforms like FB make sure that people either don’t know that things can change or that they already live in the best version of the reality and, well, everyone else has it worse.
Right because FB controls people’s access to information to the point where they keep people from knowing “The Truth”.
"People will have vote with their actions if they want things to change."
That isn't how monopolies work - while some people can individually make huge sacrificies and not use any Facebook product, in reality that isn't practical and few people will because they are a monopoly.
This isn't like buying a car where there are multiple providers who all use the same roads and petrol. Or the mobile phone system, where there are standards (GSM) and regulations so you have a choice of physical and virtual networks.
In my mind, breaking up Facebook would be a massively pro-market (increase choice and competition) and massively pro-capitalist (increase investment of capital, profit and innovation) move.
That isn't how monopolies work - while some people can individually make huge sacrificies and not use any Facebook product, in reality that isn't practical and few people will because they are a monopoly.
This isn't like buying a car where there are multiple providers who all use the same roads and petrol. Or the mobile phone system, where there are standards (GSM) and regulations so you have a choice of physical and virtual networks.
In my mind, breaking up Facebook would be a massively pro-market (increase choice and competition) and massively pro-capitalist (increase investment of capital, profit and innovation) move.
If it was Facebook alone, I'd agree that people should have the choice.
But its not just Facebook. It's WhatsApp. It's Instagram (the 2nd largest network, no?)
It seems to be very anti-competitive to control 2/3 of the biggest social media platforms. They need broken up.
But its not just Facebook. It's WhatsApp. It's Instagram (the 2nd largest network, no?)
It seems to be very anti-competitive to control 2/3 of the biggest social media platforms. They need broken up.
It’s now a “huge sacrifice” not to use Facebook?
Yes, It's a huge sacrifice not to use the primary (and in most cases only) messaging and event organising platform in your local network. And usually that platform is Messenger or WhatsApp. Sometimes it's IG.
And yes, feel free to argue that you can still be reached on SMS, Signal or Telegram or literally any other messaging platform. But good luck convincing even your closest friends and family to join.
And yes, feel free to argue that you can still be reached on SMS, Signal or Telegram or literally any other messaging platform. But good luck convincing even your closest friends and family to join.
So now we need the government to step in because you can’t convince your friends to use an alternate platform?
I’m part of a non profit that was using FB messenger until one person said they didn’t want to use FB. Everyone switched over to GroupMe.
I have a few ongoing group chats over SMS.
I’m part of a non profit that was using FB messenger until one person said they didn’t want to use FB. Everyone switched over to GroupMe.
I have a few ongoing group chats over SMS.
Good for you. Anecdotally I'd lose touch with casual acquaintances/friends and spontaneous meetups if someone had to send me an SMS to get in touch with me, and people under 30 will corroborate that.
I wasn't saying anything about government regulations, don't put words in my mouth.
I wasn't saying anything about government regulations, don't put words in my mouth.
So just like any other product, if you choose not to use it, you don’t get to take advantage of it.
It's a trade off. Do you want to risk being censored by your own country or risk being censored by San Francisco?
Can I democratically elect who will represent me in a Silicon Valley company? If not, I'm going to choose my own country.
I am aware that citizens of more repressive governments might not make the same choice.
I am aware that citizens of more repressive governments might not make the same choice.
Because of both the electoral college and two Senator per state. If you live in a more populous state, your vote is worth a lot less than someone in Middle of Nowhere Nebraska.
Passing laws is fine as long as your side is in power to enforce them the way that you like.
Passing laws is fine as long as your side is in power to enforce them the way that you like.
What choice? Repressive governments typically have minimal difficulty getting Silicon Valley to repress their subjects on their behalf.
What's the difference to being censored by a company that has no obligations towards me?
If it's something like BBC then I still prefer it to a private monopoly.
BBC is technically national but at the same time pretty independent in its reporting.
BBC is technically national but at the same time pretty independent in its reporting.
I'd challenge that assumption. The BBC has arguably become much more of a state broadcaster than a public interest broadcaster in recent decades. https://www.lrb.co.uk/the-paper/v40/n24/owen-bennett-jones/c...
As an outsider who has spent the past 7 years in the UK, I feel like the definition of “pretty independent” has become a bit more fluid.
But yeah, it’d be nice if my taxes were spent on the problems we’re discussing here, rather than giving people access to cheaper Tim Tams.
But yeah, it’d be nice if my taxes were spent on the problems we’re discussing here, rather than giving people access to cheaper Tim Tams.
In what world is having geo-specific social networks run by corporations a good outcome? "Like China" is a pretty bad north star for almost any country.
I quite like the geo-specific mastodon instances I have seen (eg cloud island for NZ).
For one thing, their moderation only needs to comply with local norms and laws - no need to ban e.g. “female-presenting nipples” unless your community actually wants to.
For one thing, their moderation only needs to comply with local norms and laws - no need to ban e.g. “female-presenting nipples” unless your community actually wants to.
Why would it be worse than Facebook?
A state regulated and censored siloed system where you can't communicate across borders hardly seems like the thing to strive for if you want to displace FB.
edited to reword as to not assume intentions of op
edited to reword as to not assume intentions of op
Please don't misrepresent me.
In no place in my comment did I describe WeChat as better to FB (and I'm not interested in taking a position either way).
Nor was I promoting this:
> A state regulated and censored siloed system where you can't communicate across borders
Quite the opposite. I made it quite clear that my strong preference was for the fostering of open social networks & protocols.
* edit: the parent commenter edited their comment after my reply without noting the edit.
In no place in my comment did I describe WeChat as better to FB (and I'm not interested in taking a position either way).
Nor was I promoting this:
> A state regulated and censored siloed system where you can't communicate across borders
Quite the opposite. I made it quite clear that my strong preference was for the fostering of open social networks & protocols.
* edit: the parent commenter edited their comment after my reply without noting the edit.
Sorry, I added the edit, I'm quite new to this comment section and assumed it might show my edit by default
Just to check, between Facebook and WeChat, which company engages more in predatory, racist and violent practices and is complicit in unthinkable brutality and violations of human rights?
is it a competition? Because nobody is winning. Nobody in the world says, oh please Americans come to fuck us because at least you use lubricant.
But you don't have a choice. Either it's Facebook, which is relatively transparent and can be sued, regulated and criticized in the media. Or it's another social network that you have absolutely no recourse against.
Hi Mark nice of you passing by.
> Either it's Facebook, which is relatively transparent
Nice joke to break the ice.
> and can be sued, regulated and criticized in the media
Well, the same applies to any other App, and yes this include tik-tok or Wechat. China jurisdiction is not supranational. The situation inside China is different.
> Or it's another social network that you have absolutely no recourse against.
If the network is operating legally in your country then you have resource. If you go out of your way and sign-up to the Somalian Buccaneers App and they rob you then you are fucked but it was basically your fault.
As I know people simplify to score fake debate points, I am not saying to install tik-tok or we-chat, I did it for a few days and both are terrible apps with very creepy features. But guess what so are Instagram and Facebook, so I dont use them either. Nobody needs them really.
> Either it's Facebook, which is relatively transparent
Nice joke to break the ice.
> and can be sued, regulated and criticized in the media
Well, the same applies to any other App, and yes this include tik-tok or Wechat. China jurisdiction is not supranational. The situation inside China is different.
> Or it's another social network that you have absolutely no recourse against.
If the network is operating legally in your country then you have resource. If you go out of your way and sign-up to the Somalian Buccaneers App and they rob you then you are fucked but it was basically your fault.
As I know people simplify to score fake debate points, I am not saying to install tik-tok or we-chat, I did it for a few days and both are terrible apps with very creepy features. But guess what so are Instagram and Facebook, so I dont use them either. Nobody needs them really.
> China jurisdiction is not supranational
It absolutely is.
It absolutely is.
How do I save comments?
I think it's a draw.
The problem is that the countries most likely to block it are also the ones most likely to replace it with much worse.
The majority of users/voters in most countries do not want their governments to ban Facebook. Many countries had local alternatives that went out of business because users switched to Facebook.
Sounds about right as Facebook have admitted they cannot grow anymore in the US. Any growth must come from outside the US.
We need laws. Operating a social network should be subject to specific rules like : 1- Everything is public, no private messages. 2- Public unlimited standardised API. 3- No denial of access, no censorship, without court order.
I get #2 and #3, but why #1? I like being able to "whisper" to people privately. Private messaging has been part of all communication protocols and pre-web2.0 social networks, and even in real life, you can lean in towards someone and, well, whisper something in their ear.
I suppose it might be worth recognizing that a social media system with access to your private messages both gives them a lot of power, and confuses users. Privacy on social media isn't really trustworthy. If you want to whisper, do it via email, where at least it isn't on Facebook's servers.
I don't say anything on Facebook that I wouldn't want on the front page of the New York Times. I don't trust either them or other users to keep it private. (I don't even like putting sensitive things in email, if I can do it in person instead.)
I don't say anything on Facebook that I wouldn't want on the front page of the New York Times. I don't trust either them or other users to keep it private. (I don't even like putting sensitive things in email, if I can do it in person instead.)
There's no reason why a social media platform can't implement its private messaging in a way that is functionally equivalent to email in terms of privacy (but integrated with that platform).
Fair enough - you're basically erring on the side of caution, although it limits the usefulness of the network to you. Can't say I blame you. :)
it should be clear for the user when what he says is private vs public. it should not be the same app. plus private messaging apps don't need to be regulated, they just need strong crypto.
Antitrust laws were always based on supply side monopolies, while this is a demand side monopoly, and would be a tricky case for anti trust to prove.
If the mandate is to do what is best for customers, then the best solution I can think of is to let FB function as one entity but toughen the norms on data collection. The other thing is Facebook should not inhibit any other social network trying to grow using FB's graph. A good example is how Instagram grew with the import of Twitter social graph, and when it came to Facebook, it grew further because it could import the connections that Facebook already had access to. In the name of privacy, it is a good idea to block that, but that essentially inhibits any other social network growing and becoming big. If such an export is available and allowed (while satisfying the privacy concerns), this could enable competition in the social space. As a gatekeeper, Facebook has every intention not to allow any usage to the graph.
The idea about breaking up of social networks would not do any good. You would eventually have to solve multiple problems (and again and again) as the broken up entities either die or become dominant in a big enough niche. Even if you break up Instagram or Whatsapp from Facebook, they are still monopolies in their domains. Insta might not be able to survive since they used the Facebook's ad delivery intelligence, while Whatsapp would be a dominant monopoly in messaging nonetheless.
This is a landmark case if brought on, but needs to be dealt very smartly, if they want to actually solve problems and set the right precedents.
If the mandate is to do what is best for customers, then the best solution I can think of is to let FB function as one entity but toughen the norms on data collection. The other thing is Facebook should not inhibit any other social network trying to grow using FB's graph. A good example is how Instagram grew with the import of Twitter social graph, and when it came to Facebook, it grew further because it could import the connections that Facebook already had access to. In the name of privacy, it is a good idea to block that, but that essentially inhibits any other social network growing and becoming big. If such an export is available and allowed (while satisfying the privacy concerns), this could enable competition in the social space. As a gatekeeper, Facebook has every intention not to allow any usage to the graph.
The idea about breaking up of social networks would not do any good. You would eventually have to solve multiple problems (and again and again) as the broken up entities either die or become dominant in a big enough niche. Even if you break up Instagram or Whatsapp from Facebook, they are still monopolies in their domains. Insta might not be able to survive since they used the Facebook's ad delivery intelligence, while Whatsapp would be a dominant monopoly in messaging nonetheless.
This is a landmark case if brought on, but needs to be dealt very smartly, if they want to actually solve problems and set the right precedents.
Laws need to be updated to account for the network effects of the data lock position, where you, your data, and network are prevented from easily being mobile.
Your digital data should be considered to be equivalent to you having built a house, a big asset, but now you have a big choice to make: abandon it because the state is doing some sketchy things that you don't agree with or want to support by the taxes collected, or not.
The lack of data portability, mobility of users, is the only reason Facebook and its leadership could repeatedly be a bad actor and continue to scale as it did; by data portability I also mean that all data should also maintain cross-linking attribution, so if anyone in your network also leaves Facebook to join platform X instead - that data can be imported and aligned, synchronized properly on the other platform so it doesn't get broken. None of the incumbents are going to voluntarily to implement this.
Your digital data should be considered to be equivalent to you having built a house, a big asset, but now you have a big choice to make: abandon it because the state is doing some sketchy things that you don't agree with or want to support by the taxes collected, or not.
The lack of data portability, mobility of users, is the only reason Facebook and its leadership could repeatedly be a bad actor and continue to scale as it did; by data portability I also mean that all data should also maintain cross-linking attribution, so if anyone in your network also leaves Facebook to join platform X instead - that data can be imported and aligned, synchronized properly on the other platform so it doesn't get broken. None of the incumbents are going to voluntarily to implement this.
Have you ever thought that the reason Facebook is successful is because people choose to use it? No one is forced to use social media.
> Have you ever thought that the reason Facebook is successful is because people choose to use it?
Yes, I have thought that, before I knew any better. Now I know that Facebook became successful by making people think that other people wanted them to use Facebook.
E.g. http://www.krist0ph3r.com/2009/06/reminder-kristopher-invite...
Yes, I have thought that, before I knew any better. Now I know that Facebook became successful by making people think that other people wanted them to use Facebook.
E.g. http://www.krist0ph3r.com/2009/06/reminder-kristopher-invite...
And that’s basically advertising 101. I remember being taught that in a marketing class in graduate school back in 2001.
https://smallbusiness.chron.com/examples-bandwagon-advertisi...
https://smallbusiness.chron.com/examples-bandwagon-advertisi...
No, advertising 101 is vague lies like "America's favorite mascara". The more specific lie that "Kristopher invited you to use Facebook" takes it to a new level.
So let’s go with Mary Kay and Tupperware....
The equivalent is if a Tupperware salesperson tried to sell you tupperware by showing you a _doctored_ image of your friend buying tuperware while literally holding a sign saying "Hey [Your Name], buy this too!".
AFAIK invitations to Mary Kay and Tupperware parties are not lies. Your friend actually does want you to go.
I remember way back in the day my parents were invited to a “dinner party”. It wasn’t until they got their that they found out that it was a pitch to some MLM scheme like Mary Kay.
If your parents got to the "dinner party" and found that their friends hadn't actually invited them, but that the invitation was sent by the Mary Kay company without your parents' friends' knowledge, then I retract my claim. But I suspect it was your parents' friends being misleading on a small scale rather than a company lying on a large scale.
The entire idea behind MLzm schemes is to con your “friends” to get them to sell your goods.
Yup.. It's how trust is built, familiarizing you with a person or a thing - like a brand - by seeing or hearing about it enough times, automatically builds trust with it - digital advertising which organizations have taken advantage of this mechanism to shallowly in a very shallow, cheap way, manipulate people - tied into network effects that the internet as a platform allows to be scaled.
The article you linked to reminds me that Mark Zuckerberg's moral compass consists of:
Zuck: Yeah so if you ever need info about anyone at Harvard Zuck: Just ask Zuck: I have over 4,000 emails, pictures, addresses, SNS [Redacted Friend's Name]: What? How'd you manage that one? Zuck: People just submitted it. Zuck: I don't know why. Zuck: They "trust me" Zuck: Dumb fucks
It's particularly odd to me that he's quoted 'trust me' as if the concept of trust is foreign, non-existent,
The article you linked to reminds me that Mark Zuckerberg's moral compass consists of:
Zuck: Yeah so if you ever need info about anyone at Harvard Zuck: Just ask Zuck: I have over 4,000 emails, pictures, addresses, SNS [Redacted Friend's Name]: What? How'd you manage that one? Zuck: People just submitted it. Zuck: I don't know why. Zuck: They "trust me" Zuck: Dumb fucks
It's particularly odd to me that he's quoted 'trust me' as if the concept of trust is foreign, non-existent,
Lol. Go and read Hooked book. The shitty things Silicon Valley does to keep users addicted to their social media apps would blow your mind. Facebook is a net negative to the society. The reason people are using their products are because they are addicted. Not because it's making their life bettter. It's like drugs. Atleast the drug companies have ethics to not give you some unless you continue paying money. Fucking Facebook want users scrolling their shitty feeds and clicking on notifications all day so that Zuckerberg and VCs can buy more yatchs.
And that could describe, alcohol, weed, sweets, gambling....
Yes, that why those things are either illegal or heavily regulated.
And games (video and irl), food, movies, books, podcasts, amusement parks.
You're essentially arguing for the regulation of anything that gives humans a dopamine hit. If social media is bad for changing their product so that people use it more then so is Doritos for doing the same so people eat more.
You're essentially arguing for the regulation of anything that gives humans a dopamine hit. If social media is bad for changing their product so that people use it more then so is Doritos for doing the same so people eat more.
Sweets are heavily regulated?
It's heavily regulated by parents.
So now we need the government to treat us all like children who are incapable of making our own rational decisions?
People are sometimes capable of making rational decisions, but there's a whole industry (advertising, maybe you've heard of it) dedicated to working against that.
Think of really any common sense regulation:
- Can't use leaded gasoline
- Can't use asbestos
- Must wear a seat belt
- Cannot drive while intoxicated
If people always behaved well, we wouldn't need laws. They don't, so we do.
Think of really any common sense regulation:
- Can't use leaded gasoline
- Can't use asbestos
- Must wear a seat belt
- Cannot drive while intoxicated
If people always behaved well, we wouldn't need laws. They don't, so we do.
All of those cases cause external harm to other people. Logging into FB and posting memes doesn’t.
I’ve known people who have been harmed by logging into FB. Sometimes it’s the memes, comments, DMs, and disinformation that causes harm. Sometimes it’s Facebook running a social experiment without consent to see if they can alter users’ moods.
How can you say this seriously? Disinformation on FB had a huge impact on the 2016 election in the US.
Yes. A government taking care of the citizens like parents do would be the best case scenario.
please tell me you are being sarcastic.
Alcohol, gambling and the like are heavily regulated.
Yes and because it’s heavily regulated in the case of alcohol and because the government is so effective, it’s impossible for people under 21 to get alcohol.
>Antitrust laws were always based on supply side monopolies
I don't think this is true. The idea that antitrust is only about supply and consumer benefit is extremely limited view. It came in flavor in the US late-1970's and it's known as "Chicago School of Antitrust Law". The defining book of that school is Robert Bork's 'The Antitrust Paradox' (1978).
I don't think this is true. The idea that antitrust is only about supply and consumer benefit is extremely limited view. It came in flavor in the US late-1970's and it's known as "Chicago School of Antitrust Law". The defining book of that school is Robert Bork's 'The Antitrust Paradox' (1978).
I wonder were there any historical precidents of antitrust actions taken specifically when there wasn't control over suppply either horizontally or vertically resulting in the end of the chain being unable to compete.
Not taking this as evidence of "it never existed" but genuinely wondering if there was ever an obscure bit of precedence by "pure quality".
Microsoft's privileging of Internet explorer and its were a closer example of just anti-competitive but they also had the overwhelming computer market share sold.
I don't recall of any cases where so much as a patent was revoked just because it lead to far more market dominance than expected from the limited time. Even when it utterly devestated entire industries like what cloth mills did to the literal cottage industry weavers.
Not taking this as evidence of "it never existed" but genuinely wondering if there was ever an obscure bit of precedence by "pure quality".
Microsoft's privileging of Internet explorer and its were a closer example of just anti-competitive but they also had the overwhelming computer market share sold.
I don't recall of any cases where so much as a patent was revoked just because it lead to far more market dominance than expected from the limited time. Even when it utterly devestated entire industries like what cloth mills did to the literal cottage industry weavers.
I don't think where this is coming from, but you seem to imply that there is case now with FB.
I meant in more of a generic sense (as to where they were usually applied) than the specific definition of the law. Will definitely read the book if I can find it somewhere. Not based out of US, so might be difficult to find.
> If the mandate is to do what is best for customers, then the best solution I can think of is to let FB function as one entity but toughen the norms on data collection.
The data collection problem is basically independent of the antitrust problem. The only real overlap is that you can't avoid the data collection when the service is a monopoly you can't avoid doing business with, but the general solution -- more competition -- solves that anyway.
What's really needed is this:
> The other thing is Facebook should not inhibit any other social network trying to grow using FB's graph.
Adversarial interoperability shares the network effect. It lets competitors bootstrap off the incumbent instead of starting from scratch, so then you get more competitors.
The data collection problem is basically independent of the antitrust problem. The only real overlap is that you can't avoid the data collection when the service is a monopoly you can't avoid doing business with, but the general solution -- more competition -- solves that anyway.
What's really needed is this:
> The other thing is Facebook should not inhibit any other social network trying to grow using FB's graph.
Adversarial interoperability shares the network effect. It lets competitors bootstrap off the incumbent instead of starting from scratch, so then you get more competitors.
Data collection becomes an anti trust issue because as you mentioned, you cant really opt out of the data collection part while continuing to use the service. Even a small social network is sort of a monopoly if all of your friends and family is on that network. That way, even the competitors wont solve the data collection part. I am assuming unless the rules are in place, every one would just keep collecting maximum data.
Adversarial interoperability also means there is incentive for both the incumbent and competitor to keep innovating to keep the audience there (and be mindful of newer ones emerging) and hence the best for the customer.
Adversarial interoperability also means there is incentive for both the incumbent and competitor to keep innovating to keep the audience there (and be mindful of newer ones emerging) and hence the best for the customer.
> Data collection becomes an anti trust issue because as you mentioned, you cant really opt out of the data collection part while continuing to use the service.
The point is that data collection is just problem #8345732473 on the great scroll of reasons why monopolies are bad. It doesn't cause the monopoly and it isn't a significant problem if you make the monopoly go away.
The point is that data collection is just problem #8345732473 on the great scroll of reasons why monopolies are bad. It doesn't cause the monopoly and it isn't a significant problem if you make the monopoly go away.
Nov 3 will decide a lot of stuff.
I would guess if Trump returns and the Dems take the House and the Senate, expect all nuance and smartness to go out the window.
I would guess if Trump returns and the Dems take the House and the Senate, expect all nuance and smartness to go out the window.
Facebook obviously posses some interesting questions on various topics but framing the debate as Facebook collecting "monopoly rents" is ridiculous.
I haven't used Facebook since 2010 and I have never used Instagram.
If someone in my social network wants to send me some information they have my number and they can txt me. If someone wants to send me a picture they can do the same.
I don't use Facebook because ultimately for me it is completely redundant.
To call Facebook a monopoly is an analogy at best. You are not going to solve these problems through analogy though, these are uniquely new problems.
I haven't used Facebook since 2010 and I have never used Instagram.
If someone in my social network wants to send me some information they have my number and they can txt me. If someone wants to send me a picture they can do the same.
I don't use Facebook because ultimately for me it is completely redundant.
To call Facebook a monopoly is an analogy at best. You are not going to solve these problems through analogy though, these are uniquely new problems.
You are not the customer. Advertisers are.
Google and Facebook are the only games in town for online advertising these days; the fact both are making incredible amounts of money means either competitors aren't good enough, or are being priced out of the market, or squeezed out of it (due to network effects or anti-competitively).
For Google - the vast majority of whose income comes from search ads - there is no network effect. They are mostly much better (I try Bing every now and then, it's not even close; I set up ddg as my main search, but have to reach for google for about 1/3 of searches). However, they also employ tactics one could consider anticompetitive, e.g. paying Apple billions/year to be the default search engine on iPhones. YouTube does have a network-effect lock in, but AFAIK that's not really a revenue source for google. It does complete the advertising offering and keep newcomers out, though.
For Facebook - they are hardly doing anything better than competitors; it's all about the network effect. And they've been VERY busy making sure that every network which is big enough (or even growing quickly enough) to have its own network effect is either theirs (instagram, whatsapp) or sidelined (snapchat).
IIRC They paid $60M for Onavo - providing discounted bandwidth "safely encrypted" from the prying eyes of user's ISP but totally visible to Facebook, which gave them a real-time sample of application and website use -- which gave them the insight needed to purchase rising stars Instagram and reigning king WhatsApp (and attack Snapchat after they refused a buyout offer).
You are not Facebook's customer. You are a user, Facebook's product, sold to Facebook's customers, the advertisers.
Facebook and Google have a duopoly on online advertising (which, especially now with lockdown, but even independently, is nowadays much of advertising). There are unique new problems with these new models, but Facebook is definitely one part of a duopoly, and likely a monopoly by any existing legal definition.
Google and Facebook are the only games in town for online advertising these days; the fact both are making incredible amounts of money means either competitors aren't good enough, or are being priced out of the market, or squeezed out of it (due to network effects or anti-competitively).
For Google - the vast majority of whose income comes from search ads - there is no network effect. They are mostly much better (I try Bing every now and then, it's not even close; I set up ddg as my main search, but have to reach for google for about 1/3 of searches). However, they also employ tactics one could consider anticompetitive, e.g. paying Apple billions/year to be the default search engine on iPhones. YouTube does have a network-effect lock in, but AFAIK that's not really a revenue source for google. It does complete the advertising offering and keep newcomers out, though.
For Facebook - they are hardly doing anything better than competitors; it's all about the network effect. And they've been VERY busy making sure that every network which is big enough (or even growing quickly enough) to have its own network effect is either theirs (instagram, whatsapp) or sidelined (snapchat).
IIRC They paid $60M for Onavo - providing discounted bandwidth "safely encrypted" from the prying eyes of user's ISP but totally visible to Facebook, which gave them a real-time sample of application and website use -- which gave them the insight needed to purchase rising stars Instagram and reigning king WhatsApp (and attack Snapchat after they refused a buyout offer).
You are not Facebook's customer. You are a user, Facebook's product, sold to Facebook's customers, the advertisers.
Facebook and Google have a duopoly on online advertising (which, especially now with lockdown, but even independently, is nowadays much of advertising). There are unique new problems with these new models, but Facebook is definitely one part of a duopoly, and likely a monopoly by any existing legal definition.
> YouTube does have a network-effect lock in, but AFAIK that's not really a revenue source for google.
Just to clarify, YouTube revenue in 2019 was around $15 billion, which even for Google is not a small number.
Just to clarify, YouTube revenue in 2019 was around $15 billion, which even for Google is not a small number.
Thanks for the correction. I meant “profit”, and wasn’t even aware that YouTube revenue was disclosed this year for the first time (profit wasn’t... and YouTube likely costs a lot more to run per $ earned than the search, but how you assign profits and costs is art rather than science).
The only practice listed in the paper that could be construed as anti-competitive is acquiring other “social networks.” However, it’s a stretch to consider every website that a user can use a competitor to Facebook. It’s not like Facebook acquired a MySpace or anything.
But why are acquisitions anti-competitive? Nothing forces the competitor to sell. Acquisitions prove people can compete.
It’s a contradiction to say the network effect protects Facebook but at the same time say they had to buy Instagram because they were successfully competing despite the network effect. Facebook’s network effect didn’t stop Instagram, Snapchat, WhatsApp, etc.
But why are acquisitions anti-competitive? Nothing forces the competitor to sell. Acquisitions prove people can compete.
It’s a contradiction to say the network effect protects Facebook but at the same time say they had to buy Instagram because they were successfully competing despite the network effect. Facebook’s network effect didn’t stop Instagram, Snapchat, WhatsApp, etc.
>But why are acquisitions anti-competitive?
Because now there's less competition.
Because now there's less competition.
Instagram didn't have to sell. Less competition isn't the same thing as preventing competition.
For example, imagine three restaurants competing. Two of them make an agreement with a common supplier to shut out the third competitor. That is what I think of as anti-competitive.
For example, imagine three restaurants competing. Two of them make an agreement with a common supplier to shut out the third competitor. That is what I think of as anti-competitive.
Antitrust legislation is not designed to protect other companies, it's designed to protect consumers.
In the United States, when the Justice Department blocks a merger, it is not simply deciding to disallow the merger. It does not have the power to do so. Instead, the actual mechanism is via antitrust lawsuit.
If the merger is likely to reduce competition to such an extent that it would harm consumers, and if the Justice Department is so inclined, the Department files an antitrust lawsuit to block it.
In the United States, when the Justice Department blocks a merger, it is not simply deciding to disallow the merger. It does not have the power to do so. Instead, the actual mechanism is via antitrust lawsuit.
If the merger is likely to reduce competition to such an extent that it would harm consumers, and if the Justice Department is so inclined, the Department files an antitrust lawsuit to block it.
I don't think the legal code for preventing acquisitions says anything about consumers.
15 USC §18 says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
Nevermind that, let's say it is about protecting consumers. How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. IIRC Facebook reduced the price of WhatsApp by removing the dollar fee.
15 USC §18 says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
Nevermind that, let's say it is about protecting consumers. How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. IIRC Facebook reduced the price of WhatsApp by removing the dollar fee.
> How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products.
Consumers have been fairly directly harmed, actually. Facebook operates a walled garden, without interoperability. You can post from Facebook to Instagram, or Instagram to Facebook, but not Instagram to Snapchat.
It would be nice if social networks were more open, in the spirit of the web. But they're not, and by they're nature, network effects are everything. No one wants to be on a social network that none of their friends use.
Meanwhile, Facebook has been among the most aggressive data collectors, collecting all manner of data on users, and then selling and monetizing that data.
Beyond that, Facebook also controls an extremely large amount of speech in the world, including political speech. All of this is directly harmful to consumers.
If there were several large social networks, both of these might be mitigated, or resolved.
Consumers have been fairly directly harmed, actually. Facebook operates a walled garden, without interoperability. You can post from Facebook to Instagram, or Instagram to Facebook, but not Instagram to Snapchat.
It would be nice if social networks were more open, in the spirit of the web. But they're not, and by they're nature, network effects are everything. No one wants to be on a social network that none of their friends use.
Meanwhile, Facebook has been among the most aggressive data collectors, collecting all manner of data on users, and then selling and monetizing that data.
Beyond that, Facebook also controls an extremely large amount of speech in the world, including political speech. All of this is directly harmful to consumers.
If there were several large social networks, both of these might be mitigated, or resolved.
Are you asking "why is a monopoly bad?" or "why do acquisitions representing large market share promote monopoly?"
The 2nd one is quite obvious. Afterwards, there is less competition and the aquire has increased their market share, buying power, control of a supply chain, platform, infrastructure or some other market dominance position.
The 1st one... Do you prefer a theoretical reason? Empirical examples? rhetorical, political, philosophical? There are lots of reasons why monopolies are harmful.
The legislation itself, and the reasoning behind it was liberal-economics... ie "capitalism." Capitalism, from a pro-captialist perspective, works because of a superior price system. Monopolies break price systems, whether they are public or private monopolies.
There are a lot of other reasons too.
Since this is about digital monopolies and "platform" is a primary form of market dominance.... Compare to WWW-vs-AOL. One was a closed, private, system where a single companies dominates a primary bottleneck. One was open. Do you think the WWW would have achieved what the WWW achieved if they had won that platform war?
The 2nd one is quite obvious. Afterwards, there is less competition and the aquire has increased their market share, buying power, control of a supply chain, platform, infrastructure or some other market dominance position.
The 1st one... Do you prefer a theoretical reason? Empirical examples? rhetorical, political, philosophical? There are lots of reasons why monopolies are harmful.
The legislation itself, and the reasoning behind it was liberal-economics... ie "capitalism." Capitalism, from a pro-captialist perspective, works because of a superior price system. Monopolies break price systems, whether they are public or private monopolies.
There are a lot of other reasons too.
Since this is about digital monopolies and "platform" is a primary form of market dominance.... Compare to WWW-vs-AOL. One was a closed, private, system where a single companies dominates a primary bottleneck. One was open. Do you think the WWW would have achieved what the WWW achieved if they had won that platform war?
There’s over a hundred and twenty years of antitrust enforcement in this country. Why does HN insist on reinventing antitrust law from their own intuition about what “anti-competitive” means?
There’s over a hundred and twenty year of antitrust law that says that conduct is improper if it leads to higher prices for consumers. Why does Yale insist that antitrust can apply when prices are 0?
Why does Yale insist that antitrust can apply when prices are 0?
"Consumers" on Facebook are ad buyers, not users. Prices aren't 0 - Facebook's revenue was $70bn in 2019. That comes from businesses buy ads. Everything Facebook does to dominate the social media space is about selling more ads for more money. That's why they buy competitors, shut down rivals, and aggressively do what they can to drive prices for the ads on their platforms up.
"Consumers" on Facebook are ad buyers, not users. Prices aren't 0 - Facebook's revenue was $70bn in 2019. That comes from businesses buy ads. Everything Facebook does to dominate the social media space is about selling more ads for more money. That's why they buy competitors, shut down rivals, and aggressively do what they can to drive prices for the ads on their platforms up.
If we’re focusing on ad buyers instead of users, then why isn’t the relevant market just all “advertising companies” (instead of social media companies)? When you compare Facebook to other advertising companies, their market share dwindles. Google holds the advertising throne.
Google's 2019 revenue was $162bn. They're only twice as big as FB by that metric, and they have far less than twice the market share.
That philosophy emerged only 50 years ago in the 70s with the Chicago School of Economics, led Robert Bork and other ideologues.
The real price to consumers isn't zero for Google or Facebook.
Both platforms charge other businesses to advertise, because of the limited options businesses have to advertise they can charge high prices.
Those advertising costs get passed on to consumers in the form of higher prices on products.
Both platforms charge other businesses to advertise, because of the limited options businesses have to advertise they can charge high prices.
Those advertising costs get passed on to consumers in the form of higher prices on products.
Price in this case is calculated by the amount of Ads you have to see, the effect on mental health because of Facebook's physiological experiments on its users, Facebook not obeying laws of smaller countries where it operates in, Facebook not paying taxes in other countries, owning Instagram - effectively the second largest competitor to Facebook is also owned by Facebook, too late to take anti discriminately actions for ads (if they were smaller and feared a boycott, they would take earlier precautions) etc.
We need to look beyond the "Price = 0" narrative when we're investigating things that in this new era are free.
We need to look beyond the "Price = 0" narrative when we're investigating things that in this new era are free.
Instagram is a Facebook competitor ? That's a sick joke; those two social networks have less in common than birds and mammals
A competitor is not defined by doing the same thing (for which you can always find a distinction), but by competing for the same customer resources.
Facebook used to only have text, and people linked to pictures on (mostly) Flickr. And then MZ realized 80% of Facebook posts Link to pictures on outside websites. That’s competition for ad placement; so FB added picture storage, albums, etc. same with Videos.
The customers, advertisers, previously had Flickr as an option. Now they don’t. That’s not a coincidence. And that’s not even illegal on FB’s part as long as they aren’t a monopoly - but now they are.
Facebook used to only have text, and people linked to pictures on (mostly) Flickr. And then MZ realized 80% of Facebook posts Link to pictures on outside websites. That’s competition for ad placement; so FB added picture storage, albums, etc. same with Videos.
The customers, advertisers, previously had Flickr as an option. Now they don’t. That’s not a coincidence. And that’s not even illegal on FB’s part as long as they aren’t a monopoly - but now they are.
The Yale paper wants it both ways. If any app with friends/follows is a competitor then there’s plenty of competitors and the acquisition didn’t substantially reduce competition. Yet if only products similar to Facebook are considered competitors then they’ve never acquired a competitor.
Facebook's consumers are businesses, and their price is not 0.
The acquisition didn’t reduce competition for advertisers because Instagram didn’t have ads before Facebook owned them.
Facebook didn’t have any adverts before it had them. Neither did google, or for that matter cable TV.
Unless you have inside knowledge about Instagram’s business plans, it is reasonable to assume they would have had ads sooner or later, as no other monetization scheme seems sustainable for this kind of “product”.
The nipping of competition in the bud does not make it any less anti competitive.
Unless you have inside knowledge about Instagram’s business plans, it is reasonable to assume they would have had ads sooner or later, as no other monetization scheme seems sustainable for this kind of “product”.
The nipping of competition in the bud does not make it any less anti competitive.
Cable TV has always had advertising. I really wish this myth would die.
I was under the impression that it didn't in the early days in the US. For sure, in several other countries, it started without ads, and some channels stayed ad-free whereas others did get ads and getting more of them (though, nothing quite as horrible as what the US has these days -- on a recent visit to New York, my kids tried to watch Cartoon Network on the Hotel Television, and it was probably 30% ads -- never seen anything remotely close to that in UK, Germany and other countries I visit)
One of the early nationally available cable tv channels was TBS. They always had ads. Besides the original purpose of cable was to transmit network TV in remote areas.
Snapchat refused to sell, and Facebook pushed 3 different Snapchat competitors at the same time as a result, none of which were a success on their own - but which did make a significant dent in Snapchats growth.
This is a “I’ll push you out of the market by taking a loss” behavior, similar to MS inclusion of IE in Windows.
Whether or not NS or SC was/is a good product is irrelevant. This is the behavior that antitrust legislation is supposed to stop. The law iirc does not require that prices increase directly; rather that customers be harmed (of which price increase is a possible expression)
The customers in this case are advertisers, and they are definitely harmed - there are now two online advertising venues, Google and Facebook, both making outsized profits because they are the only two games in town. (Which on its own is NOT illegal - but using dominant position to maintain it, as Facebook has done with e.g. Onavo, instagram, Snapchat) is anticompetetive.
This is a “I’ll push you out of the market by taking a loss” behavior, similar to MS inclusion of IE in Windows.
Whether or not NS or SC was/is a good product is irrelevant. This is the behavior that antitrust legislation is supposed to stop. The law iirc does not require that prices increase directly; rather that customers be harmed (of which price increase is a possible expression)
The customers in this case are advertisers, and they are definitely harmed - there are now two online advertising venues, Google and Facebook, both making outsized profits because they are the only two games in town. (Which on its own is NOT illegal - but using dominant position to maintain it, as Facebook has done with e.g. Onavo, instagram, Snapchat) is anticompetetive.
I don't consider FB releasing more products to be bad for consumers. And consumers are really the only thing I care about.
Microsoft’s release of IE was horrible for customers and likely set the web back 5-10 years. You might not have witnessed the damage that the “free” “competitive” IE 6 caused, but I assure you it was a lot of damage both directly to consumers and indirectly through the direct costs to developers.
They wouldn’t do it if it didn’t benefit them, and as a rent extracting monopolist, it’s always at the expense of the rest of society.
You might not see it if you don’t look while it’s happening. Ask someone who lived through the IE times.
They wouldn’t do it if it didn’t benefit them, and as a rent extracting monopolist, it’s always at the expense of the rest of society.
You might not see it if you don’t look while it’s happening. Ask someone who lived through the IE times.
Regardless, in the modern era, I don't see how any of the free products that FB has released have been bad for society, for the mere reason of them being free.
I hope more companies release free products. As many as possible.
Basically all internet products are free, in the modern era. This is not some crazy, extreme thing. Because it is what literally almost every internet products does.
I hope more companies release free products. As many as possible.
Basically all internet products are free, in the modern era. This is not some crazy, extreme thing. Because it is what literally almost every internet products does.
Nothing is free. Society at large, and possibly you, are paying in ways that are not well understood by most - with your concentration, mental well being[0]; as well as sucking the air out of innovation and lots of funding -- a lot of FB income is VC money channeled through startups' advertising budget.
If I understand your position correctly, you are fine with it. I'm not. We can agree to disagree.
[0] Facebook had an experiment where they showed only sad news to some people, only happy news to others, and tracked the resulting mood which was affected.
If I understand your position correctly, you are fine with it. I'm not. We can agree to disagree.
[0] Facebook had an experiment where they showed only sad news to some people, only happy news to others, and tracked the resulting mood which was affected.
Snapchat refused to sell, and Facebook pushed 3 different Snapchat competitors at the same time as a result, none of which were a success on their own - but which did make a significant dent in Snapchats growth.
So FB pushed an offering that consumers didn’t want and it wasn’t successful - all of this without government intervention.
So FB pushed an offering that consumers didn’t want and it wasn’t successful - all of this without government intervention.
It didn't have to be successful to harm Snapchat (which it arguably did), and that's exactly the problem: Facebook put out, at roughly the same time, 3 products competing with Snapchat and among themselves.
You can surely weasel out some explanation for this product strategy that does not include "suffocating Snapchat", but neither Facebook nor any other company that I'm aware of has done anything similar[0]. And the only reasonable reason Facebook will do that, and can afford to, is its monopoly -- the use of which to further itself is likely an antitrust violation.
[0] Apple regularly does multiple competing products - but they are all internal. Only the "winner" is put on the market.
You can surely weasel out some explanation for this product strategy that does not include "suffocating Snapchat", but neither Facebook nor any other company that I'm aware of has done anything similar[0]. And the only reasonable reason Facebook will do that, and can afford to, is its monopoly -- the use of which to further itself is likely an antitrust violation.
[0] Apple regularly does multiple competing products - but they are all internal. Only the "winner" is put on the market.
Facebook put out, at roughly the same time, 3 products competing with Snapchat and among themselves.
See Google chat/messages apps.
For that matter Microsoft runs Teams, Skype, and GroupMe.
See Google chat/messages apps.
For that matter Microsoft runs Teams, Skype, and GroupMe.
Google is also a monopolist, and so is Microsoft, and both of them are abusing their monopoly position in one market to try to get into others. Made my point for me.
But Facebook did 3 within 6 months after Snapchat refused a buyout offer. That's very different from Google (trying multiple over years to see what/if sticks) and Microsoft (trying multiple over years for different market segments and/or NSA requested purchase).
Yes, all 3 are monopolists, MS almost got broken down for abusing theirs. What are you trying to say?
But Facebook did 3 within 6 months after Snapchat refused a buyout offer. That's very different from Google (trying multiple over years to see what/if sticks) and Microsoft (trying multiple over years for different market segments and/or NSA requested purchase).
Yes, all 3 are monopolists, MS almost got broken down for abusing theirs. What are you trying to say?
So now a monopolists are everywhere? When is someone going to tell the FTC?
And in the example above. Both Google and Microsoft are “monopolies” but they each have viable competitors....
And in the example above. Both Google and Microsoft are “monopolies” but they each have viable competitors....
Google are already being investigated for antitrust violations in both the US and Europe at the very second. Amazon and Apple likely will be very soon, if headlines are to be believed. Microsoft was found to abuse its monopoly before.
Someone apparently told the FTC and the European authority.
Someone apparently told the FTC and the European authority.
Let’s see how far that gets. We see how little it did for Microsoft. Microsoft is still just as dominant in PC operating systems and Office software as it was in 2000 and is still one of the top 5 most valuable companies - as it was 20 years ago.
I don't disagree. Do note that Microsoft had essentially zero lobbying before they were convicted, and a huge army of lobbyists when the punishment was neutered; and Google had a lobbying army from very early in its life.
Are you claiming that this state of affairs is good for citizens at large? I disagree. I believe the function of a government is to make life better for its citizens at large, and that the enforcement wrt Microsoft failed that goal (and will likely fail that goal with Google).
Are you claiming that this state of affairs is good for citizens at large? I disagree. I believe the function of a government is to make life better for its citizens at large, and that the enforcement wrt Microsoft failed that goal (and will likely fail that goal with Google).
? but you are wrong. Buying your competitors is only possible because you offer them more than they agree they are worth. Why would you do that? because reducing competition will earn you more money through your anticompetitive actions.
Less competition isn't the same thing as preventing competition.
Buying a competitor so they can't compete with you is preventing competition. You might have a definition that says it's not, but that just means your definition is wrong. The FTC and United States Department of Justice Antitrust Division examine every significant merger to test whether or not it's anti-competitive. Every government has a department looking at mergers and acquisitions for this reason (https://www.ftc.gov/policy/international/competition-consume...).
Buying a competitor so they can't compete with you is preventing competition. You might have a definition that says it's not, but that just means your definition is wrong. The FTC and United States Department of Justice Antitrust Division examine every significant merger to test whether or not it's anti-competitive. Every government has a department looking at mergers and acquisitions for this reason (https://www.ftc.gov/policy/international/competition-consume...).
Some of anti trust historically has included too much higher of a barrier to effective entry which is how vertical monopolies are coherent as a concept. The issue isn't that owning a chain of iron mines, steel refineries, and factories using the steel stop anyone from running one or their own chains of those things but that to be a competitor a massive amount of capital is required. Effectively creating say an effective hundred million dollar moat to be competitive. In which case the investment might not even be worth the revenue earned as returns diminish as it is either duplicate the production of the leader to match economies of scale or lose by produce more expensive commodities.
I don't quite agree with it philosophically (vertical intergration done right boosts efficency for everyone and done wrong only hurts themselves making it ironically procompetitive for those who don't make the same mistakes) but I can see the logic behind it.
I don't quite agree with it philosophically (vertical intergration done right boosts efficency for everyone and done wrong only hurts themselves making it ironically procompetitive for those who don't make the same mistakes) but I can see the logic behind it.
Doesn't matter. It results in less competition. The government's goal is to promote competition.
I can think of a billion reasons why you're right in theory and wrong in practice.
the network effects aren't anti-competitive alone. the acquisitions alone aren't anti-competitive.
their combined effect has been for them to be in a monopoly position and prevent any competition.
their combined effect has been for them to be in a monopoly position and prevent any competition.
> It’s a contradiction to say the network effect protects Facebook but at the same time say they had to buy Instagram because they were successfully competing despite the network effect.
It's not a contradiction if you allow that protection may not be perfect.
It's not a contradiction if you allow that protection may not be perfect.
Then what's the evidence the network effect has protected them from competition?
This is dead on. Moreover, I find it a bit funny that the authors consider WhatsApp to be a social media platform, but not iMessage. Similarly, they consider YouTube to be a social media platform, but not Twitch (or any of the paid services like Netflix). If they were intellectually honest, Facebook's market share would be nowhere near what they claim.
I'm a heavy Apple user and have been for over a decade and still don't understand why iMessage exists? WhatsApp and iMessage aren't comparable.
What fraction of this week's WWDC was spent on iMessage?
No idea, I didn't watch it.
> It’s not like Facebook acquired a MySpace or anything.
I'd say Instagram and WhatsApp are pretty close.
I'd say Instagram and WhatsApp are pretty close.
The paper lists five different things as anticompetitive, why do you disagree with their assessment? Allowing Vine to use your API and then blocking it after Twitter acquired it seems anticompetitive.
Because none of the things besides acquisition is anti-competitive in the context of anti-trust law.
Facebook doesn’t owe competitors their data. It’s absurd to construe not actively helping competitors by giving them your data as “anti-competitive.”
Facebook doesn’t owe competitors their data. It’s absurd to construe not actively helping competitors by giving them your data as “anti-competitive.”
>Because none of the things besides acquisition is anti-competitive in the context of anti-trust law.
Have you read antitrust law? The Sherman Act is vague enough that anything that could be considered anticompetitive would violate the law. The "Rule of Reason."
> It’s absurd to construe not actively helping competitors by giving them your data as “anti-competitive.”
Publicly agreeing to an agreement allowing something and then changing the terms to control how competitive they can be is.
Have you read antitrust law? The Sherman Act is vague enough that anything that could be considered anticompetitive would violate the law. The "Rule of Reason."
> It’s absurd to construe not actively helping competitors by giving them your data as “anti-competitive.”
Publicly agreeing to an agreement allowing something and then changing the terms to control how competitive they can be is.
Can I call up your company and get a list of your customers to create a competing service?
How is that remotely similar?
A competitor wanted to get a list of FB users to create a competitor. How is it not similar?
> It’s a contradiction to say the network effect protects Facebook but at the same time say they had to buy Instagram because they were successfully competing despite the network effect. Facebook’s network effect didn’t stop Instagram, Snapchat, WhatsApp, etc.
It's not a contradiction, since network effects can be unstable over time (e.g. people get older and young people "enter the pipeline," sometimes with different preferences). By the time of the acquisitions, Friendster had disappeared and MySpace was in the throes. Facebook had the network effects at time t=0 and determined that Instagram and then WhatsApp would have the dominant network effects at t=1 and t=2, respectively. I somewhat agree that we shouldn't punish Facebook because they understood Instagram's and WhatsApp's value than Instagram or WhatsApp did, but network effects can be fickle if a company like Facebook doesn't try to co-opt/buy competitors.
It's not a contradiction, since network effects can be unstable over time (e.g. people get older and young people "enter the pipeline," sometimes with different preferences). By the time of the acquisitions, Friendster had disappeared and MySpace was in the throes. Facebook had the network effects at time t=0 and determined that Instagram and then WhatsApp would have the dominant network effects at t=1 and t=2, respectively. I somewhat agree that we shouldn't punish Facebook because they understood Instagram's and WhatsApp's value than Instagram or WhatsApp did, but network effects can be fickle if a company like Facebook doesn't try to co-opt/buy competitors.
I don’t follow how the existence of companies succeeding in the face of competitors with “network effects” supports the idea that network effects limit competition...
I agree network effects are part of the value of the product, but I don’t see how that limits competition. Users can have both a Facebook and a Twitter, or Facebook and MySpace, etc. Network effects don’t stop people from joining other networks.
I agree network effects are part of the value of the product, but I don’t see how that limits competition. Users can have both a Facebook and a Twitter, or Facebook and MySpace, etc. Network effects don’t stop people from joining other networks.
Because MySpace was a substitute good for Facebook and vice versa. If only a fraction of (certain strongly-connected) MySpace users
stop updating there and only use Facebook, MySpace's network effects collapse and thus competition decreases.
This is of course what happened. I joined Facebook when it was first opened for my school (long ago). I immediately loved the UI over the XSS dumpster fire that was MySpace, but I knew like two or three people there. I kind of forgot about it, but checked back a couple months later, and suddenly I knew a bunch of people on Facebook. My days of using MySpace at that point were basically over. The data indicates this was not merely an anecdote, but basically how MySpace died.
EDIT: Also, the way antitrust law is written, anything that has this kind of network effect will likely be a candidate for a monopoly. It's almost inevitable. The courts and legal establishment have over time added the criterion that antitrust should only be enforced when monopoly power harms consumer welfare (usually understood to mean higher prices), which is a much trickier proposition in the case of Facebook.
This is of course what happened. I joined Facebook when it was first opened for my school (long ago). I immediately loved the UI over the XSS dumpster fire that was MySpace, but I knew like two or three people there. I kind of forgot about it, but checked back a couple months later, and suddenly I knew a bunch of people on Facebook. My days of using MySpace at that point were basically over. The data indicates this was not merely an anecdote, but basically how MySpace died.
EDIT: Also, the way antitrust law is written, anything that has this kind of network effect will likely be a candidate for a monopoly. It's almost inevitable. The courts and legal establishment have over time added the criterion that antitrust should only be enforced when monopoly power harms consumer welfare (usually understood to mean higher prices), which is a much trickier proposition in the case of Facebook.
The actual paper is available for free download here: https://www.omidyar.com/sites/default/files/Roadmap%20for%20...
On a related note, see also this work about Amazon on the Yale Law Journal: https://www.yalelawjournal.org/note/amazons-antitrust-parado...
Meanwhile, Google is already dealing with an antitrust lawsuit from 48 US states: https://www.cbsnews.com/news/google-antitrust-probe-48-u-s-s...
Regardless of one's view on the merits of all these accusations of anti-competitive behavior, it's clear that the 'political winds,' as it were, are blowing quite a bit more in a direction that goes against these three companies. It wouldn't surprise me if all three end up fighting in courts for the better part of a decade if not longer.
On a related note, see also this work about Amazon on the Yale Law Journal: https://www.yalelawjournal.org/note/amazons-antitrust-parado...
Meanwhile, Google is already dealing with an antitrust lawsuit from 48 US states: https://www.cbsnews.com/news/google-antitrust-probe-48-u-s-s...
Regardless of one's view on the merits of all these accusations of anti-competitive behavior, it's clear that the 'political winds,' as it were, are blowing quite a bit more in a direction that goes against these three companies. It wouldn't surprise me if all three end up fighting in courts for the better part of a decade if not longer.
Facebook always reminds me of a modern version of Compulink CIX - which spent a lot of its time keeping the rest of the Internet out of its internal bulletin board back in the early days of Internet access.
Facebook posts not showing up on the search engines and hidden behind a sign up "pay with your privacy"-wall are very equivalent.
CIX forums still exist, but they are nowhere near as influential as they once were. Perhaps Facebook will go the same way.
Facebook posts not showing up on the search engines and hidden behind a sign up "pay with your privacy"-wall are very equivalent.
CIX forums still exist, but they are nowhere near as influential as they once were. Perhaps Facebook will go the same way.
> Facebook posts not showing up on the search engines
I'm conflicted about this one. Personally, I wish that Pinterest content would not show up in search engine results; I've yet to see one that was useful in any way to me. I could imagine that FB results would be similarly clogging up search results with little value.
I'm conflicted about this one. Personally, I wish that Pinterest content would not show up in search engine results; I've yet to see one that was useful in any way to me. I could imagine that FB results would be similarly clogging up search results with little value.
That's more on Search Engines to keep up with the changing times. They could introduce exclude Social Media toggle easily for FB.
“We can imagine a social network market that worked more like the current phone system: a user of one social network could post and reach friends who were members of different social networks through interoperability protocols.”
How about SMTP?
How about SMTP?
forcing interopariblity and one common social network protocol akin to railroad companies being forced to operate compatible networks would be one of the simplest and straight forward regulations to increase consumer choice and balance out market dominance.
Just for a laugh, have a read about train rail gauges.
You think in Australia a small country, this would be a simple problem.
https://en.wikipedia.org/wiki/Rail_gauge_in_Australia
Small compared to what? It's 80% the land mass of the USA, and the sixth largest country by land mass in the world.
I saw the Washington Post describe Victoria as a small state today (in its Covid-19 coverage of the outbreak there). I went and looked up its size to compare to US states - it's bigger than Minnesota and Utah and all but 11 US states. I doubt the WaPo would refer to Utah as a small state.
I think of us as a small country because whilst large in size. we only have 7 largish cities, and 25 million people packed into them. With Sydney and Melbourne having close to 10 million people between them.
This is why they called Victoria a small state:
https://i2.wp.com/australian-population.com/wp-content/uploa...
https://i2.wp.com/australian-population.com/wp-content/uploa...
Has Facebook, and Mark Zuckerberg in particular, ever really made a secret of being a ruthless anti-competitive asshole? I always thought that was his one redeeming trait - the fact that he was honest about it. True, he occasionally claimed in interviews to be about "bringing people together", but I always felt he went out of his way to make sure everyone listening knew he didn't mean it.
[deleted]
> by misleading users and buying potential rivals
As a Brit, I thought this was how Americans do business.
As a Brit, I thought this was how Americans do business.
Diaspora had the idea of decentralized social networks a while ago by having interoperability between social networks. It never really took off, but I think it would be a good way of limiting 1 social network from getting too powerful.
I assume you mean legislation requiring social networks to be interoperable.
This is a good idea and is common in other industries. The problem is that an interoperable social network effectively has an open API with no rate limit. It's tough to solve the technical side of that in a user-protecting way.
This is a good idea and is common in other industries. The problem is that an interoperable social network effectively has an open API with no rate limit. It's tough to solve the technical side of that in a user-protecting way.
Post from the same author on Google: https://insights.som.yale.edu/insights/the-antitrust-case-ag...
What about Twitter? Or Visa? Or anyone with network effects and audiences larger than 100 million users?
Any firm will attempt to achieve as close to a monopoly as regulators allow, as that’s how you maximize margins and thus value to shareholders.
Most capitalist dominance is built on anti competitive behaviour
jon_elbrook(1)
The question is how does this “monopoly” hurt consumers? It’s social media. I use FB, just like most of the rest of the world. But if it died tomorrow the world would go on.
Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?
Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?
The idea that antitrust law exists to improve "consumer welfare" is a modern one. Until the late 1970's, antitrust was about exercising democratic control over corporate power.
You mean like the democratically elected President wants to “shut down” Twitter?
"Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith."
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
Do you care to expand or just quote a rule without context? Government power is always amplified because it has coercive power. It’s not just about Trump, it’s about any government power.
I'm not trolling but the same way ALL monopolies hurt consumers and the fair market. It is not a hard thing to read on up monopolies across history. And it isn't just FB. We need to stop the M&A activity that is only good for the VCs and not the consumers. We need to start unrolling the ones that have already happened.
But the difference is that "ALL OTHER" monopolies are priced whereas facebook is a free product. Can it be called a monopoly if your product is free? Pretty sure, most lawyers won't have a hard time convincing a jury that it can't be.
Besides, if FB is a monopoly then so are Twitter, Google, Reddit, Quora, etc. Its an oligopoly of sorts with each player dominating a slightly differentiated product and all products are free of cost.
Besides, if FB is a monopoly then so are Twitter, Google, Reddit, Quora, etc. Its an oligopoly of sorts with each player dominating a slightly differentiated product and all products are free of cost.
FB's users are not it's customers. It is free for users, in the same way that food is free for cows in a diary. Indeed, the cows did not choose to live that life, but increasingly [not] having a facebook account is not an option.
FB's customers are the advertisers. And they pay very good money, or FB wouldn't have had the money pay for WhatsApp, Instagram and its tens of thousands of employees.
FB's customers are the advertisers. And they pay very good money, or FB wouldn't have had the money pay for WhatsApp, Instagram and its tens of thousands of employees.
>> but increasingly [not] having a facebook account is not an option.
but so is the case for google maps, gmail, linkedin, twitter, uber and a zillion other services. Facebook is just like any other web service at the end of the day.
>> FB's customers are the advertisers.
Even if that's true for arguments sake, I don't see how FB becomes a "monopoly" in that case. There are potentially large # of advertisers buying advertising space from potentially large # of website owners. How does FB have a monopoly on advertiser spending?
but so is the case for google maps, gmail, linkedin, twitter, uber and a zillion other services. Facebook is just like any other web service at the end of the day.
>> FB's customers are the advertisers.
Even if that's true for arguments sake, I don't see how FB becomes a "monopoly" in that case. There are potentially large # of advertisers buying advertising space from potentially large # of website owners. How does FB have a monopoly on advertiser spending?
> but so is the case for google maps, gmail, linkedin, twitter, uber and a zillion other services. Facebook is just like any other web service at the end of the day.
Google Maps, Twitter and a zillion other services give me service without requiring an account, so it definitely is an option (I don't have a twitter account; I do have an old gmail account but I use Saerch, Maps and Youtube logged out and have for ~20 years).
I can hail taxis -- in fact, I'm now staying in a country where Uber is a regulated taxi, and there's no advantage (cost or otherwise) to using an Uber.
Linkedin is trying to force an account on me, but they haven't reached saturation anywhere that it impairs me that I don't have one.
Facebook events, however, and WhatsApp/Messenger, have become in my experience (and most people's by all account) the sole distribution point of a lot of timely and important information e.g. about kids school activities. So it's not just "another website".
> There are potentially large # of advertisers buying advertising space from potentially large # of website owners. How does FB have a monopoly on advertiser spending?
FB and Google have a duopoly due to user reach. It's really as simple as that. It's not illegal to have a monopoly, mind you, and some monopolies are "natural" (e.g., Google's search has classic[0] network effect, yet everyone I know who switched off it came back due to quality issues). But once you do have a monopoly, some generally acceptable actions become illegal.
[0] The fact that Google's users give feedback to Google about the result quality (by virtue of notifying Google which link was actually selected) is a weak network effect - but it only makes the network value linear in the number of users, whereas FB has more of a metcalfe square-of-number-of-users value.
Google Maps, Twitter and a zillion other services give me service without requiring an account, so it definitely is an option (I don't have a twitter account; I do have an old gmail account but I use Saerch, Maps and Youtube logged out and have for ~20 years).
I can hail taxis -- in fact, I'm now staying in a country where Uber is a regulated taxi, and there's no advantage (cost or otherwise) to using an Uber.
Linkedin is trying to force an account on me, but they haven't reached saturation anywhere that it impairs me that I don't have one.
Facebook events, however, and WhatsApp/Messenger, have become in my experience (and most people's by all account) the sole distribution point of a lot of timely and important information e.g. about kids school activities. So it's not just "another website".
> There are potentially large # of advertisers buying advertising space from potentially large # of website owners. How does FB have a monopoly on advertiser spending?
FB and Google have a duopoly due to user reach. It's really as simple as that. It's not illegal to have a monopoly, mind you, and some monopolies are "natural" (e.g., Google's search has classic[0] network effect, yet everyone I know who switched off it came back due to quality issues). But once you do have a monopoly, some generally acceptable actions become illegal.
[0] The fact that Google's users give feedback to Google about the result quality (by virtue of notifying Google which link was actually selected) is a weak network effect - but it only makes the network value linear in the number of users, whereas FB has more of a metcalfe square-of-number-of-users value.
If M and A becomes harder, why would VCs invest?
There have only been two YC companies that have ever gone public. I doubt that YC invested in any of its companies to produce “lifestyle businesses”.
There have only been two YC companies that have ever gone public. I doubt that YC invested in any of its companies to produce “lifestyle businesses”.
If M&A became harder, more companies would go public; or stay private and distribute profits as dividends.
But the problem is not M&A on its own; the problem is that through M&A, big players are able to stifle competition. I'm sure it's possible to define a reasonable law (about company size, market size and kind) that would make it much harder for today's Google, Facebook, Microsoft and Amazon from acquiring potential would-be competitors, without making it harder for two $100M companies to merge, or one $100M company to buy a $20M one.
But the problem is not M&A on its own; the problem is that through M&A, big players are able to stifle competition. I'm sure it's possible to define a reasonable law (about company size, market size and kind) that would make it much harder for today's Google, Facebook, Microsoft and Amazon from acquiring potential would-be competitors, without making it harder for two $100M companies to merge, or one $100M company to buy a $20M one.
Apple buys a company at least every couple of weeks. Most companies that Apple buys would never be successful products as an IPO. They were never products that would have ipo’d
You conveniently ignored the "or would have stayed private" part.
So in what world would most of the money losing companies that Apple bought remained private and profitable?
Instagram had no business model when it was acquired.
Could any of the chip design companies remain private? What would have happened to the company that Apple bought that made Workflow - that is now the Shortcuts app - if Apple had just built it in house? Would that have been a better outcome for consumers or the company behind Workflow?
In the case of technology companies, do you also want the government to stop acquihires?
If the government stopped acquisitions, the bigger companies could still just poach all of the employees.
Instagram had no business model when it was acquired.
Could any of the chip design companies remain private? What would have happened to the company that Apple bought that made Workflow - that is now the Shortcuts app - if Apple had just built it in house? Would that have been a better outcome for consumers or the company behind Workflow?
In the case of technology companies, do you also want the government to stop acquihires?
If the government stopped acquisitions, the bigger companies could still just poach all of the employees.
> Instagram had no business model when it was acquired.
They would have created one, by doing the obvious thing. Selling ads.
I don't think they would need FB to figure out that they need to do that.
They would have created one, by doing the obvious thing. Selling ads.
I don't think they would need FB to figure out that they need to do that.
If they hadn’t run out of money first. Also advertisers don’t want to deal with every mom and pop website. If they did, you wouldn’t have the pervasiveness of as networks.
What are the chances that they could have grown organically? Do you really want the government to tell founders that they couldn’t accept Facebook’s $1 billion dollars? Would you want the government telling you who you couldn’t sell your property to?
What are the chances that they could have grown organically? Do you really want the government to tell founders that they couldn’t accept Facebook’s $1 billion dollars? Would you want the government telling you who you couldn’t sell your property to?
That’s already the case that the government limits these transactions, and for good reasons.
Democracies and free markets are good at many things, but staying free is not one of those things. If Google and Facebook decided to merge tomorrow, the government would stop them, for good reasons. If Verizon and AT&T decide to merge, similarly so.
I was only suggesting that these restriction apply more strictly; and indeed that would dramatically change the market - similar time how existing regulation change the market so there’s no googbook or veriso&t
Democracies and free markets are good at many things, but staying free is not one of those things. If Google and Facebook decided to merge tomorrow, the government would stop them, for good reasons. If Verizon and AT&T decide to merge, similarly so.
I was only suggesting that these restriction apply more strictly; and indeed that would dramatically change the market - similar time how existing regulation change the market so there’s no googbook or veriso&t
You mean like they stopped Sprint and T-Mobile?
Like they should have in my opinion, yes.
According to Wikipedia[0], """On August 4, 2014, Bloomberg reported that Sprint had abandoned its bid to acquire T-Mobile, considering the unlikelihood that such a deal would be approved by the U.S. government and its regulators""", that is, the government effectively banned it, but Sprint pulled out ahead of time saving everyone time and money.
They recently approved it -- a mistake in my opinion -- but again that just proves my point: This is already the rule. Your position appears to be that the government shouldn't have this power at all, mine is that it should be applied more strictly to enhance competition.
[0] https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_a...
According to Wikipedia[0], """On August 4, 2014, Bloomberg reported that Sprint had abandoned its bid to acquire T-Mobile, considering the unlikelihood that such a deal would be approved by the U.S. government and its regulators""", that is, the government effectively banned it, but Sprint pulled out ahead of time saving everyone time and money.
They recently approved it -- a mistake in my opinion -- but again that just proves my point: This is already the rule. Your position appears to be that the government shouldn't have this power at all, mine is that it should be applied more strictly to enhance competition.
[0] https://en.wikipedia.org/wiki/Merger_of_Sprint_Corporation_a...
Instagram is now worth something like 100 billion dollars.
If FB was offering them 1 billion, I am sure that there would have been many investors willing to out some money into it.
If FB was offering them 1 billion, I am sure that there would have been many investors willing to out some money into it.
Instagram is worth 100 billion because Facebook leveraged its advertising network and integrated it heavily with FB proper.
I've been thinking about that lately, since you're right that the way anti-trust law is currently interpreted there has to be a consumer harm. I think the solution is something like this: consumers use not just Faceboook, but other products and services as well, some of which are not invented yet. By buying up early stage companies that potentially harm Facebook's core business, or by leveraging its large network effects or vast amount of data that no one else has access to, Facebook is harming long-run consumer welfare by preventing or handicapping future innovative businesses and services.
So who would buy these companies if not some other company where the a acquisition would have “synergies”? Why would VCs invest in companies if they didn’t expect an acquisition? The chance of a company actually making it to a successful IPO is slim.
Doesn't that just demonstrate that the market is distortionary then? If they can't IPO and they can't be profitable on their own then they aren't creating real value and so the existence of Facebook and other companies that act as acquirers is value destroying rather than value creating.
Are you willing to say that YC isn’t creating anything value?
Both Android and iOS were the results of acquisitions of unprofitable VC funded companies. How many people who participate on HN are employed by a VC funded, unprofitable company? How many startup founders right here or desperately trying to get VC funding?
Every major feature of the iPhone is the result of an acquisition - multitouch, fingerprint sensors, Face ID, Siri, maps, chip design, Shortcuts, etc.
Both Android and iOS were the results of acquisitions of unprofitable VC funded companies. How many people who participate on HN are employed by a VC funded, unprofitable company? How many startup founders right here or desperately trying to get VC funding?
Every major feature of the iPhone is the result of an acquisition - multitouch, fingerprint sensors, Face ID, Siri, maps, chip design, Shortcuts, etc.
No, I'm not saying that at all. Obviously some acquisitions have been tremendously valuable. Many of those acquisitions could also have existed on their own. But the net effect of something can be negative even if individual things are positive.
My criticism was scoped only to the practice of big tech companies buying up competitors and unprofitable businesses. I think this is value destroying over the long term, though it obviously creates value for the people involved.
My criticism was scoped only to the practice of big tech companies buying up competitors and unprofitable businesses. I think this is value destroying over the long term, though it obviously creates value for the people involved.
See page 31 of the paper [1] discussed in the article, under the heading "Harm to Consumers."
[1] https://www.omidyar.com/sites/default/files/Roadmap%20for%20...
[1] https://www.omidyar.com/sites/default/files/Roadmap%20for%20...
Whatever. Why should companies help out their rivals? To this day, nobody is forced to use Facebook.
I am not against helping rivals, synergies, whatever. But to claim it is unfair not to help rivals seems silly.
Invariably, if somebody is successful, some people will emerge claiming it was all unfair gains.
Not that I liked Facebook's approach, especially in the early days they were harvesting address books. It's not really an uncommon practice, though. The key point is, again, that nobody is forced to use them.
It may be a bit more difficult to avoid their tracking on web sites, but then it is on those web sites not to use the Facebook scripts. And if you really care, you can install an AdBlocker.
I am not against helping rivals, synergies, whatever. But to claim it is unfair not to help rivals seems silly.
Invariably, if somebody is successful, some people will emerge claiming it was all unfair gains.
Not that I liked Facebook's approach, especially in the early days they were harvesting address books. It's not really an uncommon practice, though. The key point is, again, that nobody is forced to use them.
It may be a bit more difficult to avoid their tracking on web sites, but then it is on those web sites not to use the Facebook scripts. And if you really care, you can install an AdBlocker.
Here is an interview with Philippon that has some of the main points: https://promarket.org/2019/12/09/the-lack-of-competition-has...