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It's Time To Break Up Facebook - On Tech and Reviving Antitrust


TwinIon
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Over at The Verge Tim Wu (best known for coining the phrase "net neutrality") makes the argument that antitrust law needs a new, more flexible standard and that we need to start applying it to our modern tech monopolies. The frustrating part of this to me is that Facebook is held up as the primary example. Not because it's a bad example, but because it's the only really easy one. Facebook swallowing WhatsApp and Instagram obviously had anticompetitive results, and splitting them up seems straightforward. An entrenched power used their status and wealth to prevent innovative newcomers from disrupting their industry. The disappearance of those competitors from the market can't help but have detrimental effects.

 

The other tech juggernauts are far less straightforward to split up, and proving how they've harmed the tech landscape is much more difficult. When people talk about Amazon being a monopoly, they might be right, but how to split them up is far less clear. Sure, you could spin off AWS, and while that was a major advantage in the beginning, I don't think you could make a great case that AWS is why Amazon is successful today or the source of their anticompetitive tendencies. There's probably good ground to prevent them from buying companies like Zappos, but by and large Amazon's advantage, and the ways the suppress markets, are complex and varied. More than that, much of their internal structure is built around Amazon.com (the retail site) being their first and best customer. Split up the logistics from the sales and you might not solve the monopoly issues while also needlessly punishing and preventing some of their actual innovation.

 

Google might even be more difficult since many of the things that they dominate in don't really bring in much money. Forcing them to split off Android or Chrome and I think it's unlikely those companies succeed without Google's financing and interconnectedness.  More likely than not you're simply ceding those markets to other giants that also don't need the money from those efforts (like Microsoft and Apple). Even if you don't care what happens to those markets, you haven't really addressed the core places where Google's money making monopoly might actually be problematic.

 

I'm not against the idea of breaking up a Facebook or a Google. I firmly believe in the power of competitive markets, and when the government can step in and take steps that are obviously helpful in that regard, I'm for it. This is a topic I'm seeing getting more and more traction, but very few actual proposals for how to make this work.

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My biggest concern about the tech companies going forward is their strangle hold on emerging domains for AI that cannot exist without the AI tec. See: Alexa and google home; self driving cars; and ultimately, home robotics.

 

All of these companies are taking a stab at owning that market along with the other tech they pioneered and I think that would be very bad. Fortunately, I think these new market are easier divides and not as complicated as some of the other one's you mentioned, which I agree, are harder to figure out how to split up.

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7 hours ago, SilentWorld said:

This is easy. Nationalize Facebook, Amazon, and Google. They'd all function better as public services than as private companies anyway. 

 

While I don't think these companies should be nationalized, I do think there is something to be said for the government offering some basic internet public services. In the same way the government has a US postal service, I think it would make sense to provide a public service for email servers and maybe other limited services like that just so everyone poor or not, is guaranteed essential tools to be a productive member of society. I might also include a basic cell phone and service.

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The Verge posted a follow up article that talks a little bit about how antitrust could be applied to some of these companies, and the results are not entirely exciting. 

 

In Google's case, it boils down to little more than "stop Google from buying more companies." Personally, I think that's a bit broad. I think it's good to see Google use it's power to innovate in areas outside their comfort zone. Google (and now Waymo) has been a leader in self driving tech, and much of that couldn't have happened without Google buying companies. I do think that limiting their ability to buy companies that have to do with advertising is probably a good idea, since that's where Google is a real threat.

 

For Amazon the idea proposed is essentially to carve Amazon up into pieces, but not separate them as companies so much as force them to be more customer agnostic. So, for example, make it so their storefront doesn't overly favor Amazon's own products. This is a sticky issue, but if done right I actually think this could be a good avenue to proceed. Amazon is largely built in such a way as to be specifically anticompetitive while at the same time operating as the defacto online marketplace. For many sellers that means that you effectively can't avoid using their platforms, but you're necessarily at a disadvantage and are at risk of having your business partly or entirely subsumed by Amazon. Putting rules in place to prevent that kind of thing from happening would be difficult, but likely worthwhile. 

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