Deleting Facebook is not enough: without antitrust, the company will be our lives' "operating system"

Facebook is the poster-child for the techlash, the worst offender in the monopolistic bunch, and recent books like Antisocial Media: How Facebook Disconnects Us and Undermines Democracy by Siva Vaidhyanathan (previously) and Ten Arguments for Deleting Your Social Media Accounts Right Now by Jaron Lanier present variations on the main critiques of Facebook with some prescriptions for what to do about it.

In his New York Review of Books review of the two titles, Jacob Weisberg identifies the core problem with Big Tech: "big," not "tech." 40 years of antitrust malpractice resulted in abusive arrangements with every industry, abetted by incredible degrees of market concentration. Tech's founders are no worse (and probably no better) than the execs in other companies that have grown to monopolize their sectors, though tech had the "first mover advantage" of coming into existence just as antitrust was being stuffed down the memory hole.

Wesiberg traces much of our woes to the Microsoft antitrust decision: when America decided that there was no antitrust action needed to check a company that had 95% of the operating system market, the whole industry got a wake-up call.

Weisberg argues that merely deleting Facebook and other consumer actions are insufficient to correct the system. To that, I'd add a caution against the simplistic prescription to abolish free services with pay-to-use services: in an increasingly unequal world, a system that makes participation in public life contingent upon ability to pay is not going to produce a more democratic world.

Regulation might make Facebook still more powerful. Network effects, which make a service like Facebook more valuable to users as it grows larger, incline social media companies toward monopoly. The costs of legal compliance for rules like the GDPR, which can be ruinous for smaller start-ups, tend to lock in the power of incumbents even more. Unlike smaller companies, Facebook also has the ability to engage in regulatory arbitrage by moving parts of its business to the cities, states, and countries willing to offer it the largest subsidies and the lightest regulatory touch; it recently shifted its base of operations away from Ireland, where it had gone to avoid taxes, so that 1.5 billion users in Africa, Asia, Australia, and Latin America wouldn’t be covered by the GDPR. Zuckerberg and Sandberg have both said they expect regulation and would welcome the right kind—presumably regulation compatible with more users, more engagement, and more data.

What Facebook surely would not welcome is more vigorous antitrust enforcement. Blocking Facebook’s acquisitions of Instagram and WhatsApp were the best chances for the FTC to prevent the behemoth from becoming an ungovernable superpower. Reversing those decisions through divestiture or at least preventing these platforms from sharing customer data would be the best way to contain Facebook’s influence. At a minimum, the company should not receive approval to acquire any other social networks in the future.

But current antitrust doctrine may not be up to the task of taking on Facebook or the other tech leviathans. The problem is not establishing that Facebook, with 77 percent of US mobile social networking traffic, has a monopoly. It’s that under the prevailing legal standard of “consumer harm,” plaintiffs need to show that a monopoly leads to higher prices, which isn’t an issue with free products. When the Clinton-era Justice Department sued Microsoft in 1998, it argued the case on the novel grounds that the software giant was abusing its Windows monopoly to stifle innovation in the market for Web browsers. There is evidence that Facebook too has tried to leverage its monopoly to preempt innovation by copying its more inventive competitors, as when Instagram cribbed “Stories” and other popular features from Snapchat.

The Autocracy App [Jacob Weisberg/NY Review of Books]

(via Naked Capitalism)