Breaking up Facebook? Einstein would not be happy
I have explained many times while I believe that forcing social networks to follow real interoperability standards is so much more important than “breaking them up”…
that imposing such interoperability may even make such break-ups unnecessary. During a recent online discussion of this position, other participants observed that:
- “I’m not sure why [creating some interoperability standard for social networks] makes the proposal to break up Facebook useless. These are orthogonal problems as far as I can tell.”
- “[Mandatory open standards are an indirect solution, whereas] Breaking up Facebook would address these issues directly by: reducing the concentration of capital so that they are less able to crush competitors; separate each component so that users cannot be tracked across each platform; and separate out the advertising component from the other services”.
In this post I explain (again) why I give priority to open standards, and then why, even ignoring that issue, the Warren proposal has serious limits.
Open Standards first. Period.
My first reply to the comments above remains what I have been teaching since (at least) 2005: never mind Facebook. Open digital standards for real interoperability and data portability must be mandatory, period.
The reason is exactly the same why, worldwide and without any law to enforce it, every government, media and internet troll uses the smallest possible number of alphabets to handle everything from business models to reality shows, religions and political theories:
it would be completely idiotic to do otherwise. It would make communication much more difficult, for no real reason at all.
The only reason why we are not doing the same with all digital communication standards (i.e. protocols and file formats), and will not do it until is mandated by laws is extremely simple: in evolutionary terms, unlike writing and “analog” alphabets, digital protocols and file formats are still so new that, as a species, we just have not realized their nature yet. It is only because of this that startups based on creating deliberately incompatible standards for digital communication are still called “innovation”.
OK, break up. Then what?
The problem above remains a showstopper, if society is to progress towards more effective communication. Breaking up today’s social networks would do nothing, in and by itself, to solve that problem. So yes, in this sense the two issues are indeed orthogonal. Let’s look at “break ups” now.
As proof that interoperability is not a big issue and is not more important than breaking up, I was pointed to the fact that even “Tim Wu thinks it’s time to break up Facebook”. Mr. Wu “thinks the case against Facebook is easy enough that it could be broken up without changing the consumer welfare standard”, and that “The easiest way to do it is to start by breaking off WhatsApp and Instagram so those are separate companies”.
Why? Because “Right now, because [WhatsApp and Instagram] are all owned by the same place, they’re never really allowed to get at the mothership and be a true replacement for Facebook.”
Fact is, if those companies only returned independent, we would just remain in the same idiotic cages we are in today: WhatsApp users unable to communicate directly with Facebook Messenger users. Replacing “WhatsApp” and “Facebook Messenger” with, say, “iPhone” and “Samsung”, would cause consumer revolts all over the place, but (see above) we haven’t grasped that equivalence yet. Ditto for the fact that selling communication is deeply different from selling burgers, or hotel rooms. It makes no sense to “break up” communication companies if interoperability is not mandatory. That remains the first, if not the only thing to regulate, regardless of everything else.
(side note: the fact that “everybody” loves something as rude and dumb as WhatsApp is another proof of digital cluelessness by today’s society)
Enough of bogus priorities and “verticals” that shouldn’t exist
Today, says Wu, “Facebook sits down with someone and says, “We could steal the functionality and bring it into the mothership, or you could sell to us at this distressed price.” There’s really nothing to stop Facebook from swallowing all of these verticals.”
I argue that this description stands, again, on wrong priorities, and on wrong definitions of both real innovation and really free markets.
The best way to prevent Facebook from “stealing functionality” is to make the functionalities that really matter impossible, or useless, to steal. That is to impose open protocols for real interoperability among current, and future, communication and social networking services.
For the record, I also believe that most of today’s “verticals” in these sectors of the economy serve no sensible purpose, and that they only exist to artificially increase market fragmentation, that is to extract more data, money or time out of people. But that is another issue: the real problem with that article is that it is more than 2000 words long, but terms like “interoperability” and “standard protocols” do not appear once in it. This alone makes it incomplete, to say the least.
Some independent critiques…
Here are some third party explanations of why, even if I were completely wrong, Warren’s proposal is… not a solution:
From: “Tech Startup Investors Are Wary of Warren’s Plan to Protect Them”, by M. Masnick:
- “acquisition by larger players can play a critical role in a well-functioning tech industry, in addition to generating returns for investors. Restrictions on those deals, he said, could be counterproductive. Companies like Google and Facebook often acquire venture-backed startups”
- please compare that with my comments on bogus verticals and wrong definitions of innovation
From “Where Warren’s Wrong”, by Stratechery:
- “Senator Warren’s proposal… would create massive new problems, have significant unintended consequences, and worst of all, not even address the issues she is concerned about (with one possible exception…)”
- “Warren’s proposal is wrong about tech’s history, the source of the tech giants' power, and the fundamental nature of technology itself”
- “a recipe for insane amounts of litigation – often vexatious litigation, just seeking to ding a company for being “unfair” in its choices”
- " I’m not sure I see how the specifically listed divestiture plans would… do much of anything…"
- " very little in the actual plan makes much sense. The platform utility idea will lead to massive, wasteful, stupid lawsuits."
.. and the two LIMITS of those critiques
Both Wu’s positions and the articles listed above have two serious, intertwined limits. The first is that any proposal to “break up Facebook” is, at the end of the day, Americans explaining how to they will fix, with american laws and mentality, problems that american businesses and (lack of) lawmaking created for the whole world. Einstein would NOT be happy:
The second limit is even more serious: all the proposals and articles linked here only talk of the “welfare” of businesses and consumers, not of citizens. But the main reason why I insist on interoperability is not the fact it is the first thing to provide to have really “free markets”. Is the fact that communication and free speech are human rights, and basic ingredients of democracy. Whatever we do to evolve from the Facebook stage should start from there, not from antitrust and consumers.