6 ms·

Facebook leak hints at its defense against a government-ordered breakup

76 points by Garbage 6y ago

donor20 6y ago
The press goes from calling out Facebook and zuckerberg as idiots for wildly overpaying for instragram to now saying that it was unfair they bought instagram. https://www.theatlantic.com/technology/archive/2012/04/following-instagram-its-time-accept-social-media-tech-bubble/329543/ https://www.theatlantic.com/technology/archive/2012/04/follo... Does anyone doubt facebook has pumped some pretty massive bucks into insta? I mean, insta had 13 employees or something?
- Barrin92 6y ago
  Instagram is less of an issue compared to whatsapp for the reasons you outlined, Facebook mostly took it to where it is, and it also has plenty of competition. TikTok, Twitter, Snap are all large. Whatsapp and Messenger have significant combined marketshare and it was already much more valuable when they bought it.
  - kace91 6y ago
    and it holds potentially less important data. I know many influencial people including first line politicians in my country that use whatsapp on the daily, while I really can't see any of them sharing confidential information on instagram of all places. And yes, using a service like that is an extremely bad decision in the first place, but that's where we are right now.
  - deleted 6y ago
    [deleted]
  - em500 6y ago
    Whatsapp was something like 50 employees and a 400m users when FB bought them in 2014. Plenty of people (though not not all) were baffled by the 19B price that they paid at the time (https://news.ycombinator.com/item?id=7266618 https://news.ycombinator.com/item?id=7266618 https://news.ycombinator.com/item?id=7275470 https://news.ycombinator.com/item?id=7275470, https://news.ycombinator.com/item?id=7272641 https://news.ycombinator.com/item?id=7272641), especially in the US where Whatsapp was/is relatively unpopular.
    - donor20 6y ago
      That's a great set of links. The hotmail comparison is apt - Microsoft basically trashed / dropped hotmail? So these acquisitions can go either way? The risk with what's up is definitely higher. That said, Facebook has an INCREDIBLE acquisition success rate with insta and whatsup.
      - Lammy 6y ago
        Facebook didn't make the WhatsApp acquisition blind. They had data from their Onavo VPN service showing exactly how popular it was compared to their own Messenger.
  - donor20 6y ago
    I can see that - I use neither and don't have the facebook app on my phone so for me it's irrelevant but I know internationally whatsup just crushes the local telcos.
- vixen99 6y ago
  'The Press' is a single entity?
  - seppin 6y ago
    It's not, anyone that uses that term or "Mainstream media" can instantly be dismissed.
  - deleted 6y ago
    [deleted]
  - hnracer 6y ago
    The hivemind behind the press is a single entity
- mtgx 6y ago
  Honestly, any acquisition by a dominant player in any given market that costs over $100 million should probably be reviewed for antitrust. We'd do much better preventing monopolies from forming instead of trying to break them up 15 years later, after 99% of the damage was already done, consumers and customers have already suffered for it, and now you also have to deal with the break-up aftermath. It would maintain a healthier market with many more smaller players. Plus, if these companies have billions and billions of dollars to throw away at buying smaller competitors, surely they have enough money to create their own competitor. Not to mention this would actually create a new competitor in various markets rather than take one away from said market, which is what happens through an acquisition. Also remember that large companies/monopolies also hurt the jobs market - the fewer players that dominate an economy, the riskier that economy is and you have to bail them out, and also it puts downwards pressure on salaries for workers, because people have fewer options when switching jobs. It's only conglomerates with which you have little margin to negotiate your salary, too.
- turtleturtle 6y ago
  It's just the price of making a successful bet. Critics were fine with it when they were confident it would fail. They just can't stand being wrong so they're making an effort to make it true.
- bigpumpkin 6y ago
  How does overpaying for an acquisition preclude Facebook from forming a monopoly? If anything, Facebook has more incentives to overpay because of the monopolistic powers it would have.
legulere 6y ago
The takeover was based on lies anyway: https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1369 https://ec.europa.eu/commission/presscorner/detail/en/IP_17_...
- docdeek 6y ago
  From the document you linked: "The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision."
quattrofan 6y ago
Need to go far further than just splitting it into three parts.
- qz2 6y ago
  Yes burying each of them too.
  - phito 6y ago
    Then put concrete all over it.
    - dontcarethrow2 6y ago
      Dont forget all the radioactive waste signs around the perimeter.
- etripe 6y ago
  What do you have in mind?
  - cwhiz 6y ago
    Facebook should be shattered into a dozen pieces that are then forced to compete in the social media market.
    - etripe 6y ago
      I'm not opposed to the idea, but I wonder how small the pieces can get before they're not practical to run as a company anymore. Obviously, things like Instagram, Messenger and WhatsApp could be competing with their counterparts. As I've never really used Facebook, I don't know what the core app does and how it could be split up. Do you have any insight there?
dzink 6y ago
Antitrust probe released at end of October? Sounds like government leverage against FB right before the election.
alexanmathis 6y ago
So the defense is that it is too integrated? I mean good on them if that works. Very scummy though.
ece 6y ago
I decided to look back at the AT&T split up and the case against Microsoft and found a news story and justice dept. write-ups: https://www.washingtonpost.com/archive/politics/1982/01/09/us-ends-antitrust-suits-against-at38/6545a672-b488-4915-9064-8baf4da21590/ https://www.washingtonpost.com/archive/politics/1982/01/09/u... https://www.justice.gov/atr/att-divestiture-was-it-necessary-was-it-success https://www.justice.gov/atr/att-divestiture-was-it-necessary... https://www.justice.gov/atr/us-v-microsoft-courts-findings-fact https://www.justice.gov/atr/us-v-microsoft-courts-findings-f... Near the Washington Post article's end: "Throughout the trial, AT&T lawyers had argued that this "dismemberment" would hurt the nation's telephone network by raising prices to consumers and resulting in a deterioration of the phone system the nation depends on for defense communications and other emergency situations..." The FTC case against Facebook seems promising to me, but it seems like the AT&T and Microsoft cases were settled before final judgments.
- ajsnigrutin 6y ago
  > Near the Washington Post article's end: "Throughout the trial, AT&T lawyers had argued that this "dismemberment" would hurt the nation's telephone network by raising prices to consumers and resulting in a deterioration of the phone system the nation depends on for defense communications and other emergency situations..." Excuse or not, this technically is true and it is possible things like this happen. ...but! Entry cost for telephony then (=building a whole new, alternative telephone network) is so expensive, that it's unrealistic to build one, except maybe in places with such population density, that the cost of new wiring is offset by the number of new customers in a small area. Compared to pulling new telephone cables for the whole country, making a new social network is very fast and cheap (apparently, takes 13(?) employees in case of instagram), and allows a slow-start (run the network on one $5 virtual machine, then get another, and another, then have issues with scaling and technical debt, but slowly fix stuff when money pours in), which means that even if facebook fails horribly after the breakup, 'someone new' will fill the gap.
  - ece 6y ago
    In AT&T's case, the second link ends with the DoJ saying the FCC should've regulated better. For Facebook, I think we wouldn't want just another giant Facebook2 to pop-up in it's place. It's important that the FTC (or Congress) stress real data portability, privacy regulations and even protocols/standards if needed to tie everything together in a post-Facebook social media. Though I have doubts about just how much of this will be accomplished.
thelazydogsback 6y ago
I worked at MS in the early 90's during the time when they wanted to break it up -- I'm convinced that if BillG simply accepted this and approached it in a constructive way, that separate systems and apps companies would have been fantastically good for both shareholders and the software that was produced by MS and others.

76 points by Garbage 6y ago

The press goes from calling out Facebook and zuckerberg as idiots for wildly overpaying for instragram to now saying that it was unfair they bought instagram. https://www.theatlantic.com/technology/archive/2012/04/following-instagram-its-time-accept-social-media-tech-bubble/329543/ https://www.theatlantic.com/technology/archive/2012/04/follo... Does anyone doubt facebook has pumped some pretty massive bucks into insta? I mean, insta had 13 employees or something?

Barrin92 6y ago
Instagram is less of an issue compared to whatsapp for the reasons you outlined, Facebook mostly took it to where it is, and it also has plenty of competition. TikTok, Twitter, Snap are all large. Whatsapp and Messenger have significant combined marketshare and it was already much more valuable when they bought it.
- kace91 6y ago
  and it holds potentially less important data. I know many influencial people including first line politicians in my country that use whatsapp on the daily, while I really can't see any of them sharing confidential information on instagram of all places. And yes, using a service like that is an extremely bad decision in the first place, but that's where we are right now.
- deleted 6y ago
  [deleted]
- em500 6y ago
  Whatsapp was something like 50 employees and a 400m users when FB bought them in 2014. Plenty of people (though not not all) were baffled by the 19B price that they paid at the time (https://news.ycombinator.com/item?id=7266618 https://news.ycombinator.com/item?id=7266618 https://news.ycombinator.com/item?id=7275470 https://news.ycombinator.com/item?id=7275470, https://news.ycombinator.com/item?id=7272641 https://news.ycombinator.com/item?id=7272641), especially in the US where Whatsapp was/is relatively unpopular.
  - donor20 6y ago
    That's a great set of links. The hotmail comparison is apt - Microsoft basically trashed / dropped hotmail? So these acquisitions can go either way? The risk with what's up is definitely higher. That said, Facebook has an INCREDIBLE acquisition success rate with insta and whatsup.
    - Lammy 6y ago
      Facebook didn't make the WhatsApp acquisition blind. They had data from their Onavo VPN service showing exactly how popular it was compared to their own Messenger.
- donor20 6y ago
  I can see that - I use neither and don't have the facebook app on my phone so for me it's irrelevant but I know internationally whatsup just crushes the local telcos.
vixen99 6y ago
'The Press' is a single entity?
- seppin 6y ago
  It's not, anyone that uses that term or "Mainstream media" can instantly be dismissed.
- deleted 6y ago
  [deleted]
- hnracer 6y ago
  The hivemind behind the press is a single entity
mtgx 6y ago
Honestly, any acquisition by a dominant player in any given market that costs over $100 million should probably be reviewed for antitrust. We'd do much better preventing monopolies from forming instead of trying to break them up 15 years later, after 99% of the damage was already done, consumers and customers have already suffered for it, and now you also have to deal with the break-up aftermath. It would maintain a healthier market with many more smaller players. Plus, if these companies have billions and billions of dollars to throw away at buying smaller competitors, surely they have enough money to create their own competitor. Not to mention this would actually create a new competitor in various markets rather than take one away from said market, which is what happens through an acquisition. Also remember that large companies/monopolies also hurt the jobs market - the fewer players that dominate an economy, the riskier that economy is and you have to bail them out, and also it puts downwards pressure on salaries for workers, because people have fewer options when switching jobs. It's only conglomerates with which you have little margin to negotiate your salary, too.
turtleturtle 6y ago
It's just the price of making a successful bet. Critics were fine with it when they were confident it would fail. They just can't stand being wrong so they're making an effort to make it true.
bigpumpkin 6y ago
How does overpaying for an acquisition preclude Facebook from forming a monopoly? If anything, Facebook has more incentives to overpay because of the monopolistic powers it would have.

legulere 6y ago

The takeover was based on lies anyway: https://ec.europa.eu/commission/presscorner/detail/en/IP_17_1369 https://ec.europa.eu/commission/presscorner/detail/en/IP_17_...

docdeek 6y ago
From the document you linked: "The Commission therefore considers that, albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision."

quattrofan 6y ago

Need to go far further than just splitting it into three parts.

qz2 6y ago
Yes burying each of them too.
- phito 6y ago
  Then put concrete all over it.
  - dontcarethrow2 6y ago
    Dont forget all the radioactive waste signs around the perimeter.
etripe 6y ago
What do you have in mind?
- cwhiz 6y ago
  Facebook should be shattered into a dozen pieces that are then forced to compete in the social media market.
  - etripe 6y ago
    I'm not opposed to the idea, but I wonder how small the pieces can get before they're not practical to run as a company anymore. Obviously, things like Instagram, Messenger and WhatsApp could be competing with their counterparts. As I've never really used Facebook, I don't know what the core app does and how it could be split up. Do you have any insight there?

dzink 6y ago

Antitrust probe released at end of October? Sounds like government leverage against FB right before the election.

alexanmathis 6y ago

So the defense is that it is too integrated? I mean good on them if that works. Very scummy though.

ece 6y ago

I decided to look back at the AT&T split up and the case against Microsoft and found a news story and justice dept. write-ups: https://www.washingtonpost.com/archive/politics/1982/01/09/us-ends-antitrust-suits-against-at38/6545a672-b488-4915-9064-8baf4da21590/ https://www.washingtonpost.com/archive/politics/1982/01/09/u... https://www.justice.gov/atr/att-divestiture-was-it-necessary-was-it-success https://www.justice.gov/atr/att-divestiture-was-it-necessary... https://www.justice.gov/atr/us-v-microsoft-courts-findings-fact https://www.justice.gov/atr/us-v-microsoft-courts-findings-f... Near the Washington Post article's end: "Throughout the trial, AT&T lawyers had argued that this "dismemberment" would hurt the nation's telephone network by raising prices to consumers and resulting in a deterioration of the phone system the nation depends on for defense communications and other emergency situations..." The FTC case against Facebook seems promising to me, but it seems like the AT&T and Microsoft cases were settled before final judgments.

ajsnigrutin 6y ago
> Near the Washington Post article's end: "Throughout the trial, AT&T lawyers had argued that this "dismemberment" would hurt the nation's telephone network by raising prices to consumers and resulting in a deterioration of the phone system the nation depends on for defense communications and other emergency situations..." Excuse or not, this technically is true and it is possible things like this happen. ...but! Entry cost for telephony then (=building a whole new, alternative telephone network) is so expensive, that it's unrealistic to build one, except maybe in places with such population density, that the cost of new wiring is offset by the number of new customers in a small area. Compared to pulling new telephone cables for the whole country, making a new social network is very fast and cheap (apparently, takes 13(?) employees in case of instagram), and allows a slow-start (run the network on one $5 virtual machine, then get another, and another, then have issues with scaling and technical debt, but slowly fix stuff when money pours in), which means that even if facebook fails horribly after the breakup, 'someone new' will fill the gap.
- ece 6y ago
  In AT&T's case, the second link ends with the DoJ saying the FCC should've regulated better. For Facebook, I think we wouldn't want just another giant Facebook2 to pop-up in it's place. It's important that the FTC (or Congress) stress real data portability, privacy regulations and even protocols/standards if needed to tie everything together in a post-Facebook social media. Though I have doubts about just how much of this will be accomplished.

thelazydogsback 6y ago

I worked at MS in the early 90's during the time when they wanted to break it up -- I'm convinced that if BillG simply accepted this and approached it in a constructive way, that separate systems and apps companies would have been fantastically good for both shareholders and the software that was produced by MS and others.