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Tim Wu Explains Why He Thinks Facebook Should Be Broken Up (2019)

66 points by spzx 6y ago

matchbok 6y ago
FB is no different or better than big oil or big telco. Hopefully the people who work there begin to realize the damage they are doing to this country.
- TylerE 6y ago
  Strongly disagree that it's no differnet. Oil and telco doesn't have network effects. It doesn't matter if your friend fuels his car with Citgo or BP.
  - dredmorbius 6y ago
    Oil's network effects are largely on the production and distribution side. Rockefeller bought out refineries and negotiated railroad rebates ... on both his own and competitors' shipments (the latter paid to him, not the competitors). Telephony very much has network effects, which played a key role in how AT&T built its monopoly (early 20th century). As do other "network corporations": railroads, commodity trusts, wholesale and retail, banking, information services, higher education.
  - bopbeepboop 6y ago
    Telco has network effects, we just mandated interoperability to neutralize them. The same lessons would work on social media: I should be able to choose what site I view a post to FB from my network from the same way I can choose what operator provides my phone service.
- tjpnz 6y ago
  >Hopefully the people who work there begin to realize the damage they are doing to this country. They might not realise it now but I suspect they would should they leave. I for one would feel very uncomfortable working with someone who's ex-Facebook and I don't think I'm alone in that regard. FWIW the damage Facebook's caused goes far beyond the United States.
- Karsteski 6y ago
  Which country is this country?
jamestimmins 6y ago
If you haven't read his book The Master Switch, it's a fantastic read on the history of communication technology. https://www.amazon.com/Master-Switch-Rise-Information-Empires/dp/0307390993 https://www.amazon.com/Master-Switch-Rise-Information-Empire...
- websites2323 6y ago
  Even better is “The Attention Merchants.” Pair that with Zuboff’s “The Age of Surveillance Capitalism” and you’ll have a good foundation for how dangerous Facebook is. Something needs to be done. Monopoly is a means to an end here, but it might not get the job done. What need is a ban on behavioral advertising full stop.
mimikatz 6y ago
Facebook seems like the least of the big techs that are the most abusive of monopoly (outside of netflix). Google is by far the most abusive, Apple is the most locked down, Amazon is the most disruptive. Facebook is just for casual communication and isn't as business impacting.
- 0xB31B1B 6y ago
  Facebook is the most anti-competitive of them all IMO. "Monopolist" and "anti-competitive" are overlapping yet distinct legal concepts in antitrust law. Facebook had a well known "buy or bury" strategy where they would either buy their competitors or try to destroy them. What is interesting is that IMO FB has had antitrust pressure before google/apple/amazon and this basically froze FB's M&A teams for the past ~4 years. In this time we have seen 4 new promising independent social media networks arise (tiktok, dispo, clubhouse, substack). IMO without the antitrust pressure against FB the current state of social media would be more consolidated, less likely that these 4 new networks would be independent/growing quickly at this stage.
  - mimikatz 6y ago
    Amazon told diapers.com sell to us or we will sell diapers at below cost until you run out of money. Maybe I am just old and the "real" world seems much more legit than the social media world. Sure Facebook bought a lot of companies, but there isn't a ton they do to smoosh them together. They seem pretty independent. Facebook's ability to kill seems weak. TikTok is still doing well and Reels didn't eat into them. Clubhouse is new and up and coming. Much more competitors than new search engines (which isn't even what Google really is anymore). Apple does have more a variety and mix of competition as well as less market share than the other Tech giants.
    - bostonsre 6y ago
      What are facebook acquisitions where the acquired companies have remained independent? Whatsapp, Instagram, and oculus seem like they have been assimilated a good amount. re: tiktok and clubhouse I think the op made a good point about the Facebook m&a spree being put on hold due to their legal troubles a few years back and now can only try to clone/crush competitors now. They cloned tiktok and wouldn't be surprised to hear they have a clubhouse clone in the works.
dredmorbius 6y ago
In related news, Tim Wu has accepted an appointment to serve the Biden Administration on the National Economic Council. "White House signals coming antitrust push with Tim Wu appointment" Wu will be serving on the National Economic Council as special assistant to the president for technology and competition policy, the White House said this morning. Wu confirmed the news in a tweet. https://arstechnica.com/tech-policy/2021/03/tech-critic-tim-wu-joins-biden-admin-as-tech-competition-advisor/ https://arstechnica.com/tech-policy/2021/03/tech-critic-tim-... (https://news.ycombinator.com/item?id=26372971 https://news.ycombinator.com/item?id=26372971)
- rayiner 6y ago
  It’s amusing to me considering the degree to which tech backed Biden.
  - tptacek 6y ago
    Tech labor's politics != tech capital's politics.
    - rayiner 6y ago
      Are there a meaningful number of people on the capital side who didn’t support Biden? (Or Obama for that matter?) Labor’s politics usually doesn’t match capital’s and management’s. In the auto industry owners and managers long voted Republican and workers voted Democrat, for obvious reasons. I’ve always found it odd that didn’t seem to be true for tech. At the very least, it’s a pretty aggressive bet on the AOC/Warren wing never taking power. This is not a comment on the merits. I think Wu is a bright guy and some antitrust scrutiny of tech is probably in order.
      - dredmorbius 6y ago
        Capital's metric is dollars, not heads. There have been several notable names. Peter Thiel, Larry Ellison, and Scott McNealy, off the top of my head. Most Trump supporters kept it pretty much on the down low. Doug Leone (Sierra Capital) seems to be named most often, though even he broke after the January 6 Coup. Brian Krzanich (Intel) was, so long as nobody heard about it. Palmer Luckey (Facebook), David Blumberg (Blumberg Capital). Vocally opposed: Meg Whitman, Marc Andreessen, and John Chambers (ex-Cisco), all notably conservative. https://www.vox.com/recode/2019/9/17/20869679/donald-trump-silicon-valley-fundraiser-2020 https://www.vox.com/recode/2019/9/17/20869679/donald-trump-s... Keep in mind too that dark money and Citizens United most especially makes true support difficult to trace. Arguing that there are no names whilst the names that exist can and often do utilize secret funding mechanisms is highly disingenuous.
hguant 6y ago
Oh look, another political appointee who didn't do their job, and is now advocating for other people to do the work they were too afraid to do. Give me a break, it's just another useless "advocate" pimping their book.
avalys 6y ago
It's kind of hard to argue that Facebook has a monopoly on "social media" when there's so much actual competition for attention in the same space. Twitter, TikTok, Snapchat, iMessage, Youtube, etc. Yeah, there is no other Facebook-style social network to share photos of your grandkids or whatever, but no one under the age of 30 even uses that these days and it's hard to argue that it's as deserving of government intervention as oil, railroads, or telecom in general were. I'd be looking much more closely at Amazon (nearing a monopoly on e-commerce, soon to be all commerce) and Google (an actual monopoly on search) if I were the government...
- dataflow 6y ago
  Interesting point. Facebook has 2.8B active monthly users. How many does the next highest one have? TikTok has 680M which is not even a quarter of that.
  - Aerroon 6y ago
    What do the numbers look like in the US though? I did some googling and found about 190M for Facebook, 80M for TikTok, and 70M for Twitter. I don't know how accurate the numbers are, because they were from pretty sketchy sources. But if the real numbers are anywhere close to that, then that does make it seem like Facebook has a fair few competitors.
    - deleted 6y ago
      [deleted]
    - inglor_cz 6y ago
      Aggregate spent time is probably the most interesting metric. Plus, if a service visibly dominates in some demographics (e.g. 35-50), is it a "local monopoly" in the same sense as if it dominated in a geographic region, say, the Midwest? Because if all your friends and colleagues and schoolmates use service X, you are strongly incentivized not to go to another competing service where only much younger / much older people are.
- rsj_hn 6y ago
calimac 6y ago
FB, alphabet especially (google and YouTube), Twitter an all other similar modeled tech companies should be dismantled for the sake of humanity.
jimmont 6y ago
Excellent article and remarkably easy to identify the anticompetitive behavior which is the fundamental issue. Add to this CA Prop 22, among other related problems it'll be interesting to see what government does to exercise its power appropriately and encourage competition in the market. Appreciate the clarity Tim Wu and Wired contribute.

66 points by spzx 6y ago

FB is no different or better than big oil or big telco. Hopefully the people who work there begin to realize the damage they are doing to this country.

TylerE 6y ago
Strongly disagree that it's no differnet. Oil and telco doesn't have network effects. It doesn't matter if your friend fuels his car with Citgo or BP.
- dredmorbius 6y ago
  Oil's network effects are largely on the production and distribution side. Rockefeller bought out refineries and negotiated railroad rebates ... on both his own and competitors' shipments (the latter paid to him, not the competitors). Telephony very much has network effects, which played a key role in how AT&T built its monopoly (early 20th century). As do other "network corporations": railroads, commodity trusts, wholesale and retail, banking, information services, higher education.
- bopbeepboop 6y ago
  Telco has network effects, we just mandated interoperability to neutralize them. The same lessons would work on social media: I should be able to choose what site I view a post to FB from my network from the same way I can choose what operator provides my phone service.
tjpnz 6y ago
>Hopefully the people who work there begin to realize the damage they are doing to this country. They might not realise it now but I suspect they would should they leave. I for one would feel very uncomfortable working with someone who's ex-Facebook and I don't think I'm alone in that regard. FWIW the damage Facebook's caused goes far beyond the United States.
Karsteski 6y ago
Which country is this country?

jamestimmins 6y ago

If you haven't read his book The Master Switch, it's a fantastic read on the history of communication technology. https://www.amazon.com/Master-Switch-Rise-Information-Empires/dp/0307390993 https://www.amazon.com/Master-Switch-Rise-Information-Empire...

websites2323 6y ago
Even better is “The Attention Merchants.” Pair that with Zuboff’s “The Age of Surveillance Capitalism” and you’ll have a good foundation for how dangerous Facebook is. Something needs to be done. Monopoly is a means to an end here, but it might not get the job done. What need is a ban on behavioral advertising full stop.

mimikatz 6y ago

Facebook seems like the least of the big techs that are the most abusive of monopoly (outside of netflix). Google is by far the most abusive, Apple is the most locked down, Amazon is the most disruptive. Facebook is just for casual communication and isn't as business impacting.

0xB31B1B 6y ago
Facebook is the most anti-competitive of them all IMO. "Monopolist" and "anti-competitive" are overlapping yet distinct legal concepts in antitrust law. Facebook had a well known "buy or bury" strategy where they would either buy their competitors or try to destroy them. What is interesting is that IMO FB has had antitrust pressure before google/apple/amazon and this basically froze FB's M&A teams for the past ~4 years. In this time we have seen 4 new promising independent social media networks arise (tiktok, dispo, clubhouse, substack). IMO without the antitrust pressure against FB the current state of social media would be more consolidated, less likely that these 4 new networks would be independent/growing quickly at this stage.
- mimikatz 6y ago
  Amazon told diapers.com sell to us or we will sell diapers at below cost until you run out of money. Maybe I am just old and the "real" world seems much more legit than the social media world. Sure Facebook bought a lot of companies, but there isn't a ton they do to smoosh them together. They seem pretty independent. Facebook's ability to kill seems weak. TikTok is still doing well and Reels didn't eat into them. Clubhouse is new and up and coming. Much more competitors than new search engines (which isn't even what Google really is anymore). Apple does have more a variety and mix of competition as well as less market share than the other Tech giants.
  - bostonsre 6y ago
    What are facebook acquisitions where the acquired companies have remained independent? Whatsapp, Instagram, and oculus seem like they have been assimilated a good amount. re: tiktok and clubhouse I think the op made a good point about the Facebook m&a spree being put on hold due to their legal troubles a few years back and now can only try to clone/crush competitors now. They cloned tiktok and wouldn't be surprised to hear they have a clubhouse clone in the works.

dredmorbius 6y ago

In related news, Tim Wu has accepted an appointment to serve the Biden Administration on the National Economic Council. "White House signals coming antitrust push with Tim Wu appointment" Wu will be serving on the National Economic Council as special assistant to the president for technology and competition policy, the White House said this morning. Wu confirmed the news in a tweet. https://arstechnica.com/tech-policy/2021/03/tech-critic-tim-wu-joins-biden-admin-as-tech-competition-advisor/ https://arstechnica.com/tech-policy/2021/03/tech-critic-tim-... (https://news.ycombinator.com/item?id=26372971 https://news.ycombinator.com/item?id=26372971)

rayiner 6y ago
It’s amusing to me considering the degree to which tech backed Biden.
- tptacek 6y ago
  Tech labor's politics != tech capital's politics.
  - rayiner 6y ago
    Are there a meaningful number of people on the capital side who didn’t support Biden? (Or Obama for that matter?) Labor’s politics usually doesn’t match capital’s and management’s. In the auto industry owners and managers long voted Republican and workers voted Democrat, for obvious reasons. I’ve always found it odd that didn’t seem to be true for tech. At the very least, it’s a pretty aggressive bet on the AOC/Warren wing never taking power. This is not a comment on the merits. I think Wu is a bright guy and some antitrust scrutiny of tech is probably in order.
    - dredmorbius 6y ago
      Capital's metric is dollars, not heads. There have been several notable names. Peter Thiel, Larry Ellison, and Scott McNealy, off the top of my head. Most Trump supporters kept it pretty much on the down low. Doug Leone (Sierra Capital) seems to be named most often, though even he broke after the January 6 Coup. Brian Krzanich (Intel) was, so long as nobody heard about it. Palmer Luckey (Facebook), David Blumberg (Blumberg Capital). Vocally opposed: Meg Whitman, Marc Andreessen, and John Chambers (ex-Cisco), all notably conservative. https://www.vox.com/recode/2019/9/17/20869679/donald-trump-silicon-valley-fundraiser-2020 https://www.vox.com/recode/2019/9/17/20869679/donald-trump-s... Keep in mind too that dark money and Citizens United most especially makes true support difficult to trace. Arguing that there are no names whilst the names that exist can and often do utilize secret funding mechanisms is highly disingenuous.

hguant 6y ago

Oh look, another political appointee who didn't do their job, and is now advocating for other people to do the work they were too afraid to do. Give me a break, it's just another useless "advocate" pimping their book.

avalys 6y ago

It's kind of hard to argue that Facebook has a monopoly on "social media" when there's so much actual competition for attention in the same space. Twitter, TikTok, Snapchat, iMessage, Youtube, etc. Yeah, there is no other Facebook-style social network to share photos of your grandkids or whatever, but no one under the age of 30 even uses that these days and it's hard to argue that it's as deserving of government intervention as oil, railroads, or telecom in general were. I'd be looking much more closely at Amazon (nearing a monopoly on e-commerce, soon to be all commerce) and Google (an actual monopoly on search) if I were the government...

dataflow 6y ago
Interesting point. Facebook has 2.8B active monthly users. How many does the next highest one have? TikTok has 680M which is not even a quarter of that.
- Aerroon 6y ago
  What do the numbers look like in the US though? I did some googling and found about 190M for Facebook, 80M for TikTok, and 70M for Twitter. I don't know how accurate the numbers are, because they were from pretty sketchy sources. But if the real numbers are anywhere close to that, then that does make it seem like Facebook has a fair few competitors.
  - deleted 6y ago
    [deleted]
  - inglor_cz 6y ago
    Aggregate spent time is probably the most interesting metric. Plus, if a service visibly dominates in some demographics (e.g. 35-50), is it a "local monopoly" in the same sense as if it dominated in a geographic region, say, the Midwest? Because if all your friends and colleagues and schoolmates use service X, you are strongly incentivized not to go to another competing service where only much younger / much older people are.
rsj_hn 6y ago

calimac 6y ago

FB, alphabet especially (google and YouTube), Twitter an all other similar modeled tech companies should be dismantled for the sake of humanity.

jimmont 6y ago

Excellent article and remarkably easy to identify the anticompetitive behavior which is the fundamental issue. Add to this CA Prop 22, among other related problems it'll be interesting to see what government does to exercise its power appropriately and encourage competition in the market. Appreciate the clarity Tim Wu and Wired contribute.