6 ms·

I know it's cynical, but what will come out of this? Another $10m fine for a company that makes $3.5b a month (1)? (1) https://investor.fb.com/investor-news/pr

I know it's cynical, but what will come out of this? Another $10m fine for a company that makes $3.5b a month (1)? (1) https://investor.fb.com/investor-news/press-release-details/2021/Facebook-Reports-Second-Quarter-2021-Results/default.aspx https://investor.fb.com/investor-news/press-release-details/...

bingdig 5y ago
The proposed remedy in the complaint is the divestiture of Instagram and / or WhatsApp (extremely unlikely) and increased oversight on Facebook in the future that would make similar acquisitions much more difficult (more likely).
- cwkoss 5y ago
  Spinning Instagram and Whatsapp off of Facebook seems like it would benefit everyone except facebook stockholders.
  - jessaustin 5y ago
    As Scott Galloway has been saying for years, it would be great for stockholders. Facebook is an old-n-busted service for old-n-busted people. (You might think I'm one of those, using such an old-n-busted idiom, but even I'm young enough not to be on Facebook.) IG and Whatsapp both would thrive if they weren't chained to all that dead weight. Divestiture wouldn't be so good for Facebook execs, but does anyone care about them?
    - jessaustin 5y ago
      TIL "old-n-busted" is an autological idiom. As is... "autological". https://news.ycombinator.com/item?id=28248090 https://news.ycombinator.com/item?id=28248090
  - Wohlf 5y ago
    It would be great for shareholders, much like splitting Standard Oil was.
  - thekyle 5y ago
    If Instagram and WhatsApp were spun off, I assume Facebook shareholders would also get shares in the new companies.
- waynesonfire 5y ago
  thus, further strengthening FBs moat as their competitors will have a cap on their growth.
blitzar 5y ago
These companies are now too big to fail and too big to meaningfully prosecute, even a $1bn fine is not really going to trouble the likes of facebook. Any more meaningful punishment would have pretty adverse financial market and political impacts, which people would get over eventually but would take some serious conviction to inflict. The only real recourse is to stop more of the same happening again in the future.
- kbenson 5y ago
  > These companies are now too big to fail I'm not sure why you would think that, and I don't think anything you explained supports that. I'm also not sure it makes any sense at all when applied to Facebook. Facebook is not going to "fail" over a weekend like Bear Stearns. If it dies, it will be a slow hemorrhaging death, and there will be plenty of time for employees and investors to deal with it. Even if a law were to be passed tomorrow saying they couldn't collect and monetize non-provided personal information and that they couldn't advertise to uses, there would still be a year or two of them wildly trying to pivot, not a collapse over a few days, and the effect on the wider ecosystem of tech wouldn't be all that important. Saving major financial institutions because they were too bug to fail was not just because they were big, but because the finance sector is all intricately connections, and if a large enough player collapses the cascading effects of missing money could have a very outsized effect and drag the economy down. Facebook? Nobody would really care. A competitor or new alternative would absorb the users fairly quickly. The only thing of value that would be lost, and probably not even that, is the list of people you're friends with. Honestly, Google might not be much more important, other that they just employ way more people. Probably not Apple either (having to switch to Android/Window is an inconvenience, not a major life change). Amazon would actually have a big effect though. The amount they've integrated themselves into the supply chain for normal people and how many people sell on it would cause major disruptions if it were to disappear within a year or two. Or maybe not, I'm sure Walmart would love for you to use them instead, or Alibaba. Nothing says the American company has to be the preferred one for Americans.
  - blitzar 5y ago
    In the case where actual prosecution was conducted, as you suggest - what would be the opening price on the Monday morning for the share price? Bear Sterns peak valuation was 20billion, Facebook sits at 1,000billion. Just wiping half that value off over a weekend would be 'not a great day in the financial markets' - if no other stock moves (and they will), it's -5% on the Nasdaq on the first tick of the day. People would lose money, some probably a lot of money, in May 2021 Facebook was the most widely owned stock by hedge funds. Now I am not suggesting anyone should lose sleep over some billionaires losing a bit of money - 'people would get over eventually'. However it would come down to a question of political will rather than points of law to persue a meaningfully prosecute or reduce the power of Facebook (and others) in any way, and any aftermath, as short term as it may be, would be considered to be self-inflicted by the politicians that conducted the exercise. Tech is, through its collective behavior and practices, interconnected. If the political will emerges to curtail tax evasion, monetization, etc in the sector, the valuations of every tech company conducting their affairs similarly would be called into question.

bingdig 5y ago

The proposed remedy in the complaint is the divestiture of Instagram and / or WhatsApp (extremely unlikely) and increased oversight on Facebook in the future that would make similar acquisitions much more difficult (more likely).

cwkoss 5y ago
Spinning Instagram and Whatsapp off of Facebook seems like it would benefit everyone except facebook stockholders.
- jessaustin 5y ago
  As Scott Galloway has been saying for years, it would be great for stockholders. Facebook is an old-n-busted service for old-n-busted people. (You might think I'm one of those, using such an old-n-busted idiom, but even I'm young enough not to be on Facebook.) IG and Whatsapp both would thrive if they weren't chained to all that dead weight. Divestiture wouldn't be so good for Facebook execs, but does anyone care about them?
  - jessaustin 5y ago
    TIL "old-n-busted" is an autological idiom. As is... "autological". https://news.ycombinator.com/item?id=28248090 https://news.ycombinator.com/item?id=28248090
- Wohlf 5y ago
  It would be great for shareholders, much like splitting Standard Oil was.
- thekyle 5y ago
  If Instagram and WhatsApp were spun off, I assume Facebook shareholders would also get shares in the new companies.
waynesonfire 5y ago
thus, further strengthening FBs moat as their competitors will have a cap on their growth.

blitzar 5y ago

These companies are now too big to fail and too big to meaningfully prosecute, even a $1bn fine is not really going to trouble the likes of facebook. Any more meaningful punishment would have pretty adverse financial market and political impacts, which people would get over eventually but would take some serious conviction to inflict. The only real recourse is to stop more of the same happening again in the future.

kbenson 5y ago
> These companies are now too big to fail I'm not sure why you would think that, and I don't think anything you explained supports that. I'm also not sure it makes any sense at all when applied to Facebook. Facebook is not going to "fail" over a weekend like Bear Stearns. If it dies, it will be a slow hemorrhaging death, and there will be plenty of time for employees and investors to deal with it. Even if a law were to be passed tomorrow saying they couldn't collect and monetize non-provided personal information and that they couldn't advertise to uses, there would still be a year or two of them wildly trying to pivot, not a collapse over a few days, and the effect on the wider ecosystem of tech wouldn't be all that important. Saving major financial institutions because they were too bug to fail was not just because they were big, but because the finance sector is all intricately connections, and if a large enough player collapses the cascading effects of missing money could have a very outsized effect and drag the economy down. Facebook? Nobody would really care. A competitor or new alternative would absorb the users fairly quickly. The only thing of value that would be lost, and probably not even that, is the list of people you're friends with. Honestly, Google might not be much more important, other that they just employ way more people. Probably not Apple either (having to switch to Android/Window is an inconvenience, not a major life change). Amazon would actually have a big effect though. The amount they've integrated themselves into the supply chain for normal people and how many people sell on it would cause major disruptions if it were to disappear within a year or two. Or maybe not, I'm sure Walmart would love for you to use them instead, or Alibaba. Nothing says the American company has to be the preferred one for Americans.
- blitzar 5y ago
  In the case where actual prosecution was conducted, as you suggest - what would be the opening price on the Monday morning for the share price? Bear Sterns peak valuation was 20billion, Facebook sits at 1,000billion. Just wiping half that value off over a weekend would be 'not a great day in the financial markets' - if no other stock moves (and they will), it's -5% on the Nasdaq on the first tick of the day. People would lose money, some probably a lot of money, in May 2021 Facebook was the most widely owned stock by hedge funds. Now I am not suggesting anyone should lose sleep over some billionaires losing a bit of money - 'people would get over eventually'. However it would come down to a question of political will rather than points of law to persue a meaningfully prosecute or reduce the power of Facebook (and others) in any way, and any aftermath, as short term as it may be, would be considered to be self-inflicted by the politicians that conducted the exercise. Tech is, through its collective behavior and practices, interconnected. If the political will emerges to curtail tax evasion, monetization, etc in the sector, the valuations of every tech company conducting their affairs similarly would be called into question.