15 ms·

Diseconomies of scale in fraud, spam, support, and moderation

329 points by davidmckenna 3y ago

no_wizard 3y ago
What all this says to me, in total, is that greater competition where you have a bunch of potentially medium sized companies or smaller but no clear massive (50%+ market share) leader that power can’t congregate means they have both incentive to provide a better experience and having multiple targets makes it harder on negative actors, effectively. Thats my takeaway here is that we should as a matter of regulation / spirit of market competition lean on incentivizing creating medium (mid?) size companies worth collective $100 billion+ than a few giant trillion dollar corporations, as it relates to majority software companies. I think with hardware it’s A bit different when it comes to economies of scale so I don’t know how that could break down and I don’t want to include that for the sake of argument but there could be something there too
- pixl97 3y ago
  Otherwise summed up as "Monocultures suck"
- graemep 3y ago
  That is true in any market, not just software. There is a large element of regulatory capture that shapes regulation to favour bigger businesses instead of reining them. Software and online services have been particularly bad because there are so many ways to work around regulation. Apple's current malicious compliance with the EU is an egregious one, but most are more subtle (FB persuading regulators to let them take over whatsapp by arguing chat and social media are different markets). Ideally, IMO, we should aim to prevent monopoly, not just abuse of monopoly (which is what regulators currently do): https://pietersz.co.uk/2009/11/fix-capitalism https://pietersz.co.uk/2009/11/fix-capitalism
- Geisterde 3y ago
  It is the general consensus that competition in the market place is good for consumers and propels business to find creative solutions that create value in the econony. I would say that isnt always the case, Rockefeller had something like 90% market share before litigation of antitrust began, by the time the case was adjucated their market share had already slipped; what this indicates is that even when one party holds 90% of market share (and probably total wealth for that matter), the market will eventually cut them down to size. At the same time, rockefeller was responsible for bringing a groundbreaking innovation to society. So, it was good that initially all that capital flowed to him, because he was using it to move society forward (at least in this regard), and it was also good to see that capital flow away on its own, because it was needed elsewhere. I would also point out that the centralization of companies into todays megacorps is influenced by many factors, economies of scale may be one, but so are intellectual property laws (we really dont need them!). In fact, I would venture a guess that most regulation is written by the companies that are being regulated, that keeps competition at bay, and they wont regulate themselves downwards in the food chain. Finally, I would say the centralization really took place during WWI/WW2, it was convenient for the government to shout orders at a whole 3 people to build tanks instead of automobiles; this centralization is a strategic goal of the united states government, and enacting it through secret deals (rather than law) is a preferable method to preserve state secrecy.
- hyperpape 3y ago
  Worth noting that by market cap, Twitter is 20-30x less valuable than Facebook.
roenxi 3y ago
> I started seeing a lot of comments claiming that you need scale to do moderation, anti-spam, anti-fraud, etc., around the time Zuckerberg, in response to Elizabeth Warren calling for the breakup of big tech companies, claimed that breaking up tech companies would make content moderation issues substantially worse Well Zuckerberg is correct in context. Politicians don't mean moderation as in everyone is being civil with each other or garbage results. That isn't a political issue. They mean things like supporting the local censorship regime which is usually country-specific. So from a political perspective, more centralisation is the only way to successfully implement moderation. Because moderation doesn't mean "behave to community standards" - it means "comply with politician's standards". Ie, moderating what people can say as part of their legal and political engagement with society. I recall when Australia had a suppression order about Cardinal Pell, high ranking official in the Catholic church who was convicted of various sex offences. And in fairness the case was a political football so the order was reasonable. It was eventually overturned but reputational damage was done because, unfortunately for the courts, there are too many foreign news organisations so the block failed miserably and it was major news in Australia without any official Australian news sources covering it. It would be relatively easy to enforce that sort of block if the major foreign distributors were just Facebook or YouTube. They'd probably cooperate with the Australian authorities on request.
- richrichie 3y ago
  This “cooperation” with the state is a huge problem though.
  - roenxi 3y ago
    Not when talking to Elizabeth Warren. It wasn't that much later that all the Hunter Biden laptop thing happened and showcased what Zuck was getting at. In context it was a straightforward, informative and correct answer for this audience. They won't be able to moderate the debate if the internet is made up of smaller companies; the coordination is much easier with just a few majors.
- graemep 3y ago
  I think there is an ambiguity in what you said. TO be clear the conviction was overturned but the news had long been globally disseminated by then.
andy99 3y ago
The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to do with efficiency, it's just getting the monopoly power to treat your customers badly and get away with it. Which, of course combined with the larger attack surface, is why bigger platforms do so much worse on spam/fraud/support.
- MichaelZuo 3y ago
  >If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. In a very small town, you won't go out of business because you'll be the only taxi service in town. Everyone can establish their 'monopoly power' in a small enough area.
  - alexey-salmin 3y ago
    Not really, because the entry barrier to create a small town taxi service is incomparably lower than creating a new Uber. 20 years ago my small town had around five fiercely-competing taxi services with cars arriving within 4-5 minutes of a phone call. In many respects that was better than the new times. Especially when it came to customer service.
    - cortesoft 3y ago
      How small a town are we talking about? I grew up in a 100,000 person city and we only had two taxi services that would take ages to arrive, depending on where you were.
      - alexey-salmin 3y ago
        Around 100k. It was in Russia though and owning a car wasn't as common as say in US. Public transport wasn't very pleasant to use either. It was an interesting case, a sort of a breakthrough in transportation habits achieved by loads of 15-years old right-hand-drive Toyotas converted into taxis. The cheapest ride was around $1 and people literally started riding taxis to the next building on the same street.
ec109685 3y ago
Amazon selling obviously fake SD cards / flash disks is baffling. It’s super easy to spot and fake disks cost users data, so you’d think they’d take that seriously. https://a.co/d/auXcxrZ https://a.co/d/auXcxrZ ($29 for 1TB as their “overall pick”)
- MattGaiser 3y ago
  I imagine they make a ton of it back from users who never need anywhere near that much space. I have the non-technical people of my life insist on a terabyte for everything. One of them bought an iPad Pro just to have a terabyte of space. After 8 years of their prior iPad, they had used up all the space (64gb I think) and wanted to be sure they wouldn’t run out.
  - margalabargala 3y ago
    Depending on usage patterns this assumption might not hold. Improvements in cameras etc are causing the sizes of the photos and videos that people take to hugely increase in size. The prior ipad you spoke of might have only recorded 720p video, while the new Pro likely does at least 4k. If they use their ipad to record video of family events, that 1tb might represent the same usage as the old one.
  - Nextgrid 3y ago
    Keep in mind that these scam devices rarely present themselves as a functional but lower-capacity version. It's more often the case that the device does present the advertised capacity, but with a massive "black hole" in the middle where any writes are silently discarded. Depending on your filesystem, you don't need to write much data at all before you're likely to hit this "black hole" and start losing data.
- nonrandomstring 3y ago
  Some work I supervised sampling Amazon and Ebay products for vendor malware showed an absolutely shocking prevalence of dodgy goods. I don't think they can stem the tide.
infogulch 3y ago
Way back in 2014 when Jeff Atwood (aka codinghorror) switched from Stack Overflow to creating Discourse, he gave a talk about it (see notes [1], sadly I can't find a live link to the recording anymore). He gave a pithy little explanation of why they built the Discourse trust levels system the way they did that stood out to me: > The only thing that scales with the community is the community. The point being, you have to grow users into moderators. Any other way of acquiring moderators is unsustainable. [1]: http://discourse.bridgefoundry.org/t/link-to-jeff-atwood-talk-about-discourse-as-a-platform/15 http://discourse.bridgefoundry.org/t/link-to-jeff-atwood-tal...
- crummy 3y ago
  I wonder how that would work for Facebook, for example. Facebook Groups have admins, but for general posts to the public (or to friends) - could they be user-moderated?
  - infogulch 3y ago
    This strategy seems to be especially effective for focused communities as they grow from 50-5000 users. As you approach facebook scales and a more generalized audience ("the public") I'd imagine the optimal strategy may shift some. A federation (small "f") of smaller, more focused communities might be the best you can hope for.
    - a_bonobo 3y ago
      Has Facebook perhaps shifted towards a federation of communities? My Facebook feed as it used to be, general life updates by various friends, is pretty much dead. Nobody posts these things anymore. However, neighbourhood groups, Buy Nothing groups, and other local special interest groups thrive, I see several daily posts in each. Plus Facebook constantly recommends me more groups. This is a n=1 experience but I wonder whether Facebook is 'falling apart' into these groups.
      - aldonius 3y ago
Mphetbug 3y ago
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CityOfThrowaway 3y ago
The author seems to be mistaking the benefit of selection effects with competence. Those who work anti-fraud for platforms know that there is something like a market for fraud. There is a market clearing quantity of fraud that will be present on any platform, dictated by the gains from learning to execute the exploit, the effort necessary to do so, and the number of times one might be able to do it. Small platforms have way less fraud because they are way less valuable to exploit, in general. And that's caused by _the very fact that they are small_. The big platforms actually are radically more competent at anti-fraud / anti-spam / etc, but the scope of their operations make them such juicy targets that there is a lot of it anyways. It the entire world of fraudsters against Amazon, or Google, or Facebook. That's a highly unequal battle and it's surprising how well the platforms fare, all things considered.
- alexey-salmin 3y ago
  I don't see any mistake. > Small platforms have way less fraud because they are way less valuable to exploit, in general. Yes. > The big platforms actually are radically more competent at anti-fraud / anti-spam / etc, but the scope of their operations make them such juicy targets that there is a lot of it anyways. If their business model (scale above everything) results in shitty customer experience I don't really care how competent they are. They are fighting the problem they created themselves: a platform too valuable for scammers.
  - 8note 3y ago
    > If their business model (scale above everything) results in shitty customer experience I don't really care how competent they are. It's a tradeoff. If your customer service is good such that more people shop there, there will be more fraud attempts overall. It's not that a platform is too valuable for scammers, it's that a platforms is valuable at all. All platform value is value for scammers, and the most useful platform will also have the most scammers on it
    - alexey-salmin 3y ago
      This is like saying that everything (including scam attempts) is proportional to the scale so the scale doesn't really matter. It's not true. Scale bring synergy and reduces costs. But it's a two-way road which works for scams too: scamming one big platform and fighting one anti-fraud system is ten times more cost-efficient than adjusting to ten smaller ones.
nonrandomstring 3y ago
There's a lot to unpack in this article, but the key idea is the "myth of big" and that small is beautiful. It should be no surprise that Big-Tech succeeds in part by creating its own powerful mythology. All giant organisations, nations states too, build myths of unique competence, infallibility, and exceptionalism. At the same time it hardly needs saying that scale brings inefficiency, corruption, sluggishness, and insensitivity. If it weren't for protectionist measures in place to sustain big monopolies they'd be torn asunder in real competitive conditions.
- jseliger 3y ago
  "the key idea is the "myth of big" and that small is beautiful" Based on a cmd-f, I don't see the words "myth" or "beautiful" in the article, and Luu writes: It's easy to name ways in which economies of scale benefit the user, but this doesn't mean that we should assume that economies of scale dominate diseconomies of scale in all areas. Although it's beyond the scope of this post, if we're going to talk about whether or not users are better off if companies are larger or smaller, we should look at what gets better when companies get bigger and what gets worse, not just assume that everything will get better just because some things get better (or vice versa).
  - nonrandomstring 3y ago
    5 + 4 3 * 3 10 - 1 sqrt(81) I can't see the number 9 anywhere above. Can you find it?
rgmerk 3y ago
The claim that small platforms are better at moderation needs some nuance. In terms of content that is annoying or worse to the forum’s users, it’s probably broadly true. But it’s not necessarily true for content that the users of the forum are fine with, but society more broadly has issues with. Take for instance forums which are devoted to sharing “revenge porn”.
kmeisthax 3y ago
>By comparison, on lobste.rs, I've never seen a scam like this and Peter Bhat Harkins, the head mod says that they've never had one that he knows of. On Mastodon, I think I might've seen one once in my feed, replies, or mentions. I self-host Mastodon and my mentions are chock full of this one Japanese Discord cybercrime server[0]'s invites. This only started four days ago, but it's already making Mastodon almost as bad as Musk-era Xitter spam. The front-line tool for moderating federated spam is to block the instance that sent it. A year ago, most spam were rando servers following everyone they could think of. However, the Japanese Discord guys are almost slightly kinda smart: they started registering accounts on smaller (non-single-user) instances. Because Mastodon doesn't support any kind of account verification[1], any instance with open registration (i.e. "just sign up") is effectively an open relay for spammers. I don't consider this to be negating the post, but it is relevant context. [0] They advertise DDoS, hacking, and stolen credit card services, or at least that's what I was able to glean from the Japanese language advert they sent [1] This is why Google requires you to verify with an SMS code to do anything e-mail or YouTube related, for example - it lets them throttle how many registrations per year you can do with that number.
tareqak 3y ago
> In my social circles, many people have read James Scott's Seeing Like a State, which is subtitled How Certain Schemes to Improve the Human World Have Failed. A key concept from the book is "legibility", what a state can see, and how this distorts what states do. One could easily write a highly analogous book, Seeing like a Tech Company about what's illegible to companies that scale up, at least as companies are run today. A simple example of this is that, in many video games, including ones made by game studios that are part of a $3T company, it's easy to get someone suspended or banned by having a bunch of people report the account for bad behavior. What's legible to the game company is the rate of reports and what's not legible is the player's actual behavior (it could be legible, but the company chooses not to have enough people or skilled enough people examine actual behavior); and many people have reported similar bannings with social media companies. When it comes to things like anti-fraud systems, what's legible to the company tends to be fairly illegible to humans, even humans working on the anti-fraud systems themselves. I think legibility is one aspect of it, but I think another could very well be empathy. If you want to support a user who has a problem, then you have to want to help them and follow through. If you want to make a customer whole after they lost money on your platform, then you want to pay them back and follow through. If you want to stop your platform to be a tool used to disseminate hate, then you want that outcome and move heaven and earth to make it happen. You have to want to see the problems and you have to want to follow through and fix them.
andrewljohnson 3y ago
It’s not apples to apples… are the small/medium platforms really going to be lacking in fraud etc if there are no large platforms to target? The small sites only lack fraud because the large platforms draw the fire.
jseliger 3y ago
Well, I received a keychron keyboard a few days ago. I ordered a used K1 v5 (Keychron does small, infrequent production runs so it was out of stock everywhere). After some examination, I've received a v4. It's the previous gen mechanical switch instead of the current optical switch. Someone apparently peeled off the sticker with the model and serial number and one key stabilizer is broken from wear, which strongly implies someone bought a v5 and returned a v4 they already owned. Apparently this is a common scam on Amazon now This is a tangent, but I just looked at Keychron's website, and I don't know how someone is supposed to choose from all the models and options. And there seems not to be a "comparison" page on their site.
- Nursie 3y ago
  I bought one recently, a K8. I was also confused, I think I had to find a reddit thread explaining what the ranges were ... IIRC Q is the full-fat, fully programmable, hot-swappable top of the range. V is like Q but a bit more budget-friendly, may have plastic cases etc. K is their 'standard' range, some have hot-swappable switches, some don't, generally not programmable. C is budget K, wired only. But then there's various pro, max, god knows what variants. It's a ludicrously wide product range. All I can say for sure is I really like my K8.
- pushcx 3y ago
  They do have a comparison page, but it's hard to find, incomplete, and leaves out significant information: https://www.keychron.com/blogs/news/difference-among-keychron-keyboards https://www.keychron.com/blogs/news/difference-among-keychro... The KeyChron Discord has seen enough questions that it has many bot autoresponders to explain model differences. I thought the experience of selecting among the many very similar, poorly-named models was a frustrating slog, but it seems unlikely to change given that they sell out their production runs. As long as you happen to quote it, I forgot a key sentence in my story: I placed my order with the official Keychron store and it was fulfilled by Amazon.
andrewljohnson 3y ago
As a counterexample, there are and were plenty of bad actors on phpbb forums.
bawolff 3y ago
I largely agree, although i think the author misses on some of the examples. Reddit is not an example of being bad due to this affect, but an example of being good because of it. Reddit is not one huge platform but a combination of thousands of subreddits independently moderated. That is how reddit remains good, because small subreddits have small scale. Running your own email server isn't a counterexample, but is legit terrible because in essence you aren't moderating a small community, you are moderating the whole world, but just your view of it, since anyone can email anyone. That is the worst because it is the worst of both worlds - no budget from being big scale but still all the problems of being large scale.
- nobut8 3y ago
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- mjevans 3y ago
  Worse, spammers are better at their 'professional job' (getting mail past other people's spam filters and inane preferences) than your tiny mail server or small group of employees who don't understand how to not look spammy. Like not having annoying email 'signatures' and other anti-patterns commonly found in corporations.
  - Loughla 3y ago
    > Like not having annoying email 'signatures' What?
    - rashkov 3y ago
      I used to work IT helpdesk and once spent weeks trying to find out why my company’s emails were getting bounced all of the sudden. We had just switched to Microsoft’s hosted exchange (office 365) so we figured that must be it. I escalated the issue until I got some very technical folks on the phone, but all they could say was that everything looked 100% fine and that something we were sending was tripping the spam filters. I thought about it and realized we recently changed our email signatures to include a bit.ly shortened link. I guess spammers also use that to obfuscate their links so we were indeed sending out sketchy email
hislaziness 3y ago
From the fraudsters/spammers perspective large platforms provide the economies of scale.
roca 3y ago
I wonder if AI is going to change the equation here --- by making it much cheaper to run spam campaigns against thousands of different small forums.
- add-sub-mul-div 3y ago
  The data pollution is going to be vast.
washmyelbows 3y ago
I spent a good chunk of time at a small company trying to mitigate spam, it always felt like an uphill battle that google just did significantly better than I could. I'm not one to usually advocate outsourcing services that my department could provide, but it felt like the right call to outsource email so that it would be better for the users.
rossdavidh 3y ago
There are a lot of cases where smaller is better. This article, for example, is way too long (although basically on target).
- graton 3y ago
  Agreed. I wonder if anyone read the entire article. Firefox reader mode says 293–372 minutes to read the article. Which is 4 hours 53 minutes - 6 hours 12 minutes. Though I do think reader mode can overestimate by a lot. Still a 53,000+ word article is going to take a long time to read.
Animats 3y ago
This is easy to fix. Make Amazon responsible for warranting all sales on their platform. Amazon claims they are not the seller, some anonymous party running an ad on their platform is the seller. That was litigated in Pennsylvania, and when it got to the level that Amazon was looking at a major lose, Amazon settled to avoid a precedent. On the ad front, anyone who runs an ad for a third party should have to be able to produce the actual name and address of the advertiser on request, or accept responsibility for the contents of the ad. Businesses have no right to be anonymous. That is existing law in the EU and California. Fraud is a problem because the major platforms get a free pass on supporting it. Not because it's hard.
- kurthr 3y ago
  KYC or you're liable. Interesting solution. It's kinda amazing it's not already that way (since advertisers need to get paid). I guess it would make it harder to advertise, if you're not already big so that could hurt little guys, but so is scamming customers.
  - lotsofpulp 3y ago
    KYC just incentivizes discrimination. Eventually ends up with innocent people not being able to get bank accounts or rent hotel rooms because they get associated with prior probabilities that do not necessarily apply to them, aka discrimination. Punishing scammers to dissuade and reduce the quantity of scammers is the government’s job and should not be laid on businesses, for a well functioning high trust society. If international jurisdictions are a problem, then the national government needs to provide an identify verification API for businesses so they know the customer they are dealing with is subject to the legal system of the country.
    - Nursie 3y ago
      This is nonsense. Businesses are not above the law and claiming that you are only a proxy or that what you do is too complex shouldn't get you out of having to follow those laws. We're talking KYC (or direct liability) for businesses here. There is nothing discriminatory about it.
nitwit005 3y ago
This is partly just economy of scale for the scammers. Every additional platform you target costs money, so naturally they tend to target Facebook, Google, and friends.
waynesonfire 3y ago
Its almost like if you have a diverse ecosystem its harder to spam everyone. When there is just the bug three, you only have to crack their algorithms to get spam everyone. Spam takes advantage of the same economies of scale and does it better. Seems like it works exactly opposite of how Zuckerberg describes it. Not surprised.
diebeforei485 3y ago
Larger platforms care more about protecting the platform, even at the cost of mistakenly banning users. They can afford to do this because they already have lots of users. Smaller platforms will not want to mistakenly ban users.
jonathanlydall 3y ago
The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there were many mechanisms in place to spot fraudulent credit card transactions and cancel them before they actually billed the card holder, but there was no process for reporting the fraudsters to prevent them doing the same thing again tomorrow. This is probably the same strategy that every company does, because there is no practical action any company can do to try make fraudsters accountable and thus discourage them from simply trying again. So the problem of fraud is getting ever bigger and increasingly unmanageable and out of control. The problem is a non-trivial political one, governments need to create task forces to work to reduce the size of the fraud industry, perhaps by catching fraudsters and making them accountable. The problem is even harder than simple political will though, because it’s cross jurisdictional, meaning governments of different countries all need to work together on this. This may seem impossible at the moment, but I believe until it is achieved fraud is only going to get increasingly worse.
- itake 3y ago
  and the companies have no incentive to investigate fraud further once it has stopped, especially if they fraudsters are international.
- palmfacehn 3y ago
  From the article: >And if I ask who do I trust more, my local reputable electronics shop (Memory Express, B&H Photo, etc.), I trust my local reputable electronics shop more. Not only are they less likely to sell me a counterfeit than Best Buy, in the event that they do sell me a counterfeit, the service is likely to be better. An international, multi-government taskforce is one solution, potentially. Maybe not. For the problem presented at the top of the article, shopping locally seems like an easy win in comparison.
  - nradov 3y ago
eightnoteight 3y ago
> "these systems have to be fully automated because no one could afford to operate manual systems at our scale", what's really being said is more along the lines of "we would not be able to generate as many billions a year in profit if we hired enough competent people to manually review cases our system should flag as ambiguous, so we settle for what we can get without compromising profits". well anything that comes out of any business has these intentions for sure, but statements could be like multi-dimensional vectors, they could be doing 2 things at once the ROI for fraud is low for a smaller platform and so it doesn't happen for smaller scale companies as much as it does for bigger scale. but given the interested party who is explicitly looking for the target cohort even the smaller platforms see the fraud so even if social media as whole were to split into multiple entities, the ROI would still make sense for fraudsters to continue the fraud. even if you have 1000s of entities, there would be a startup who can build a wrapper out of those 1000s of entities to make the fraud ROI possible. just like how there are businesses that offer scraping competitors
Anotheroneagain 3y ago
The problem here is that it's the scammer who experiences the economies of scale, but not the moderation. A big platform is worth a hundred thousand times more for the scammer than Mr 0.0001% but the cost of moderation is the same for both.
BrenBarn 3y ago
I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation. One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary for this is the tendency for large companies to shift from "doing what they do" to protecting their market position. That means spending more time on non-core activities, and in some cases even trying to expand into totally unrelated markets (as seen with large conglomerates). It is only when we talk about "economics" in the sense of money-making for an individual company that "economies of scale" are a good thing. In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful. I think we should view economies of scale like the rampant growth of grass or weeds: they are natural phenomena, but that doesn't mean they're good, and in fact for most practical purposes they need to be actively opposed. It's natural for grass to grow, and if it doesn't, it may indicate a problem, but you should still cut the grass every so often. Likewise it is natural for companies to grow, but big companies should regularly be broken up simply because they have become big.
- jakewins 3y ago
  > In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful You had me until here. Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There’s truth in both sides there - we want nail production to not be done by hand, but also real humans with power to change things to answer the phone when we call support.
  - Anotheroneagain 3y ago
    I'm not sure about that though. Ready to wear clothing is obviously inferior to tailored clothes, and it's not clear to what extent it's actually cheaper, and how much it abuses cheap labor. There may be an optimal scale for everything, and you start losing once you exceed it.
slv77 3y ago
This author is essentially arguing that the security of his garden shed is equivalent to the security of most banks because statistically banks get robbed more often. Spammers and scammers have a fixed cost to initiate an attack and the potential return on investment is proportional to the user base. A platform below a certain size simply isn’t profitable to attack. It isn’t that small shops are going to be better at mitigating spammers and scammers as the article states, small shops just aren’t being attacked. If the arguments were true that there are diseconomies of scale there wouldn’t have ever been consolidation in email hosting. Email providers all use the same protocols so the incremental cost of attacking a small provider is zero. A small company hosting their own email will quickly see their customers flee for the big providers as they drown in spam. Scaling spam management was the primary driver that drove consolidation in email providers in the early 2000’s. This also drove consolidation in areas with similar economics such as e-commerce. The low cost of attacking a new player in the e-commerce space and the cost of scaling risk management drove a lot of the growth of PayPal and spawned the growth and consolidation of outsourced e-commerce fraud risk management. The economics are going to be true of any n-squared business model where the value is in the size of the network. I go to LinkedIn because it has the lowest scam rates but because most of the people I work with are there. While a wildly diverse ecosystem would be more resilient against fraud this is the internet, the biggest n-squared system of them all. It’s unlikely that the internet is going to devolve into small, diverse fiefdoms so the problem is here to stay.
bsder 3y ago
The issue is law. If a "ban" was considered "defamation" and you could take a FAANG to court and be awarded $1 Million in damages, suddenly FAANGs would be superb at avoiding false positive bans.
- samatman 3y ago
  There's a kernel of a good idea here, but banning someone from a platform isn't defamation by any reasonable interpretation.
  - bsder 3y ago
    In what way are unwarranted bans not defamation? Anyone who used to see your account and watched it suddenly go away is under the impression that you "did something bad which got you banned". That is a public statement about your character. If you did NOT do something bad, that should be actionable.
nojvek 3y ago
I agree with some parts not all of them. His point of fraudulent Amazon SD cards makes sense but you could get fraudulent cards in other places too. Amazon has one of the best return policies and support. I once bought a portable AC from a small shop and they wouldn’t take it back even though it was quite noisy compared to what they had advertised. Large platforms e.g Google and Meta pride themselves that they have billions of users with very few engineers. The problem is Google thinks engineers should be isolated from users and support can be algorithmified. More often than not, it fails. I am all for smaller companies when it comes for human touch. However there is a case for economies of scale when a problem is simple and can be captured fully by an algorithm. E.g YouTube only really works because they have algos to detect what background music is attached to what video. Imagine if humans were doing it? They wouldn’t be consistent. The truth is that computers are slowly getting better at understanding the real messy world. And the reverse problem is computers are also getting better are creating human-looking mess in the real world.
btbuildem 3y ago
It's an interesting read; I wonder how much of the failure to support users is a factor of the size of the organization itself, and how much is the scale of the user base. I think the other (ordinal) dimension to consider would be whether the users are also customers, or just part of the product. For meta, google, twitter et al, it's almost as if the users that fall through the cracks of the system are off-spec product pieces, where it's cheaper to get more instead of fixing existing issues. What I find fascinating (and this is anecdotal) is that large companies that have few big customers ALSO suck at support, despite having relatively large portion of their headcount assigned to Customer Support. I would tend to agree with the article's author, that as an org grows, it becomes less able to perform its core functions.

329 points by davidmckenna 3y ago

What all this says to me, in total, is that greater competition where you have a bunch of potentially medium sized companies or smaller but no clear massive (50%+ market share) leader that power can’t congregate means they have both incentive to provide a better experience and having multiple targets makes it harder on negative actors, effectively. Thats my takeaway here is that we should as a matter of regulation / spirit of market competition lean on incentivizing creating medium (mid?) size companies worth collective $100 billion+ than a few giant trillion dollar corporations, as it relates to majority software companies. I think with hardware it’s A bit different when it comes to economies of scale so I don’t know how that could break down and I don’t want to include that for the sake of argument but there could be something there too

pixl97 3y ago
Otherwise summed up as "Monocultures suck"
graemep 3y ago
That is true in any market, not just software. There is a large element of regulatory capture that shapes regulation to favour bigger businesses instead of reining them. Software and online services have been particularly bad because there are so many ways to work around regulation. Apple's current malicious compliance with the EU is an egregious one, but most are more subtle (FB persuading regulators to let them take over whatsapp by arguing chat and social media are different markets). Ideally, IMO, we should aim to prevent monopoly, not just abuse of monopoly (which is what regulators currently do): https://pietersz.co.uk/2009/11/fix-capitalism https://pietersz.co.uk/2009/11/fix-capitalism
Geisterde 3y ago
It is the general consensus that competition in the market place is good for consumers and propels business to find creative solutions that create value in the econony. I would say that isnt always the case, Rockefeller had something like 90% market share before litigation of antitrust began, by the time the case was adjucated their market share had already slipped; what this indicates is that even when one party holds 90% of market share (and probably total wealth for that matter), the market will eventually cut them down to size. At the same time, rockefeller was responsible for bringing a groundbreaking innovation to society. So, it was good that initially all that capital flowed to him, because he was using it to move society forward (at least in this regard), and it was also good to see that capital flow away on its own, because it was needed elsewhere. I would also point out that the centralization of companies into todays megacorps is influenced by many factors, economies of scale may be one, but so are intellectual property laws (we really dont need them!). In fact, I would venture a guess that most regulation is written by the companies that are being regulated, that keeps competition at bay, and they wont regulate themselves downwards in the food chain. Finally, I would say the centralization really took place during WWI/WW2, it was convenient for the government to shout orders at a whole 3 people to build tanks instead of automobiles; this centralization is a strategic goal of the united states government, and enacting it through secret deals (rather than law) is a preferable method to preserve state secrecy.
hyperpape 3y ago
Worth noting that by market cap, Twitter is 20-30x less valuable than Facebook.

roenxi 3y ago

> I started seeing a lot of comments claiming that you need scale to do moderation, anti-spam, anti-fraud, etc., around the time Zuckerberg, in response to Elizabeth Warren calling for the breakup of big tech companies, claimed that breaking up tech companies would make content moderation issues substantially worse Well Zuckerberg is correct in context. Politicians don't mean moderation as in everyone is being civil with each other or garbage results. That isn't a political issue. They mean things like supporting the local censorship regime which is usually country-specific. So from a political perspective, more centralisation is the only way to successfully implement moderation. Because moderation doesn't mean "behave to community standards" - it means "comply with politician's standards". Ie, moderating what people can say as part of their legal and political engagement with society. I recall when Australia had a suppression order about Cardinal Pell, high ranking official in the Catholic church who was convicted of various sex offences. And in fairness the case was a political football so the order was reasonable. It was eventually overturned but reputational damage was done because, unfortunately for the courts, there are too many foreign news organisations so the block failed miserably and it was major news in Australia without any official Australian news sources covering it. It would be relatively easy to enforce that sort of block if the major foreign distributors were just Facebook or YouTube. They'd probably cooperate with the Australian authorities on request.

richrichie 3y ago
This “cooperation” with the state is a huge problem though.
- roenxi 3y ago
  Not when talking to Elizabeth Warren. It wasn't that much later that all the Hunter Biden laptop thing happened and showcased what Zuck was getting at. In context it was a straightforward, informative and correct answer for this audience. They won't be able to moderate the debate if the internet is made up of smaller companies; the coordination is much easier with just a few majors.
graemep 3y ago
I think there is an ambiguity in what you said. TO be clear the conviction was overturned but the news had long been globally disseminated by then.

andy99 3y ago

The real "economy of scale" in these platforms is not actually providing any support , moderation, fraud prevention. It's not that they scale it better, it's just that they don't do it and get away with it through market power. If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. If I'm uber I just ignore it. It has nothing to do with efficiency, it's just getting the monopoly power to treat your customers badly and get away with it. Which, of course combined with the larger attack surface, is why bigger platforms do so much worse on spam/fraud/support.

MichaelZuo 3y ago
>If I provide Andy's small town taxi service and have a customer service issue, I deal with it personally and properly or I go out of business. In a very small town, you won't go out of business because you'll be the only taxi service in town. Everyone can establish their 'monopoly power' in a small enough area.
- alexey-salmin 3y ago
  Not really, because the entry barrier to create a small town taxi service is incomparably lower than creating a new Uber. 20 years ago my small town had around five fiercely-competing taxi services with cars arriving within 4-5 minutes of a phone call. In many respects that was better than the new times. Especially when it came to customer service.
  - cortesoft 3y ago
    How small a town are we talking about? I grew up in a 100,000 person city and we only had two taxi services that would take ages to arrive, depending on where you were.
    - alexey-salmin 3y ago
      Around 100k. It was in Russia though and owning a car wasn't as common as say in US. Public transport wasn't very pleasant to use either. It was an interesting case, a sort of a breakthrough in transportation habits achieved by loads of 15-years old right-hand-drive Toyotas converted into taxis. The cheapest ride was around $1 and people literally started riding taxis to the next building on the same street.

ec109685 3y ago

Amazon selling obviously fake SD cards / flash disks is baffling. It’s super easy to spot and fake disks cost users data, so you’d think they’d take that seriously. https://a.co/d/auXcxrZ https://a.co/d/auXcxrZ ($29 for 1TB as their “overall pick”)

MattGaiser 3y ago
I imagine they make a ton of it back from users who never need anywhere near that much space. I have the non-technical people of my life insist on a terabyte for everything. One of them bought an iPad Pro just to have a terabyte of space. After 8 years of their prior iPad, they had used up all the space (64gb I think) and wanted to be sure they wouldn’t run out.
- margalabargala 3y ago
  Depending on usage patterns this assumption might not hold. Improvements in cameras etc are causing the sizes of the photos and videos that people take to hugely increase in size. The prior ipad you spoke of might have only recorded 720p video, while the new Pro likely does at least 4k. If they use their ipad to record video of family events, that 1tb might represent the same usage as the old one.
- Nextgrid 3y ago
  Keep in mind that these scam devices rarely present themselves as a functional but lower-capacity version. It's more often the case that the device does present the advertised capacity, but with a massive "black hole" in the middle where any writes are silently discarded. Depending on your filesystem, you don't need to write much data at all before you're likely to hit this "black hole" and start losing data.
nonrandomstring 3y ago
Some work I supervised sampling Amazon and Ebay products for vendor malware showed an absolutely shocking prevalence of dodgy goods. I don't think they can stem the tide.

infogulch 3y ago

Way back in 2014 when Jeff Atwood (aka codinghorror) switched from Stack Overflow to creating Discourse, he gave a talk about it (see notes [1], sadly I can't find a live link to the recording anymore). He gave a pithy little explanation of why they built the Discourse trust levels system the way they did that stood out to me: > The only thing that scales with the community is the community. The point being, you have to grow users into moderators. Any other way of acquiring moderators is unsustainable. [1]: http://discourse.bridgefoundry.org/t/link-to-jeff-atwood-talk-about-discourse-as-a-platform/15 http://discourse.bridgefoundry.org/t/link-to-jeff-atwood-tal...

crummy 3y ago
I wonder how that would work for Facebook, for example. Facebook Groups have admins, but for general posts to the public (or to friends) - could they be user-moderated?
- infogulch 3y ago
  This strategy seems to be especially effective for focused communities as they grow from 50-5000 users. As you approach facebook scales and a more generalized audience ("the public") I'd imagine the optimal strategy may shift some. A federation (small "f") of smaller, more focused communities might be the best you can hope for.
  - a_bonobo 3y ago
    Has Facebook perhaps shifted towards a federation of communities? My Facebook feed as it used to be, general life updates by various friends, is pretty much dead. Nobody posts these things anymore. However, neighbourhood groups, Buy Nothing groups, and other local special interest groups thrive, I see several daily posts in each. Plus Facebook constantly recommends me more groups. This is a n=1 experience but I wonder whether Facebook is 'falling apart' into these groups.
    - aldonius 3y ago

Mphetbug 3y ago

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CityOfThrowaway 3y ago

The author seems to be mistaking the benefit of selection effects with competence. Those who work anti-fraud for platforms know that there is something like a market for fraud. There is a market clearing quantity of fraud that will be present on any platform, dictated by the gains from learning to execute the exploit, the effort necessary to do so, and the number of times one might be able to do it. Small platforms have way less fraud because they are way less valuable to exploit, in general. And that's caused by _the very fact that they are small_. The big platforms actually are radically more competent at anti-fraud / anti-spam / etc, but the scope of their operations make them such juicy targets that there is a lot of it anyways. It the entire world of fraudsters against Amazon, or Google, or Facebook. That's a highly unequal battle and it's surprising how well the platforms fare, all things considered.

alexey-salmin 3y ago
I don't see any mistake. > Small platforms have way less fraud because they are way less valuable to exploit, in general. Yes. > The big platforms actually are radically more competent at anti-fraud / anti-spam / etc, but the scope of their operations make them such juicy targets that there is a lot of it anyways. If their business model (scale above everything) results in shitty customer experience I don't really care how competent they are. They are fighting the problem they created themselves: a platform too valuable for scammers.
- 8note 3y ago
  > If their business model (scale above everything) results in shitty customer experience I don't really care how competent they are. It's a tradeoff. If your customer service is good such that more people shop there, there will be more fraud attempts overall. It's not that a platform is too valuable for scammers, it's that a platforms is valuable at all. All platform value is value for scammers, and the most useful platform will also have the most scammers on it
  - alexey-salmin 3y ago
    This is like saying that everything (including scam attempts) is proportional to the scale so the scale doesn't really matter. It's not true. Scale bring synergy and reduces costs. But it's a two-way road which works for scams too: scamming one big platform and fighting one anti-fraud system is ten times more cost-efficient than adjusting to ten smaller ones.

nonrandomstring 3y ago

There's a lot to unpack in this article, but the key idea is the "myth of big" and that small is beautiful. It should be no surprise that Big-Tech succeeds in part by creating its own powerful mythology. All giant organisations, nations states too, build myths of unique competence, infallibility, and exceptionalism. At the same time it hardly needs saying that scale brings inefficiency, corruption, sluggishness, and insensitivity. If it weren't for protectionist measures in place to sustain big monopolies they'd be torn asunder in real competitive conditions.

jseliger 3y ago
"the key idea is the "myth of big" and that small is beautiful" Based on a cmd-f, I don't see the words "myth" or "beautiful" in the article, and Luu writes: It's easy to name ways in which economies of scale benefit the user, but this doesn't mean that we should assume that economies of scale dominate diseconomies of scale in all areas. Although it's beyond the scope of this post, if we're going to talk about whether or not users are better off if companies are larger or smaller, we should look at what gets better when companies get bigger and what gets worse, not just assume that everything will get better just because some things get better (or vice versa).
- nonrandomstring 3y ago
  5 + 4 3 * 3 10 - 1 sqrt(81) I can't see the number 9 anywhere above. Can you find it?

rgmerk 3y ago

The claim that small platforms are better at moderation needs some nuance. In terms of content that is annoying or worse to the forum’s users, it’s probably broadly true. But it’s not necessarily true for content that the users of the forum are fine with, but society more broadly has issues with. Take for instance forums which are devoted to sharing “revenge porn”.

kmeisthax 3y ago

>By comparison, on lobste.rs, I've never seen a scam like this and Peter Bhat Harkins, the head mod says that they've never had one that he knows of. On Mastodon, I think I might've seen one once in my feed, replies, or mentions. I self-host Mastodon and my mentions are chock full of this one Japanese Discord cybercrime server[0]'s invites. This only started four days ago, but it's already making Mastodon almost as bad as Musk-era Xitter spam. The front-line tool for moderating federated spam is to block the instance that sent it. A year ago, most spam were rando servers following everyone they could think of. However, the Japanese Discord guys are almost slightly kinda smart: they started registering accounts on smaller (non-single-user) instances. Because Mastodon doesn't support any kind of account verification[1], any instance with open registration (i.e. "just sign up") is effectively an open relay for spammers. I don't consider this to be negating the post, but it is relevant context. [0] They advertise DDoS, hacking, and stolen credit card services, or at least that's what I was able to glean from the Japanese language advert they sent [1] This is why Google requires you to verify with an SMS code to do anything e-mail or YouTube related, for example - it lets them throttle how many registrations per year you can do with that number.

tareqak 3y ago

> In my social circles, many people have read James Scott's Seeing Like a State, which is subtitled How Certain Schemes to Improve the Human World Have Failed. A key concept from the book is "legibility", what a state can see, and how this distorts what states do. One could easily write a highly analogous book, Seeing like a Tech Company about what's illegible to companies that scale up, at least as companies are run today. A simple example of this is that, in many video games, including ones made by game studios that are part of a $3T company, it's easy to get someone suspended or banned by having a bunch of people report the account for bad behavior. What's legible to the game company is the rate of reports and what's not legible is the player's actual behavior (it could be legible, but the company chooses not to have enough people or skilled enough people examine actual behavior); and many people have reported similar bannings with social media companies. When it comes to things like anti-fraud systems, what's legible to the company tends to be fairly illegible to humans, even humans working on the anti-fraud systems themselves. I think legibility is one aspect of it, but I think another could very well be empathy. If you want to support a user who has a problem, then you have to want to help them and follow through. If you want to make a customer whole after they lost money on your platform, then you want to pay them back and follow through. If you want to stop your platform to be a tool used to disseminate hate, then you want that outcome and move heaven and earth to make it happen. You have to want to see the problems and you have to want to follow through and fix them.

andrewljohnson 3y ago

It’s not apples to apples… are the small/medium platforms really going to be lacking in fraud etc if there are no large platforms to target? The small sites only lack fraud because the large platforms draw the fire.

jseliger 3y ago

Well, I received a keychron keyboard a few days ago. I ordered a used K1 v5 (Keychron does small, infrequent production runs so it was out of stock everywhere). After some examination, I've received a v4. It's the previous gen mechanical switch instead of the current optical switch. Someone apparently peeled off the sticker with the model and serial number and one key stabilizer is broken from wear, which strongly implies someone bought a v5 and returned a v4 they already owned. Apparently this is a common scam on Amazon now This is a tangent, but I just looked at Keychron's website, and I don't know how someone is supposed to choose from all the models and options. And there seems not to be a "comparison" page on their site.

Nursie 3y ago
I bought one recently, a K8. I was also confused, I think I had to find a reddit thread explaining what the ranges were ... IIRC Q is the full-fat, fully programmable, hot-swappable top of the range. V is like Q but a bit more budget-friendly, may have plastic cases etc. K is their 'standard' range, some have hot-swappable switches, some don't, generally not programmable. C is budget K, wired only. But then there's various pro, max, god knows what variants. It's a ludicrously wide product range. All I can say for sure is I really like my K8.
pushcx 3y ago
They do have a comparison page, but it's hard to find, incomplete, and leaves out significant information: https://www.keychron.com/blogs/news/difference-among-keychron-keyboards https://www.keychron.com/blogs/news/difference-among-keychro... The KeyChron Discord has seen enough questions that it has many bot autoresponders to explain model differences. I thought the experience of selecting among the many very similar, poorly-named models was a frustrating slog, but it seems unlikely to change given that they sell out their production runs. As long as you happen to quote it, I forgot a key sentence in my story: I placed my order with the official Keychron store and it was fulfilled by Amazon.

andrewljohnson 3y ago

As a counterexample, there are and were plenty of bad actors on phpbb forums.

bawolff 3y ago

I largely agree, although i think the author misses on some of the examples. Reddit is not an example of being bad due to this affect, but an example of being good because of it. Reddit is not one huge platform but a combination of thousands of subreddits independently moderated. That is how reddit remains good, because small subreddits have small scale. Running your own email server isn't a counterexample, but is legit terrible because in essence you aren't moderating a small community, you are moderating the whole world, but just your view of it, since anyone can email anyone. That is the worst because it is the worst of both worlds - no budget from being big scale but still all the problems of being large scale.

nobut8 3y ago
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mjevans 3y ago
Worse, spammers are better at their 'professional job' (getting mail past other people's spam filters and inane preferences) than your tiny mail server or small group of employees who don't understand how to not look spammy. Like not having annoying email 'signatures' and other anti-patterns commonly found in corporations.
- Loughla 3y ago
  > Like not having annoying email 'signatures' What?
  - rashkov 3y ago
    I used to work IT helpdesk and once spent weeks trying to find out why my company’s emails were getting bounced all of the sudden. We had just switched to Microsoft’s hosted exchange (office 365) so we figured that must be it. I escalated the issue until I got some very technical folks on the phone, but all they could say was that everything looked 100% fine and that something we were sending was tripping the spam filters. I thought about it and realized we recently changed our email signatures to include a bit.ly shortened link. I guess spammers also use that to obfuscate their links so we were indeed sending out sketchy email

hislaziness 3y ago

From the fraudsters/spammers perspective large platforms provide the economies of scale.

roca 3y ago

I wonder if AI is going to change the equation here --- by making it much cheaper to run spam campaigns against thousands of different small forums.

add-sub-mul-div 3y ago
The data pollution is going to be vast.

washmyelbows 3y ago

I spent a good chunk of time at a small company trying to mitigate spam, it always felt like an uphill battle that google just did significantly better than I could. I'm not one to usually advocate outsourcing services that my department could provide, but it felt like the right call to outsource email so that it would be better for the users.

rossdavidh 3y ago

There are a lot of cases where smaller is better. This article, for example, is way too long (although basically on target).

graton 3y ago
Agreed. I wonder if anyone read the entire article. Firefox reader mode says 293–372 minutes to read the article. Which is 4 hours 53 minutes - 6 hours 12 minutes. Though I do think reader mode can overestimate by a lot. Still a 53,000+ word article is going to take a long time to read.

Animats 3y ago

This is easy to fix. Make Amazon responsible for warranting all sales on their platform. Amazon claims they are not the seller, some anonymous party running an ad on their platform is the seller. That was litigated in Pennsylvania, and when it got to the level that Amazon was looking at a major lose, Amazon settled to avoid a precedent. On the ad front, anyone who runs an ad for a third party should have to be able to produce the actual name and address of the advertiser on request, or accept responsibility for the contents of the ad. Businesses have no right to be anonymous. That is existing law in the EU and California. Fraud is a problem because the major platforms get a free pass on supporting it. Not because it's hard.

kurthr 3y ago
KYC or you're liable. Interesting solution. It's kinda amazing it's not already that way (since advertisers need to get paid). I guess it would make it harder to advertise, if you're not already big so that could hurt little guys, but so is scamming customers.
- lotsofpulp 3y ago
  KYC just incentivizes discrimination. Eventually ends up with innocent people not being able to get bank accounts or rent hotel rooms because they get associated with prior probabilities that do not necessarily apply to them, aka discrimination. Punishing scammers to dissuade and reduce the quantity of scammers is the government’s job and should not be laid on businesses, for a well functioning high trust society. If international jurisdictions are a problem, then the national government needs to provide an identify verification API for businesses so they know the customer they are dealing with is subject to the legal system of the country.
  - Nursie 3y ago
    This is nonsense. Businesses are not above the law and claiming that you are only a proxy or that what you do is too complex shouldn't get you out of having to follow those laws. We're talking KYC (or direct liability) for businesses here. There is nothing discriminatory about it.

nitwit005 3y ago

This is partly just economy of scale for the scammers. Every additional platform you target costs money, so naturally they tend to target Facebook, Google, and friends.

waynesonfire 3y ago

Its almost like if you have a diverse ecosystem its harder to spam everyone. When there is just the bug three, you only have to crack their algorithms to get spam everyone. Spam takes advantage of the same economies of scale and does it better. Seems like it works exactly opposite of how Zuckerberg describes it. Not surprised.

diebeforei485 3y ago

Larger platforms care more about protecting the platform, even at the cost of mistakenly banning users. They can afford to do this because they already have lots of users. Smaller platforms will not want to mistakenly ban users.

jonathanlydall 3y ago

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there were many mechanisms in place to spot fraudulent credit card transactions and cancel them before they actually billed the card holder, but there was no process for reporting the fraudsters to prevent them doing the same thing again tomorrow. This is probably the same strategy that every company does, because there is no practical action any company can do to try make fraudsters accountable and thus discourage them from simply trying again. So the problem of fraud is getting ever bigger and increasingly unmanageable and out of control. The problem is a non-trivial political one, governments need to create task forces to work to reduce the size of the fraud industry, perhaps by catching fraudsters and making them accountable. The problem is even harder than simple political will though, because it’s cross jurisdictional, meaning governments of different countries all need to work together on this. This may seem impossible at the moment, but I believe until it is achieved fraud is only going to get increasingly worse.

itake 3y ago
and the companies have no incentive to investigate fraud further once it has stopped, especially if they fraudsters are international.
palmfacehn 3y ago
From the article: >And if I ask who do I trust more, my local reputable electronics shop (Memory Express, B&H Photo, etc.), I trust my local reputable electronics shop more. Not only are they less likely to sell me a counterfeit than Best Buy, in the event that they do sell me a counterfeit, the service is likely to be better. An international, multi-government taskforce is one solution, potentially. Maybe not. For the problem presented at the top of the article, shopping locally seems like an easy win in comparison.
- nradov 3y ago

eightnoteight 3y ago

> "these systems have to be fully automated because no one could afford to operate manual systems at our scale", what's really being said is more along the lines of "we would not be able to generate as many billions a year in profit if we hired enough competent people to manually review cases our system should flag as ambiguous, so we settle for what we can get without compromising profits". well anything that comes out of any business has these intentions for sure, but statements could be like multi-dimensional vectors, they could be doing 2 things at once the ROI for fraud is low for a smaller platform and so it doesn't happen for smaller scale companies as much as it does for bigger scale. but given the interested party who is explicitly looking for the target cohort even the smaller platforms see the fraud so even if social media as whole were to split into multiple entities, the ROI would still make sense for fraudsters to continue the fraud. even if you have 1000s of entities, there would be a startup who can build a wrapper out of those 1000s of entities to make the fraud ROI possible. just like how there are businesses that offer scraping competitors

Anotheroneagain 3y ago

The problem here is that it's the scammer who experiences the economies of scale, but not the moderation. A big platform is worth a hundred thousand times more for the scammer than Mr 0.0001% but the cost of moderation is the same for both.

BrenBarn 3y ago

I think the post underestimates the scope of these problems. It touches on it briefly, but I've mostly come to believe that it is in general bad for companies to become extremely large. It's not just an issue of content moderation. One reason that the article does touch on is the detachment from support. Large companies no longer need to care about the individual consumer, so they stop doing so. A sort of corollary for this is the tendency for large companies to shift from "doing what they do" to protecting their market position. That means spending more time on non-core activities, and in some cases even trying to expand into totally unrelated markets (as seen with large conglomerates). It is only when we talk about "economics" in the sense of money-making for an individual company that "economies of scale" are a good thing. In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful. I think we should view economies of scale like the rampant growth of grass or weeds: they are natural phenomena, but that doesn't mean they're good, and in fact for most practical purposes they need to be actively opposed. It's natural for grass to grow, and if it doesn't, it may indicate a problem, but you should still cut the grass every so often. Likewise it is natural for companies to grow, but big companies should regularly be broken up simply because they have become big.

jakewins 3y ago
> In the sense of benefit to the overall economy, to the society in which that economy sits, or to humanity in general, virtually all economies of scale are actually harmful You had me until here. Economies of scale in commodities is the thing that makes it so we don’t have to do sustenance farming and everyone gets to have sewn clothes on :) There’s truth in both sides there - we want nail production to not be done by hand, but also real humans with power to change things to answer the phone when we call support.
- Anotheroneagain 3y ago
  I'm not sure about that though. Ready to wear clothing is obviously inferior to tailored clothes, and it's not clear to what extent it's actually cheaper, and how much it abuses cheap labor. There may be an optimal scale for everything, and you start losing once you exceed it.

slv77 3y ago

This author is essentially arguing that the security of his garden shed is equivalent to the security of most banks because statistically banks get robbed more often. Spammers and scammers have a fixed cost to initiate an attack and the potential return on investment is proportional to the user base. A platform below a certain size simply isn’t profitable to attack. It isn’t that small shops are going to be better at mitigating spammers and scammers as the article states, small shops just aren’t being attacked. If the arguments were true that there are diseconomies of scale there wouldn’t have ever been consolidation in email hosting. Email providers all use the same protocols so the incremental cost of attacking a small provider is zero. A small company hosting their own email will quickly see their customers flee for the big providers as they drown in spam. Scaling spam management was the primary driver that drove consolidation in email providers in the early 2000’s. This also drove consolidation in areas with similar economics such as e-commerce. The low cost of attacking a new player in the e-commerce space and the cost of scaling risk management drove a lot of the growth of PayPal and spawned the growth and consolidation of outsourced e-commerce fraud risk management. The economics are going to be true of any n-squared business model where the value is in the size of the network. I go to LinkedIn because it has the lowest scam rates but because most of the people I work with are there. While a wildly diverse ecosystem would be more resilient against fraud this is the internet, the biggest n-squared system of them all. It’s unlikely that the internet is going to devolve into small, diverse fiefdoms so the problem is here to stay.

bsder 3y ago

The issue is law. If a "ban" was considered "defamation" and you could take a FAANG to court and be awarded $1 Million in damages, suddenly FAANGs would be superb at avoiding false positive bans.

samatman 3y ago
There's a kernel of a good idea here, but banning someone from a platform isn't defamation by any reasonable interpretation.
- bsder 3y ago
  In what way are unwarranted bans not defamation? Anyone who used to see your account and watched it suddenly go away is under the impression that you "did something bad which got you banned". That is a public statement about your character. If you did NOT do something bad, that should be actionable.

nojvek 3y ago

I agree with some parts not all of them. His point of fraudulent Amazon SD cards makes sense but you could get fraudulent cards in other places too. Amazon has one of the best return policies and support. I once bought a portable AC from a small shop and they wouldn’t take it back even though it was quite noisy compared to what they had advertised. Large platforms e.g Google and Meta pride themselves that they have billions of users with very few engineers. The problem is Google thinks engineers should be isolated from users and support can be algorithmified. More often than not, it fails. I am all for smaller companies when it comes for human touch. However there is a case for economies of scale when a problem is simple and can be captured fully by an algorithm. E.g YouTube only really works because they have algos to detect what background music is attached to what video. Imagine if humans were doing it? They wouldn’t be consistent. The truth is that computers are slowly getting better at understanding the real messy world. And the reverse problem is computers are also getting better are creating human-looking mess in the real world.

btbuildem 3y ago

It's an interesting read; I wonder how much of the failure to support users is a factor of the size of the organization itself, and how much is the scale of the user base. I think the other (ordinal) dimension to consider would be whether the users are also customers, or just part of the product. For meta, google, twitter et al, it's almost as if the users that fall through the cracks of the system are off-spec product pieces, where it's cheaper to get more instead of fixing existing issues. What I find fascinating (and this is anecdotal) is that large companies that have few big customers ALSO suck at support, despite having relatively large portion of their headcount assigned to Customer Support. I would tend to agree with the article's author, that as an org grows, it becomes less able to perform its core functions.