The Warren Breakup Plan
Elizabeth Warren made news this weekend with her plan to breakup Google, Amazon, and Facebook (and also Apple).
Let me first say that I am sympathetic to Warren’s position. I particularly don’t like the way that Google, Apple, and Amazon use their market power in search and in their app stores to display their own products. The mobile app stores, in particular, have always seemed to me to be a constraint on innovation vs a contributor to it.
However, as you might imagine, I don’t love her proposal. I don’t think breaking up companies solves anything. And lots of rules on paper don’t either.
What we need is a competitive marketplace where new entrants have a chance to beat out old incumbents.
And I think we are on the cusp of that with crypto and the innovations in and around it.
This tweet exchange explains my high level view here:
we are on the cusp of a new architecture, based on a user's control of their own data, and monetized via protocol tokens, that will unseat all of these monopolies in time. the massive increase in ICO-based fundraising, largely outside of the US, is the counterweight to this.— Fred Wilson (@fredwilson) March 9, 2019
I also quite like Mike Masnick’s much longer take on Warren’s plan.
What we need are policies that make it easier for startups to raise capital (like supporting ICOs instead of clamping down on them) and policies that open up the proprietary data assets of the big incumbents (like giving users control of their own data assets). Those sorts of things along with the never ending march of technology will do the trick I think.
“The Department of Justice filed a federal antitrust lawsuit against Standard in 1909, contending that the company restrained trade through its preferential deals with railroads, its control of pipelines and by engaging in unfair practices like price-cutting to drive smaller competitors out of business.”There will sharp and mostly hostile reaction to her call. But, very little or any examination. FB will let you spend your tokens within the FB universe for the use of your data?
I’ve been paying close attention to this and a question for you Fred.Is there any candidate who has an educated perspective or is bringing in advice to close the knowledge and vision gap between our industry and our elected representatives in your opinion?
Maybe. I like the western state governors on the left. And anyone with the guts to run against Trump on the right
Ref currency exchanges I concur, noted this blog / newsletter supporting what IMO is currently best in breed : https://email.howardlindzon…
Lizzie’s sentiment is virtuous. You don’t have to love her proposal. It needs work, and you and your network can help her with that. She’s probably waiting for the call.She should be proposing reform of the SEC and DoJ, two institutions that seem to have been unwilling to act in the web tech space. Their recruitment needs looking at. The SEC seems to be stuffed full of officials coming from law firms servicing Silicon Valley’s corporate giants. Are they fifth columnists?
Out of curiosity, why do you call Elizabeth Warren “Lizzie?”
I call Elizabeth II Lizzie. Our leaders are no better than any of us, and this is how i indicate that they are just that. If it’s Tim Apple then it’s Donald Dick, but it’s not “Zuck”. I draw the line at that one.
Eric schmidt captured the Obama administration. It is his great and least appreciated achievement .
Yes, and well documented. His eminence grise, Eric Schmidt.https://qz.com/823922/eric-…
Try selling your Tweet to the American voter. My guess is that the knowledge gap amongst voters and our elected officials when it comes to technology is simply too great to expect legislation that takes into account the long-term view that you are espousing. The recent Kabuki theater that took place in Washington involving Zuck, Cook and others demonstrated just how little our elected officials understand technology, or care to understand it.
Sadly I agree with youIt may be very smart politicsBut also likely very bad policy
Although I believe that one of the best value propositions the blockchain has today, is to be an enabler for all these data decentralization-focused business models, I’m not sure that it is going to be enough to move users to these systems, away from the centralized incumbents, just because the data is decentralized or not owned by the operator.You can’t just say – we’re going to have a decentralized twitter, decentralized facebook, decentralized messaging, etc. just because it’s decentralized, and expect users to flock. The incentive must be stronger for users to care about moving. There is a psychology of change that is prevailing here, and it goes like this: People are risk-averse in the domain of gains, and they are risk-seeking in the domain of losses.So, unless there are more catastrophes in data loss, thefts, breaches, etc from the central players that lead to real financial and harm-type of losses for users, users won’t just move to these new systems so easily.And keep in mind that all of these central players will have more than one trick up their sleeves, and if the tide moves completely to decentralized data, they’ll become two-faced about it, just like Zuckerberg just did, and declare they are all for decentralized data as well.(we’re going to discuss this very topic actually in one of the Token Summit panels)
agree in general but think a model of the future where it will only change because catastrophes will happen is hardly ever a driver.its like a revolution fronted by savings rather than growth.markets don’t usually move that way.nor do people or i at least.
it’s human psychology. pain killer vs. vitamin.when in pain, you take the pill. when you’re not in pain, the vitamin is harder to justify. (for most people).
i just think of it differently is all.waiting for facebook to implode to make the world wake up and give a shit about privacy is not going to happen imo.building a natural blockchain application that is great and includes privacy protection without painful tradeoffs is the way to make privacy matter to the masses. i have no idea of why it is a good thing or good use of time to think about how to build a decentralized facebook.i think the winners will build something new, not something old done differently.
IMHO users will flock to niche social networks with a token-based business model because the token will be woven into the fabric of the community, like how virtual points have been used in games for decades, and like what fred alluded to in his karma post about his longing for a fred token that gave rights to comment, rights to moderate, etc. a federation of these niche social networks will emerge and that federated entity is what will disrupt fb, twitter, etc, because it will innately have a better governance structure (and thus better equipped to deal with all the censorship issues) and will have some component of data portability (as data will be sharded across members of the federation).
But of course venture capitalists are investing in points of centralisation in the new world of decentralisation (e.g Coinbase). Financial capital deployment still seeks a maximum return, and its controlled presence is distorting the development of decentralisation. I like ICOs, when they are transparent and when they are legitimate. Many are not. Hopefully that will change.
In addition to the loss aversion psychology, the massive network effects of your examples (FB, Twitter, messaging) compound the problem almost exponentially.I’m not even sure data/privacy catastrophes are enough for the genpop to really care about social apps and platforms.
“I don’t think breaking up companies solves anything.”I don’t have a position on Warren’s plan one way or the other, but this sentence struck me. 40 yrs on, would you say that the Bell breakup wasn’t ultimately a good thing?
Break up apple? Anyone proposing this idea is either a political fool or economic narcisisit.
It’s more simple to me. Anyone proposing breaking Apple is or plain stupid or being paid by its international competition. Aren’t Americans proud of Apple and other great american companies? Do South Koreans hate Samsung the same? This is bs.What worries me is that these politicians belong to the same political system that produced Trump, so anything is possible.
I think it just resulted in a bunch of smaller monopolies. I do not think it changed very much
At least smaller monopolies are limited in the amount of damage they can do. They aren’t global monopolies.
Let’s see: Bell Labs gave us the transistor, solid state laser lighting optical fibers, Unix, C/C++, and more. They gave the rights to the transistor to the public. At a royalty of a penny per transistor, what would a PC cost now? After the breakup, what have we gotten from Bell Labs?
Actually while the AT&T breakup was not perfect – and there was no follow through by enforcement – it did create a trillion in competitive companies (most of which when for arbitrage and squandered their opportunities). Carter phone and other court actions did provide for more competition. I have no idea how those examples would be applied to a data hoarder like FB or Goog.
I haven’t read her proposal yet, but think government’s first response to almost any issue should be to consider ways to dramatically increase transparency (costs little or nothing for all parties, limits opportunities for loopholes, keeps gov’t from creating onerous rules that warp the market and are often ineffective, etc.).In other words, is there a way to shine sunlight on information and activities that lets the market understand what’s happening and react in their own interests?
“…like supporting ICOs instead of clamping down on them.”Couldn’t agree more. So many negative opinions against them, but they are quite the innovation, even despite the downsides.
The lesson that we learned from Apple and others is that by reducing the variables in software and more tightly controlling the quality they can create a better user experience. In general I don’t worry about getting a virus on my iPhone or iPad. When I was a kid I made a lot of money removing malware from people’s computers. In many ways we like our benevolent technology overlords, as long as they are benevolent.I think there are three approaches we can take to this: regulate large tech companies like we regulate utilities and other monopolies, break them up, or leave them be. I tend towards more regulation. I would rather have the government say Apple can only take 10% of the App Store prices then saying they cannot have an App Store at all.
For anyone interested in how antitrust got the way it is in the US, the podcast Planet Money recently did an excellent three part segment on the topic.It would take a pretty massive change in how we apply antitrust in the US to break up these companies in particular.(I am not taking a position that we should or should not. I live under Apple’s thumb and quit Facebook over their policies. I don’t trust any of the four and yet… I find it ironic that the company I didn’t trust for most of my early years turns out to be the one I trust the most, Microsoft, to do what’s best for me. As a user I also trust Apple, but not as a purveyor of mobile software.)
Microsoft, of course, was found to have committed monopolization and ended up eventually having to change its ways. I wonder what things would be like now if they hadn’t been subjected to this corrective measure.
I am not convinced that the DoJ settlement (technically not found guilty as no judgement was made) made a difference. They stopped innovating for over a decade. Windows stalled by their own incompetence. Windows Mobile and IE were jokes.Microsoft is a completely different company now than they were then.
Maybe. But they did make changes in response as part of it, and imagine if their monopoly had only increased in size by the time they stopped innovating.
At a minimum Gates was done, that’s true. I’m sure that had a big impact in the company.We talked about this a lot at that time as we were doing mobile and a lot of stuff with Palm and MS worried us. At that time we believed that the company would have been a lot more dangerous broken up then not broken. I still think that is true.They wiffed on mobile and Balmer focused MS on sales, not innovation. To them “owning” the web was owning the browser and Google was already growing by that time. I’m not convinced it would have been drastically different. As a user, though, charging for their software, their interests were often aligned with mine, especially as a developer but also as a user, as much as they scared me as a developer.
In 1997 I wrote “to breakup the MSFT WinTel/processing monopoly one had to break up the last mile monopoly.” If anything govt compounded the problem with Brand X decision in 2004, which only concentrated the last mile and killed off the last vestiges of true competition from the 1980s-90s.It was, ironically, the iPhone, using a little appreciated 70 year-old regulated spectrum loop-hole (Part 15; aka shared spectrum or WiFi), that eviscerated the vertically integrated monopolies and drove the over-the-top application ecosystem and really scaled the cloud. That and brilliant Netflix scaling video choice and delivery to the edge.Market forces (supported by unintended government action) reduced MSFT’s dominance more than the consent decree. And now we have a group of monopolies, not just one, supported by inefficient net neutrality and local access regulations. Ah the irony!
What if you’re wrong about blockchain though, and it’s actually a total nothingburger? There’s lots of very smart people who think blockchain is a joke, so I think operating under the assumption that this technology that hasn’t proven itself is going to change everything seems a little naive.Also, I think you underestimate the power of the scale of these companies. Facebook is the default because everyone is on it, and it can muscle out other competitors. Instagram was probably the one shot at seriously challenging Facebook.
I have made the vast majority of my wealth betting against very smart people who think X is a joke. I plan to keep doing it with all of my energy for as long as I live
I asked my grandmother for career advice she said “2/20 and lots of luck vouldn’t hart” …
but enjoy your golden years while you’re at it.
My point is less about you being successful as a result of your convictions, which I’m all for. It’s more the idea that society should share in the burden of you being wrong when we have perfectly good remedies at our disposal already.I think of it like global warming though not nearly as dire. In 20 years we could develop technology that could make action we take today unnecessary. But I don’t think that possibility should encourage us to do nothing. Because the possibility exists that those technologies don’t pan out, and then we’re in even worse shape.
“There’s lots of very smart people who think blockchain is a joke”. Same happened during the early Internet years. Those “smart” people couldn’t see the potential of something new, because their thinking was stuck in old paradigms.
Simple question: who benefits when Google uses search power to cripple or destroy competitors to their other services?There’s no doubt that in the short run, consumers benefit from free apps that are subsidized by Google’s ad-driven search business. But those free apps, protected by their subsidy and by Google’s deliberate shaping of the ‘algorithm’ become stuck, because there’s no competition.Capitalism is the opposite of monopoly.
Ok, but a counter-argument would be that other companies could have emerged who also have the power to delight users, maybe even better than the incumbents who only have to do the minimum required.We’ll never know until we know.
“delight users” – more companies and their offerings that result in more delight would be delightful. at the moment the web feels a little bit… moribund. we need an explosion, the unleashing of creativity. People are creative, but the present conditions are killing that potential.It feels to me that the space has far too many technical developers and far too few authentically creative ‘spirits’. The balance is all wrong.
I agree that they fall toward two different ends of an economic spectrum, but I would view ‘state-run true monopolies’ as the opposite of capitalism. Although large companies can use their size to stymie competition (and innovation), I would argue that ‘near monopolies’ like Google (at least in search) must still introduce innovation or they wither and eventually die in the long-term. Of course, if they’re allowed to simply purchase any would-be competitor then that ‘long term’ turns into the very very long-term (when we’re all dead, as Keynes said). In my opinion, the FTC needs to be careful and diligent not to approve or allow every ‘Instragram by Facebook’-like acquisition…
> I would argue that ‘near monopolies’ like Google (at least in search)In search? IMHO, Bing is comparable.
“Capitalism is the opposite of monopoly.”I don’t think capitalism is the opposite of monopoly. The opposite of monopoly is perfect competition. I don’t observe perfect competition in capitalist economies.
More holes in his logic than Swiss cheese.
Pay the money or roll a double
.Capitalism is an economic system in which the hands on the levers of control are private as opposed to socialism wherein the hands on the levers are governmental.In capitalism, competition for customers within a free market declares who the winners are.In a socialist system, the government picks the winners.A monopoly is a business that controls the production and sale of some product or service such that it may exert pricing control on the market.A monopoly may come to exist because a single company creates such extensive execution advantage as to defeat all of its competitors fairly.A monopoly is only illegal if it manipulates the price of its good or service in such a way that the customer is unfairly victimized.The antidote to a monopoly is competition that presents the market and the customer with multiple sources of supply; or, a careful regulatory review of the costs of production, and the pricing of the product with an objective of ensuring the pricing is fair.Our system is set up in such a way that the Department of Justice has an Antitrust Division that oversees such anti-competitive matters.Capitalism is not the opposite of monopoly. A monopoly may be part of a capitalist market if it competes and wins against all competitors.Governments have a lawful police power to ensure markets are orderly and when they are not, they may enact and enforce laws such that the price of a good or service is fair.JLMwww.themusingsofthebigredca…
Both outcomes result in monopolies because of natural network effects. The real issue is which system addresses risk better. Networks reduce risks; not individuals. So the real question is, which is a better network that is both generative and sustainable?At the same time we measure outcomes along standard and pareto (power law) distributions. These tend to show relative, not absolute, change of the network or ecosystem(s). While we might posit that the last 30-40 years of more laissez-faire capitalism under neo-liberalism has resulted in great advancements, it has come at great cost; social (alienation, polarity), environmental (climate) and financial ($300 trillion of debt foisted on future generations). So we question its sustainability.Rather, as I say to Richard above, we need a new network system; namely equilibrism. The latter will ultimately result in healthier networked ecosystems that are both generative AND sustainable.
If you don’t like Google, then use Bing.
I use DDG, of course.but my point is that if Google doesn’t like you, there’s not a lot to be done, is there?
I’m trying to understand but not seeing a problem:You are talking not about ordinary users but about businesses trying to do search engine optimization (SEO)?You are saying that a company that wants to use Google’s services as a ad network will get rejected by Google over being a Republican in politics?
Wrong C-Monopolies are a necessary part of capitalism.The objective function is improving out standard of living via wealth creation.The problem is that the regulations haven’t been updated to account for the input costs and risks of innovation.Pharma – super high costsApp features – super low costs
Monopoly is a result of network effects, which underlie all socio-economic and political institutions. Capitalism and Communism are one and the same. What’s missing is equilibrating the geometric value captured at the core with the linear costs borne at the edge via a system of transfer settlements or payments incorporating incentives and disincentives. Nature has this force within and between systems.
Isn’t the most ‘efficient’ expression of capitalism the monopoly? If you read (or reread) Zero to One you will be reminded of this. Peter Thiel is a capitalist. He likes monopolies. He makes his greatest returns from them. They are bad for many others though. That’s the conflict.
I’m in the we drank too much cool-aid and protocols won’t solve a drop of the problems we thought they could. And even if they did monetisation via tokens is a non-starter.What makes this particularly interesting to me is not knowing whether my position is arrived at because of sufficient knowledge or insufficient knowledge.
I’m right there with you, on both counts
I think it’s just a matter of time before both work
Time can go on for a very long time.
And who knows, maybe a timeline can diverge into infinite possibilities – maybe if Fred wills it enough his version will happen, for him.
I agree tokens aren’t the solution. There’s no need for someone to ‘own’ their data in an immutable database (tied to a Pyramid-Ponzi scheme structure) to prevent companies from using it to monetize it, especially with the added energy cost and other pitfalls points like 50% + 1 attacks.
When and where is gov’t intervention appropriate? Everyone railed on the cable industry for decades as a legal monopoly, but you pretty much don’t hear that anymore. Why? OTT technology now provides a strong, competitive alternative to cable’s exclusivity. The NFL and MLB are legal monopolies, too. How are they best serving the public’s interest? Attending live sports is pretty much unaffordable for many families. Mediocre player performance yields multi-million dollar salaries and increasingly higher tix prices, all underwritten by fans who don’t have legit alternatives at their disposal. There’s already signs of fb experiencing a demographic shift that suggests the platform is losing luster, particularly among the young. Is their stranglehold sustainable, particular w/ a shift to privacy, which potentially can impede ad monetization and revenue? Should gov’t allow change to occur organically? If not, then when/where are regs warranted, if at all? Seems a bit like genetic engineering, rather than allowing things to evolve naturally. Gov’t should restrict and safeguard against anti-competitive behavior, but that can also be viewed as their defining (and capping) success. Slippery slope.
The answer is and always if does it fit Fred’s agenda and support his Fund. Don’t take my word for it – google the founder of social capital and listen some of his recent interviews.
I love that use case, and I’m a big proponent of decentralization, token-based governance models and everything they engender. But many of these companies and protocols will need to sharpen their value propositions and go-to-market strategies. That’s why I am bit tough on them.
Absolutely, problem is a lot of these companies are naturally run by devs and crypto enthusiasts. to cross the chasm we’re going to have to communicate with the end user in their own language, which probably dosn’t contains the terms immutable, consensus or cryptographic hash!It’s something my startup Is currently working through – Trouble is, after spending a number of years in this space, a crypto economic network becomes the most natural thing in the world!
Cool. What are you working on? Feel free to email me [email protected] .
Hi William – I have just sent a email detailing what i’m Working on 🙂
How can crypto change that when right now it is impossible to offer a digital good and pay with anything else that is not in app purchase?
Great question!!! Maybe that is what her policy proposal should address. As I said I think the app stores are an inhibitor to innovation
Yup I believe that is the better direction. Like what happened in EU about regulator limiting what Google could do to promote its own service on search results. But I am afraid Warren is not tech educated enough to get it and that her mental model is Microsoft/IE and old style monopolies break up
The odds of Elizabeth Warren being correct are between chief slim and chief none – and chief slim left the reservation some time ago.
.The Warren Plan is a total waste of words, sentences, and paragraphs. It means nothing. It will never become law. It is total nonsense as is her candidacy.It is based on a simple untruth — the US body of law on anti-trust and competition is actually quite good. It requires very little tinkering, if any.It is important to note that the Antitrust Division of DOJ pursues crimes, civil actions, merger opinions, and guidance.The Antitrust Div will review a merger or a business practice and issue an opinion as to what it means, if any laws are being violated. They will also provide guidance as to what might be done differently.It does require somebody to fashion a cogent complaint, and to make a sound argument. The arguments in the Warren Plan are untrue.I urge you to actually read about the Antitrust Division. You will be surprised.https://www.justice.gov/atr…Most of the discussion points being bandied around are “shit house lawyer” arguments. You have to know that Amazon, Microsoft, Apple, Google have battalions of internal lawyers and a phalanx of law firms looking at . . . everything.[MS moved their governmental affairs shop (lobbyists) to DC some years ago. They knew where the fight was going to be.]They are all quite chummy about this. Do you recall the hiring controversy when these sterling citizens colluded to control hiring practices and compensation in SV?Much of what is being discussed today is simply the result of competition and the passage of time. Apple is Apple because Jobs and the Woz figured something out. Others figured out how to make it. Others figuered out how to market it. They competed and won. Plus, almost three decades went by.In their winning, they accumulated gobs of market strength and marketshare. That is what happens when you win and win and win.They were the scrappy disruptors of their time and they won. What folks are complaining about now is primarily being late to the party and getting their asses handed to them in a competitive field.VCs are notorious for wanting the government to reshuffle the deck and to change the identifications of the winners.I like Duck Duck Go and when it was revealed it did not save search results, it had a great run up in market share based on customer paranoia about privacy.It does not, however, do anythng better than that other search company — Google. Neither does Google particularly worry about DDG because Google owns search.That is why winning looks like. Sometimes running the moon is the actual result of a unique vision, a superior plan, better execution, lucky timing, and better funding.Business isn’t T ball. Everybody doesn’t get a trophy.I think just about everything related to those complaining about the big guys is within the purview of the DOJ Antitrust Div and that the current body of laws is more than adequate to ensure fair competition.Somebody has to write a complaint, file it, and get it in front of the DOJ and, ultimately, a court.If VCs want to back companies who are disruptors, they can’t expect to partner up with the DOJ.JLMwww.themusingsofthebigredca…
Please run for President.
.Are you a Russian? Preferably with close relationship with Vladimir Putin? Call me.[Yes, I “dated” some porn stars when I was younger, but I wasn’t married then.]JLMwww.themusingsofthebigredca…
He’s far too pragmatic and logical to ever get elected
.My #1 son, former Ibanker, just launched a political consulting firm in Charlotte. They run local, state, Federal campaigns.I may have to run to use the family discount.JLMwww.themusingsofthebigredca…
Best reason ever. Junior Senator from North Carolina?
A keeper. If some BIG BOY starts to crush my startup, I know there is a body of law and a group at the DOJ that might help me. I didn’t know that. Now I do. Read, saved, abstracted, indexed. Thanks.Poor, poor, Lizzie? Can’t we send her something nice to make her feel a little better as she and her wack-o nonsense go down in defeat? She looks sweet and grandmotherly when she is sitting down, elbows in, knees and feet together, tailored suit, hands folded in her lap or holding a nice casserole or chocolate fudge layer cake, saying nothing, and smiling. We DO want to keep her smiling!I’d listen to her if she weren’t wack-o, but as it is ….
The Warren Plan is a total waste of words, sentences, and paragraphsRemove “Warren Plan” and insert any current leftist or alt right political agenda and the sentence still makes sense.Except for the reality that the modern political climate isn’t about making sense. It’s about identity politics and coming up with a narrative that gets people fired up.Emotions > Substance
.I got an earful of Dem politics this weekend at SXSW. I live in the ATX.It is hard for me to believe that I still live in the US after listening to AOC and some of her fellow travelers.She grossly outdrew the 2020 Presidential candidates.I, honestly, wonder if she is all there. She critiqued FDR — a loser in her book — without mentioning the Great Depression or WWII.JLMwww.themusingsofthebigredca…
I wonder how much of this is strategic desensitization to extreme ideas.It’s a strategy that has worked well throughout history.
.No question the “big crazy” bar has been moved multiple times since the 2016 Bernie Sanders campaign.The world has been de-sensitized since we have had videos of beheadings, and immolations. That will do it every time.The entire Dem 2020 campaign is a sprint to the left to see who can say the craziest thing.Conversely, I am also impressed at how many people have already stopped listening and are ready to vote.JLMwww.themusingsofthebigredca…
Anti trust laws were written with the customer in mind (primary goal being to prevent customers from getting hurt by high prices or rents), but have not kept up with the times.They do not do enough to ensure that customer data is protected and that customers have adequate choices for their core jobs to be done. In the modern age, these include virtual jobs and apps like search, messaging, ridesharing, etc.Thus when Facebook acquires IG + whatsapp, it limits customer choice. Why? a) Customer data is locked up and they cannot take it with them to another provider. b) Because of network effects, it is hard for another Instagram or Whatsapp to form and build their user base to a critical threshold.We need anti-trust to evolve to include notions of customer data privacy, unbounding customer data so that it not locked, and be more cognizant of aggregators who suck up all users through network effects creating monopolies by default. These monopolies operate multi-sided marketplaces where they do not charge users any $, but extract rent through sweeping up their personal data. And of course, they over-charge marketers and fleece publishers.
My memory of the late ’90’s was that we thought the internet, itself, was going to do the same thing. I think blockchain, crypto and decentralization are fabulous. But I don’t believe they, alone (or even to a large degree), can fix this.Capitalism and the market, as cool and important as they are, don’t have a great track record on their own of preventing world-dominating behemoths from forming. And this time they formed pretty quick.We need regulatory caps on how big these entities can get. Otherwise, they become defacto governments of digital states that span the globe.I don’t know how much of Warren’s breakup plan is necessary, but some version of it is needed. And, we need to put regulations *back* in place that prevent the legal fiction known as a corporation from getting too big. There’s never been a clearer case for this than Facebook, Google and Amazon.A sane balanced approach of free market and regulation is needed here. It’s not socialism, it’s nothing new, and it’s a proven model.
It did. Until it didn’t. Things happen in waves. Time for the next one
“world-dominating behemoths”: Don’t like Amazon? Shop at Wal-Mart/Sam’s, etc. LOTS of vendors have their own Web sites where can buy. Don’t like Facebook? Don’t use it. I make nearly no use of it. Don’t like Google? Just as a keyword search engine, as far as I can tell, Bing is just as good. A good copy of Google was not very difficult — they have next to nothing in important secret sauce. Don’t like Linkedin? I thought that it was my giving away a huge fraction of my privacy just to make some money for the owners and got OFF Linkedin.What’s the problem?
Warren’s swipe at Bing is silly. It is quite good and I use it all day
It’s true that if any single individual does not like a particular service (e.g. Facebook), they can choose not to use it. That does NOT equate to the service still not having large influence over your life. For example, if Facebook decided it didn’t like a particular issue, it can choose to influence and control how an entire society views that issue from millions of other member’s newsfeeds. That will still affect your life even if you decide to not use the service itself. There is societal control and individual control and they are two separate issues.
Yes, but I was implying, suggesting, etc. that as individuals didn’t like Facebook’s influences on politics, government, the economy, culture, whatever they could quit using Facebook, and, then, with a LOT of such individuals, both the business success and the influence of Facebook would shrink. That is, in effect, each individual gets a vote on Facebook, and in a very democratic way with a lot of such votes any problems with Facebook will be solved.I’m not defending Facebook: I don’t like it and make almost no use of it and do not use my real name.But there is some irony: Why would democratically elected politicians use the power of government to throttle Facebook when clearly a lot of voters who want such changes in Facebook, even well short of a majority, if they do exist, can do that already — just don’t use Facebook? Zuck would see even 1% drop in usage right away. A 1/3rd drop in usage, way short of a majority, would get Zuck, the C-suite, the BoD, the big stockholders, etc. all up on their hind legs.Besides, I question the claimed influence of Facebook to throttle right wing content: On Facebook I follow just one person, and they post several times a day. Their posts are far over on the right, far right of Trump and me, and I see no evidence of their being throttled. A few times a year I respond, and my last one was strongly for The Wall, really bitter about Pelosi, e.g., she looks like BFF of El Chapo, and the post didn’t get throttled, blocked, deleted, lost, etc.I believe we really DO have some really important issues in the US, e.g., The Wall and related topics on immigration, how to get, keep, the economy GROWING, how to handle the challenges in balance of trade and national security, how to get work in worker training and infrastructure going, how to get going on 5G, how to retire Nasty Nancy and her attempts to hurt the US as much as possible, blame it on Trump, and take the power she so desperately wants.For Zuck? Personally I see nothing wrong for me and nothing for our country that can’t easily be solved: If very many people don’t like Facebook, they need only stop using it and Zuck will in effect crawl on his knees to get the users back.
In the case of Facebook, people individually continue to use it because it keeps them connected with their family and friends. However, Facebook on society at large can potentially be very harmful. What’s in the best interest of individuals and of society at large are not the same in this case.I’m not saying I agree with Elizabeth Warren’s solution or that Zuck is doing evil things. Most people actually don’t really know what Facebook’s algorithm is doing. However, it has the potential to do evil things (cause riots that kill people or influence elections, etc) while many people will still continue to use it for their own self interest (staying connected). I think the overall concern is that companies should be able to wield this kind of power.
> However, Facebook on society at large can potentially be very harmful.You’ve got me; you are way ahead of me; I don’t see it:With my meager usage of Facebook, I don’t see any opportunity for Zuck to do anything “harmful”. What is it he could, does, do? He runs some biased, lying political ads?Maybe there are some parts of Facebook I don’t know about? Zuck runs some pages with biased news?To get caught up a little, I just went to my Facebook page, for the first time in months. I saw about 2 dozen posts of the one guy I follow and some long list of ‘friend suggestions’ from which I did try weakly to use a few times but never got a ‘friend’ that way!I saw no ads at all. I saw nothing harmful or any likely source of anything harmful.Granted, I’m a baby in diapers Facebook user and mostly don’t even know how to use the thingy,but in that visit I saw nothing wrong.Yes. some years ago a friend kept telling me over and over, wouldn’t stop, that I should get and watch the DVD The Social Network. Okay, I did. Zuck was a nerd! But the useless royal he met in England was just as bad. Those two were so bad they made even me look socially polished, and that’s tough to do!But, did Aaron Sorkin write that movie? My reading of Sorkin is that he converts fact into fiction.But in that movie I saw no risk of Zuck doing anything harmful to society.Yesterday I did read an article about small town newspapers closing and one guy running his own small town newspaper — he grabs news in ways common in small towns and then publishes just on his Facebook page. I have to suspect that he is pretty harmless.Okay, if he were as totally upchuck sickening as that grand source of bubbling, fuming, flaming, glowing in the dark, reeking, sticky, black and yellow, toxic world leading class of effluent the NYT and its running dogs, lackeys, fellow travelers, dupes, and convenient idiots ABC, CBS, CNN, MSNBC, NBC, WaPo, etc. cheer leading squad for AOC, Fauxcahontas, Bernie, Kamala, Nancy/Chucky, various pro-Hitler, anti-Semites, pro-ISIS, pro-Lenin (tough to be both a Nazi and a Communist, but the NYT tries hard!), etc. — sorry, I’m in a good mood and trying to be generous and gentle — then, sure, harmful. But a Superfund Toxic Waste site is also plenty bad, not nearly as much as the NYT, but people can avoid both of them! I avoid both of them.Where the risk of harm? I can see screaming about the King of Fake, the NYT and their inconvenient lies about global warming, but Zuck?What the heck did Zuck do?
@Fred: RE: “we are on the cusp of a new architecture, based on a user’s control of their own data, and monetized via protocol tokens, that will unseat all of these monopolies in time. the massive increase in ICO-based fundraising, largely outside of the US, is the counterweight to this.”I think the current state of p2p protocols are *almost* correct where users control their data. Data continually needs to be structured and labeled (so that is valuable) while new data needs to keep coming in. If you gave a user their data feed, realistically, it’s not worth much and they wouldn’t know what to do with it. We need developers to facilitate a market for data while having the optionality to pay their users for it when third parties want to access it.I do believe the next platform shift in technology will be through tokenized and open data.Historically, technology has evolved from closed to open, back to closed, and then back to being open. We’re now in a closed phase where centralized apps and services own and control a vast majority of the access to data. We believe decentralized, p2p databases — public blockchains — will open up and tokenize data in a disruptive way that will change the flow of how value is captured and created on the internet.Q: If data is an asset, can it be tokenized and then decentralized into a public blockchain?A: Yes.At Storecoin, we believe that the future of every meaningful piece of data in the world will be represented by a private key. When third parties like Google want to access, crawl, or query the data, they’ll pay the token representing the data (a datacoin) back to the miners securing and storing it. Also, to the developers who acquire, structure, and label the data so that it’s valuable to third parties — especially machine learning and AI-driven organizations. App developers can then optionally (and finally) pay users for their own data.The STORE zero-fee, p2p cloud computing platform can set data on the internet free, reduce the control that data monopolies have on innovation, and usher in a new era of computing through tokenized data.https://twitter.com/chrisam…
The solution is much, MUCH simpler: As I outlined near the end of my post here a few minutes ago, just have the Web browsers just STOP sending data that can be used to compromise user privacy. Simple. Done. E.g., back in the days of movies in theaters, could just buy a ticket and see the movie, say, a romantic comedy, without getting ads for more romantic comedy movies. Could go into a store and buy work boots that looked like combat boots without getting ads for guns, telescopic sights, hunting bows, and survival gear. Etc.It’s simple: People just don’t give away their identity. If necessary, get a new DHCP IP address each 24 hours. Stop finger printing by having Web browser quit sending so much data in the HTTP agent strings. Simple. Dirt simple. No crypto needed.Crypto, still a solution looking, straining, begging for a problem it can solve.Recipe for rabbit stew: First catch a rabbit. Recipe for applied technology: First get an application. Recipe for pure research: Find astounding, fundamental truths. For the technology for applications, build on the best results of pure research. Understand now?
As long as users will trade self-expression for their data; they’ll give away their identity.
sorry if I’m being dense but what does blockchain have to do with any of the traditional anticompetitive concerns Warren raises? unless I misread her screed, she is not railing against data privacy (which is, separately, a huge issue) or the inability of startups to raise capital but rather good ol’ fashioned leveraging your current monopoly to create a new one. the whole exercise draws an analogy from Microsoft’s missteps with Windows/Office/IE.the irony of course is that she does not hold accountable the obama administration for completely looking the other way on GOOG/Doubleclick etc. thanks to Eric Schmidt’s expert maneuvering (without whom Google would be a much smaller and less influential company – kudos to Larry/Sergei for figuring out they needed someone who could work the politics). not that the trump administration is any better.
.It is always interesting to see how liberals/Dems react to things that touch their lives directly — the “whose ox is being gored here” theory of politics.The Dems in NY blew it on the Amazon deal, in part because they did not circle the wagons around the deal and pay off all the dissidents before the deal was announced.There is some delicious irony that it was Princess Alexandria of the House of Ocasio-Cortez who threw the overalls in Mrs. Murphy’s chowder.Amazon, in a debutante “zit on my nose on my big night” hissy fit, took its ball and went home triggering a pathetic outpouring of liberal angst by NY because they lost the deal.Amazon is famously run by that bon vivant liberal Jeff Bezos.The l’Affaire Amazon was an internecine slap fight amongst liberals, handled poorly in which everybody looks a little dopey.It is interesting that liberals like De Blasio and Cuomo had no problem with solidifying the Amazon monopoly with public funds when it served local economic development objectives, but today — in the person of Sen Warren — storm the ramparts to disembowel the same “monopolists.”For the record, I think the Amazon deal was a great deal for NYC. I would have done it in a NY minute.I thought it was pretty pathetic begging the Amazonians to reconsider with the NYT full pager.A lot of odd things get said in Presidential elections years and this one is no different. The Warren Plan is tripe and it sets up a spitball fight amngst the liberals that is fun to watch.BTW, the ultimate player in all of this is Eric Schmidt, who courted, dated, and seduced the Obama admin for its entire existence. In the process, the former software engineer made $11B reiterating the adage to follow the money.JLMwww.themusingsofthebigredca…
You are hilarious!
Total RIOT! Great summary insights and characterizations in just a few words. Lots of wildly fun “mixed metaphors” that English creative writing profs claim they don’t like!
Our Jeff is a multi-talented guy. Lawrence Brass said that to me a while ago, and after observing things, I realized he was right.
Ah, someone appreciates what ESs did @goog
Get very comfortable with George Stigler’s Nobel Prize winning research. Big companies use government to stifle competition. Warren wouldn’t be able to write a law or regulation that applied that wouldn’t hurt smaller upstarts. It’s impossible.Second, get very comfortable with Ronald Coase. His research can make people feel very very uncomfortable. It puts the onus on competition, property rights, and individual liberty rather than government.The invisible hand works if you let it. It might be messy and take time, but it works. Check out how many companies in the Fortune 500 from 1980 are still around. Under 50. Creative destruction should be embraced and competition in all its forms is pretty darn good.
“Big companies use government to stifle competition.”Corporate networks control institutions of government, setting policy and regulation. It’s so very obviously that way.
all the name calling is strengthening your arguments
Good follow-up blog post title: “The GAFA Kill Zone” (from the Twitter thread)
I absolutely think that Amazon needs to be broken up, but I really dislike the way Warren proposes doing it. Amazon may control ‘only’ 50% of all internet commerce, but they control the best 50%. Ebay and craigslist are for used goods, and there is no other marketplace for new goods that comes even close to what Amazon is.If Amazon blacklists a product, it’s basically a death sentence for that company, unless they are apple or someone huge.Amazon arbitrarily blacklists products all the time without any explanation. Their guidelines are incredibly vague.Also, having sold products on Amazon, they give huge advantages to their FBA program (fulfilled by Amazon). Basically the only way to be listed as Amazon Prime is using them as your distributor. Guess what, they take a nice cut of your profit for that too.Most concerning to me is that they have begun black listing conservative leaning books that cracked their top 100 chart (for books). That was an eye opener.If I were to break them up, I would do it ATT style, break them up into Amazon East / West or into smaller marketplaces that would compete against each other.I don’t think crypto currency will do anything against the Amazon monopoly anytime soon because they trade in hard goods.Facebook, Google, and other information databases may get disrupted, but Amazon needs an old fashioned anti-trust brought against them.
Look, Amazon gets all of my business not because I don’t have any other choices. It is because they are the best and have improved my life for the better. They control what they do because they are better. It’s called winning. We can all buy our shit from other vendors if we want too.
Actually you can’t. If Amazon delists a product, you’ll never find it.I’m cool with winners taking the spoils.But Amazon has power beyond that which extends to censorship.An author whom I follow published a book with conservative leanings. I won’t say which one, bc I don’t want to start a food fight on this blog over the viewpoints in that book.Over the opening weekend, it rose the ranks of books until it cracked 1000, as in the best selling book list.Amazon freaked out, delisted roughly half of the author’s books, including the one that rose to the top. It was the number 1 best selling book for it’s particular category.The author showed screenshots and fairly detailed emails he had with Amazon staff on his YouTube channel. Amazon basically refused to tell him why they delisted him.Essentially, they delisted his books because his viewpoints were staunchly conservative AND he was attracting a large audience. The liberal leaning directors and mid managers couldn’t stand for their platform being used to spread his views even though he didn’t violate any policies.After they delisted him, he basically had no platform he could sell hard copy books through. Sure, there were much tinier outlets, but the size and reach of his audience changed dramatically — for no reason. Or rather for having a viewpoint that differs from Amazon.That’s a dangerous amount of power they have in my opinion.
I here you, that sounds like a shitty deal. But even in smaller pieces, you can’t get rid of human nature: tribalism and bias.I live 15 minutes from Apple, Facebook and Google. The whole area is a gigantic echo chamber of liberalism. To watch the local news report on politics, it is stunning to see the level of bias. And I almost don’t even think that they realize it. It’s their reality. Trump could sprout wings, start resurrecting the dead and it would be spun as Russian collusion.Throw in all of the censoring of Google and facebook, not to mention the entire media joining the party, it was impossible for Trump to win. But he did anyway.Your friend’s book and message will get out there one way or another. Breaking up the biggies though probably won’t do much good. The invisible hand of the marketplace wins most of the time.
These words recently jumped out at me while reading an article about how technology-enabled changes in agriculture are making good food more accessible.Agriculture is an example of how markets, free inquiry, and competitive capitalism, and the innovations they generate, can transform the way we live and in so doing address and resolve acute social and environmental problems and challenges.The takeaway is that free markets lead to good.https://www.aier.org/articl…
Who would actually implement this plan since Warren’s chances of being elected are almost nil?
Standard Oil breakup was a Supreme Court decision, 1911. It originated out of the DOJ after a multi year study. These are ideas to be considered and examined not final plans.
I have been thinking for years that B2B adoption of protocol tokens will drive usage into the mainstream which means industries will throw their weight into making ICO martkets legal in the U.S..I would like to know which industries on Capital Hill besides the tech sector is currently lobbying for legalizing ICO markets? I would guess it is the financial services industry.
Americans turning on incredible American companies is funny, perplexing, and kind of frightening all at the same time. Enjoy these successes while they are in your back yard. And welcome wealth generating companies like Amazon when they come knocking.Two cents from South Africa, where formal unemployment sits at a healthy ~27%
The FANGA monopoly/oligopoly, just like the original MSFT monopoly, is a result of inefficient market structures resulting from inefficient regulation. I don’t think it’s a question of centralized vs decentralized. Elsewhere in these comments I talk about the (unintended) impact on government regulation and also how networks need to equilibrate core and edge (and top and bottom) to be both generative and sustainable. Not sure anyone in crypto land is adequately addressing the latter east-west and north-south flows in the informational stack to remedy the above market imbalances.
Why is no one talking about AT&T? We have an example of a horizontal breakup that opened up a market and brought us mobile phones, unlimited calling, and broadband internet.The flaw in Warren’s proposal is the fixation on de-bundling services. What if instead we force Google to split vertically into five Googlettes? Each gets a copy of the Google software repository. Each gets a fifth of the Google cloud. Each competes on search, maps, ads, mail, and Android.Maybe winner will again take all and one Google will eventually rule them all. But more likely we’ll have decades of real competition as they compete tooth and nail for our attention and business.Same with Facebook. Everyone’s account is randomly assigned to one of five Facebooklets, and five Instagramlets and what WhatsApplets. The chaos will force the Facebooklets to create an API to share updates, but the ads will be split five ways as will the customer profiling. No one Facebook will know 2 billion people. No one Facebook will have the power of today’s Facebook. And if one Facebook rules them all in 2030, we break it up again.The problem with monopolies is that we let them exist. We created the anti-trust laws to break up monopolies that caused pricing issues. We should amend those laws to deal with privacy and other conflicts of interest that make us uncomfortable with the big tech companies.And remeber, everyone who owned AT&T the day before the breakup is financially much better off now, as was John Rockefeller the year after they broke up Standard Oil.