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No Mercy No Malice

Dawg on the Wall

July 31, 2020

7-min read

Since the age of five I’ve enjoyed peeing outdoors. Forty years later, peeing has become something I must do several dozen times a day, and I don’t like the outdoors. But life mimics math, and the product of two negatives is a positive. More math: grilled cheese or tomato soup as individuals I find boring. But together, they’re my favorite thing at the Crosby Hotel bar. God, I miss eating at bars alone, with strangers around me. 

I’m staying alone in Montauk at a friend’s house while he’s in Portugal (something about taxes and quality of life). After my morning coffee and power shake, it’s time to water the plants. Look, it’s a bayberry plant, and there’s a crape myrtle. I hear something and startle. I just came from Montana, where everyone tells you to be mindful of bears. My fear escalates to DEFCON 2 when I see not a bear but five men standing in the backyard witnessing my divertissement. Four of them are wearing cargo shorts and could be quadruplets. The fifth is in a suit. The only guy that wears a suit on 92-degree Saturday morning is a real estate broker. Now I remember, the broker is showing the house this morning. 

They act like my Vizsla when she’s done something wrong: freeze in their tracks and avoid eye contact. Who would blame them.

The smartest and most noble people in the world — according to the IRS, DC, and CNBC are really, really rich people who made their money in tech. The Jesus Christs of our generation. More than that … Innovators. So, taking my cues from our role models, I turn to the five men and say:

“We live in a great country. I was raised by a single mother who lived and died a secretary.”

This week, the CEOs of the largest tech firms were all under consensual hallucination that an emotional opening statement absolves you of monopoly abuse. Bezos must have thought he was being filmed for his A&E biography. Pregnant teen mom, immigrant father, we get it, you were once poor. 

Jesus (i.e., Elon), make them stop.

Pattern Recognition: He’s Brown, He Must Be Un-American

Struck me right away that the GOP seemed to be more prone to questions about a lack of patriotism when questioning the one brown guy, Pichai. The word American popped up 15 times in questions to Sundar Pichai, a US citizen born in Madurai, India. To Zuckerberg, whose platform has wreaked considerable damage on American elections, American politics, and American news, the word was only used nine times. Representatives on the panel felt the need to remind the witness what country we live in just once when questioning the guys born in Albuquerque, NM, and Mobile, AL. 

Visible in His Absence

For the first two hours the witness who was subjected to the toughest grilling was … Jack Dorsey. Of course, Mr. Dorsey wasn’t there. Any problem regarding the rage machine that is Twitter has nothing to do with antitrust. Forcing the microblogging platform to divest Kanye’s account, and let it trade on the NASDAQ, doesn’t make much sense.

Or does it?

Many of the GOP panelists came to the wrong hearing. Twitter is worth $29 billion; the others are worth an average $1.23 trillion. I know, market cap isn’t a signal of monopoly behavior that warrants antitrust. But here’s the thing … it is. To be fair, if Jack had testified, we’d only really understand the respective scale of the problem if Jack were 2 inches tall and weighed 4 pounds. Pretty sure the last sentence is a hate crime. 

Sisters Doing It for Themselves 

Rep. Jayapal stood out as the most effective examiner on the committee. Her questioning of Bezos around third-party seller data was pointed and effective, as well as her grilling Zuckerberg over copying apps. Politicians are sometimes overmatched in these hearings, but Rep. Jayapal demonstrated she was more than talented enough to have been in the opposite seat, testifying in front of Congress about the anticompetitive practices of her firm — but instead decided to serve her country. 

The Samurais of the world’s greatest deliberative bodies increasingly have one thing in common: pantsuits. Reps Jayapal, Porter, Ocasio-Cortez and Senator Warren have created a super-featherweight class whose fists of preparation and faculty make Floyd Mayweather uneasy. They will likely play a central role in the breakup of the world’s most powerful firms. However, this pales in comparison to another contribution — there are likely millions of young women who watch them and think, “Why not me?”

Put Your Mask on, There Is No Conservative Bias

When they weren’t questioning Pichai’s patriotism, most of the Republicans on the committee spent their time complaining about alleged bias against conservatives, rather than addressing the actual subject of the hearing: antitrust. Were they just playing to the millions who watch Fox News? That’s half right. They are playing to one person who watches Fox News. It’s clear most Republicans still fear Trump and are desperate to please him. The persecution complex plays well, especially on Fox. 

There is no conservative bias on Facebook. There is a “bias” (open community guidelines) against spreading dangerous health information. It’s just that the two (conservative sources and misinformation) are often one and the same. But a “conservative bias” might as well mean, “the best place to get your conservative news, conservative opinion, and conservative conspiracy theories fed to you in a constant drip feed of enragement.” In May, a study found that most of the top news publishers by interactions lean right (as they have for years). The top ten political publishers with highest engagement are: Ben Shapiro, Breitbart, NowThis, The Hill, The Western Journal, The Young Turks, The Blaze, IJR, Washington Examiner, and CNN Politics. 

“I’d Like to Clarify My Comments”

Two “oops I f***ed up and told the truth, corrections coming”:

  • Rep. Jerry Nadler challenged Zuck based on emails from before the Instagram acquisition. In the emails Zuck acknowledges he wants to buy the company in order to neutralize Facebook’s competition. Nadler got much more than he could have hoped for. Zuck went on to acknowledge, even brag, that once Facebook bought Instagram, they crushed all of Instagram’s competition. Zuck’s answer made clear that Facebook’s market power is so great, they can terminate an entire market category simply by appending it to their business. When the committee’s report comes out, expect to see a recommendation that Facebook be required to spin Instagram, citing this answer and an assessment of how Facebook used its resources, network effects, and other powers to grow Instagram and push its competitors out of the market. Nadler knew a gift when he got one: “Mr. Zuckerberg, you’re making my point.” 
  • A few dozen lawyers in Seattle likely swallowed their tongues when Bezos fessed up to predatory pricing. Tim Wu, Columbia law professor, said this on this week’s Prof G Show: “The big policy question that comes out of this hearing is what do we do when the monopolist starts eating up all of their competitors on their platform? What happens when they run the platform but they invite you over for lunch and then have you for dinner?” 

Michael from Ronkonkoma

David Cicilline, chairman of the committee, claims he’s from the first district of RI. He’s not fooling us. He’s clearly from Ronkonkoma and he’s a Michael, not a David. Anyway, Chairman Cicilline comes across both very smart and as someone who, when you order a frozen mai tai from a lobster stand in Westhampton, would lean over and recommend an extra rum floater. And he’d be right.

Rep. Cicilline’s opening statement gave me hope: “This investigation has been bipartisan from the start. … As my colleague Congressman Ken Buck recently commented, and I quote, ‘This is the most bipartisan effort that I’ve been involved with in five and a half years of Congress.’” His rhetoric was also powerful: “Our founders did not bow before a king, and we should not bow before the emperors of the online economy.”

It’s not You, It’s Me (What’s Best for the Country)

We should also stop thinking of the breakup of big tech as punishment for doing something wrong, or that they’re bad people. We break companies up to restore competition to markets, which is the gangster app for a growing economy that demands better behavior. As a result, there are more options from other players who must then … behave better.

So, I’ve decided to run for the Democratic nomination to challenge Senator Rubio in 2022. I’ve already drafted my closing remarks for a similar upcoming Senate panel:

“Mr. Cook, you are an inspiration and reek of grace. Mr. Pichai, you are the best of America, an exceptional young immigrant who creates greatness in the agency of others. Mr. Bezos, you are just so damn rich, and even more jacked … we should roll. And Mr. Zuckerberg, you are an awful person, but a brilliant business mind. Your successes are nothing short of remarkable. It must be tremendously rewarding to know your grit, intellect, and vision took your firms to heights that made it difficult not to abuse your positions of power. Our separation of your assets will unlock tremendous value for tens, if not hundreds, of millions of people. Well done, and thank you.”

This may be (and I’ve said this before) the beginning of the end of big tech. However, it could also be a new beginning for the country, entrepreneurs, and markets. I find it all quite exciting. It makes me want to venture outside.

Life is so rich, 

P.S. Tim Wu, author of The Curse of Bigness, is my guest on the pod this week. “Can we really have one company selling everything in the whole country?” Take a listen.

59 comments

  1. James says:

    Scott – why did you choose this week to miss Pivot and an interview with David Cicilline? He is literally the person in charge of regulating the four companies you’ve been researching the past decade. The impact you could’ve made! Disappointing.

  2. Eduardo L says:

    Scott, Here listening to the latest Pivot Podcast, with Stephanie Ruhle (good person) and Kara. My take: Pivot, minus You = Irrelevant & Not Interesting. Come back! Stay well, Eduardo

  3. Bill Kerr says:

    I think of the manufacturing business I joined 25 years ago, clever products for industry but a tiny company and tiny market share. In my free time I tinkered with the one page website, expanding it. Meta tags, keywords, alt text. they were a thing. Finally bought a few ads on Yahoo, then AdWords. I started at $9/hr and retired on my 50s. The path I took may not be possible today. The giant voices overwhelm the digital marketplace. Private equity scoops up specialty suppliers, merging them for a synergy that never quite works out. This is all fine for me I suppose, but sucks for a younger me. I have thought about forming a new small company in a different specialty (trust me, by this autumn every restaurant will want viruses removed from their air) but the barriers are too high today and the copycats too numerous. It isn’t worth the risk.

  4. Richard says:

    In the case of Amazon, our US congressmen, the DOJ, the FTC, and any other federal government department or agency with an interest in fair trade, need to get familiar with the legal concept of estoppel. Estoppel is an internationally recognized concept with a basis in common law. Applied in the case of Amazon … it’s unlawful for a company (Amazon) to invite/encourage other companies (Amazon’s resellers) to enter a market (use Amazon’s platform) to grow their (Amazon’s) business only to then compete against those companies (Amazon’s resellers) to their detriment (resellers’ lost sales due to copycat Amazon products).)

  5. James J Nadeau says:

    🙂

  6. Santosh Shevade says:

    a great read all in all, this was thee high point-…However, this pales in comparison to another contribution — there are likely millions of young women who watch them and think, “Why not me?”

  7. John Logic says:

    I’m currently camping in Montana, riding motorcycles with 4 other dudes and processing my midlife crisis (59). Resisted turning on my phone when I got coverage, but happy I did and went straight to your newsletter. Thanks Scott – and think about Rubio! – Al Franken left a big hole that you could fill nicely.

  8. Sam Martin says:

    Well done! Thank you, Scott 🙏🏽

  9. Pee Diddy says:

    Peeing outside though, especially at night, is the greatest use of man time there is.

  10. Esteban says:

    Strong and clear!!!!

  11. Sheila S. Cameron says:

    Brilliant and insightful…Thank you!

  12. Jeremy McKeown says:

    It is a common misconception that Big Tech barons are James Bond villains that need to be vanquished. The assertion they all in their own way create amazing consumer value so therefore cannot be monopolists is just another view of the same misconception. There is no counter factual. If FB hadn’t been allowed to buy Instagram, consumer value could have been much higher, we just don’t know for sure. I think the Pinterest reference to their boycott tailwind in July, which led to a 35% increase in its value on Friday, is a good example of the unintended value that can be created by breaking up Big Tech. I would welcome the opportunity to own shares in AWS, YouTube, and WhatsApp alongside Pinterest in my portfolio.

  13. Yo Mama says:

    Scott, I think you’re quite wrong when you say there is no bias against conservatives on the social media platforms. Buy you’re right when you say that the Republicans shouldn’t have been fixating on that, and should have kept to the topic, which was monopoly power. The best way for conservatives to get fair treatment is for these giants to be broken up, so that they have to compete for everyone’s business, including that of conservatives.

  14. Telbisz van Dierendonck says:

    Not sure if you read these Scott (wouldn’t blame you if you delegated the task LOL) nonetheless, if you do, please contact me – I am very easy to find. It’s been over four decades since I have had the pleasure of being on Long Island, but anywhere along the coast is very healing. This is a good thing in your case! I shall leave it at that, other than to chime in that I am often personally inspired by your words, especially in regards to your upbringing, yet that is not the subject at hand: warning, I am an incorrigible mother hen. Only contact me if you are ready to listen with an open mind. Speaking of minds, mine has not had the pleasure of post secondary education – I used the excuse of my mother’s illness to drop out in grade 13 – a decision which cost me financially, but frankly, despite my genetic heritage – think Sorbonne – I would have totally suffered had I gotten into the legal trades. OK, now I’m rambling…. have a relaxing weekend Scott.

  15. Michael Storch says:

    Q/ When did you get so funny ?

  16. Lynn E says:

    The breakup is inevitable. The masters of the TECH universe should use their business chops to optimize their ROI or should we say ROP (Return of Power) by proactively executing the plan ahead of legislation.

  17. Barry White says:

    Ladies and gentlemen, the Dennis Miller of modern tech punditry: …as someone who, when you order a frozen mai tai from a lobster stand in Westhampton, would lean over and recommend an extra rum floater. And he’d be right

  18. Thomas Nylund says:

    Scott often makes the argument that if Google would be broken up and YouTube was spun off. That they would go in to the business of search…but wouldn’t that mean that Google shareholders, who still own the majority of the newly listed YouTube, would be competing with themselves?

  19. Rajeev Sunu says:

    Brilliant ! When would the unpaid data suppliers of the world get paid for such valuable supply to these platforms ?

  20. Papa Cheats says:

    Look at you, ending on an optimistic note.

  21. Mayank Singhi says:

    Loved this – > “Jesus (i.e., Elon), make them stop.”

  22. Colin says:

    Last thing I’ll say on this. No single lawmaker made an effective antitrust comment or question. Using third party seller data, diaper prices, even copying apps to go into destroy mood – those are COMPETITIVE behaviors, not anticompetitive behaviours. If Bezos and Lore had gotten together to fix diaper prices, that would be a problem. Using competitive data to sell similar products is EXACTLY why there is a Kirkland Brand at Costco. That is all win for consumers and is competitive behaviour. You don’t think Costco has data about what sells ?!?! You don’t think they make great knock off products at lower prices ? Why was that even a conversation. The whinging 3rd party bookseller who can’t compete ? “14 lives are at stake” ? It’s business. Those same committee members think health insurance is a place for competition but not books and diapers ? C’mon. If Zuckerberg had decided not to make competing products, ads would be more expensive. He could have just carved the pie up with Instagram – THAT is what the robber barons did. He didn’t do that – he competed! No asked about Apple’s walled ecosystem. Why can’t consumers have the choice of another App Store, Music Store or Video ecosystem without Apple always getting 30% ? No one asked. Dereliction of duty in that committee room. No one protecting the consumer.

  23. Pauly says:

    Loving the opening sentence

  24. Bill F says:

    From a US, growth oriented, democracy seeking, distributive fairness perspective this antitrust/breakup view makes sense. But what about the geopolitical perspective? The US competes with other countries in a global market where some actors seek to tie monopolies to the power of the state and pursue positions of global dominance. Where would AT&T be today in ICT if grown and not broken up? In a context of global monopoly why not encourage federal participation and even more integration to export US commercial and cultural power?

  25. Alyssa Wall says:

    I like your style and was wondering if I could share your page?

  26. Barry Green says:

    Grateful the platforms of the tech-dominant players still allow a trickle of critical thought, discourse and real-time data for me to fool myself into thinking I am objective;)

  27. Kyle says:

    > We break companies up to restore competition to markets, which is the gangster app for a growing economy that demands better behavior. As a result, there are more options from other players who must then … behave better.< Oh my, is that what happened when we broke up the airlines, communications etc etc?,

  28. Brian says:

    Nice Easter eggs. When I saw such tiny details on the first pic, knew I had to zoom in, and was not disappointed!

  29. Cecelia says:

    Gahhh… Brown man with power! Is that where our country is going? Better get a handle on that and call it patriotism. I too was alarmed at the anti-brown, excited by the female intelligence out front. I heard once that every other generation shares common attributes. (So if my grandmother was flat-chested so would I be.) But I haven’t seen a generation yet that fully embraces brown and embraces female. For these reasons, I would prefer you be the campaign manager for an awesome woman of color. Also…I know these stories of the humble beginnings of incredibly powerful people get a little tiresome. But I think the point is, they are people. (Btw, AOC did a good job of humanizing her situation last week.) And it would be really amazing if we could remember more the human realties, good and evil, drive outcomes. people are running companies, people are writing policy, people are corrupt, people do favors for others they shouldn’t, people get horny, people buy friends’ companies, people eat lobster rolls, people are liars, people want whatever they never had. people are fiercely jealous and seriously judgmental and usually make choices out of fear instead of vision.

  30. karl s says:

    Brilliant article. But by far my favorite line was this one: … this pales in comparison to another contribution — there are likely millions of young women who watch them and think, “Why not me?” I pray this turns out to be true. In addition, I hope there are dozens of young women watching those CEOs going “Why are there no women in that line up?”

  31. Brian Brady says:

    Ronkonkoma, Montauk. If you are writing for a global audience, provide context or a glossary. I appreciate your storytelling, but I always feel a bit out of touch as if I am supposed to understand these references. I lived in NYC but not long enough to have made a trip out to the hamptons. Good Post Scott. Thank you.

  32. Mark says:

    Zuckerberg does not understand rules or boundaries. He is entirely driven by wealth – his own wealth, to be specific. Facebook should be broken up for anti-trust reasons of course, but also to protect democracy. Facebook has become a platform for the worst of the worst and is a genuine threat to global stability.

  33. Kate says:

    The answer to one company selling everything may just be from Canada: Shopify

  34. peter says:

    Is it just me or does Dorsey’s ass always seem closer to the grill than anyone else’s? He’s recently done a lot more than facebook for the good of the people. I would have liked him to comment all the same, just because I think he would have added some good points of view on the problem…or maybe i’m pissing in the wind (not literally).

  35. Philip Moore says:

    Good luck. FB just moves its headquarters to Barbados. How does the US Federal Government regulate a global company with a one-to-one relationship with its users? Try making every US-based ISP block Facebook domains and people can use a VPN to connect to a Norwegian ISP. There is just no technical way to force these companies to do anything short of turning off the Internet.

    • David Good says:

      Without getting into what is good or bad, the Feds regulate (or influence the behavior of) many offshore companies in many ways. The location of Facebook’s HQ is irrelevant.

  36. Will says:

    “God, I miss eating at bars alone, with strangers around me.” Couldn’t have said it better. Me too.

  37. Denys says:

    Always a great reading Scott. One thing that bothered me, though, in your last sentence, is that there’s one tech giant missing in all of this. Depending on how this plays out, we might end up being as back when we had a single, real, tech giant. Maybe even worse, because it became harder to break than before.

  38. Matt says:

    I’m very close to reserving the domain name scottgforprez.com, where I would have a gallery of all your best quotes. Please tell me your serious about 2022. THIS IS WHAT THE WORLD NEEDS. Thanks, Matt Montreal, Canada

  39. Mike says:

    One thing flew over my head: Michael from Ronkonkoma?

  40. Josh says:

    Jayapal is the Chrisjen Avasarala (of the Expanse) of our universe. Love it.

  41. C says:

    You fall into the usual media trap of assuming the GOP is just rich white males. ‘They seemed to be prone to’ statements reflect standard issue media bias that I would not expect to read here.

  42. JT says:

    Scott, you’re very clever and I thoroughly enjoy your business and marketing insights. You make me think differently about many things. And your influence would be even stronger if you could tone down your political views. Why don’t more people leave the politics out and try to be more inclusive. I’m interested in good ideas, not another political opinion. There’s not enough good ideas and there’s too many political opinions.

    • D says:

      Couldn’t agree more

    • Francesca Krihely says:

      Asking a blogger to censor their political views for your entertainment when you are clearly showing yours — lol. You can’t write about Facebook and ignore the overwhelming dominance of conservative voices that breed misinformation and cause societal harm. Is that something you want to perpetuate? You can go back to 1970’s Romania.

    • JTS says:

      @Francesca Krihely Speaking of societal harm…why not let JT express his opinion without your bashing. Different opinions are actually healthy.

  43. Matt says:

    Yawn. Antitrust is such a backward-looking remedy. Facebook is dying already. Apple has one product, just like 35 years ago. Amazon falls back to earth when people realize retail and logistics have lousy margins. And Google dies when the rest of you delete Chrome and search and all the rest of their data-sucking nonsense.

  44. Michael v Conley says:

    In what may be the twilight of democracy, your humour and intelligence give me hope when I had none and a smile when I really needed one. Stay safe, live long.

  45. Shally says:

    love the closing remark. This should be sent to the committee. Great article.

  46. Michael says:

    A brilliant and entertaining article, as always.

  47. Another comment says:

    One thing that could also be emphasized – breaking them up would be doing them a favor. Likely, the pieces in sum would soon be even more valuable than the originals.

  48. JB says:

    Re: 2022 run against Rubio… Please. Be. Serious.

    • Franc says:

      I admit being beguiled by Prof G’s intimated run against Rubio for the Senate. Scott: please reaffirm your intent or confirm your jest.

  49. lorenzo says:

    a wonderful read but do you think breaking up FB’s assets would be best for FB and for the economy and if so how challenging would it be to do, i would imagine Zuck would be wearing one of those NRA style shirts with the gun in the hand saying “you’ll split my tech up from my cold dead hands”

  50. MONICA MALHOTRA says:

    Brilliantly articulated! Resounded with so many similar reactions in my mind while i was watching the Antitrust hearing. On a lighter note, after I heard Mr Bezos and his mommy story, I was inspired to think about sending Sundar Pichai an email saying this is desperate mommy from India who has invested everything in her son’s future, needs help to find her son a job. 🙂 But , Rather go with Mr Cook’s grace in Life ! My compliments on the article