Fire & FawningJuly 24, 2020
The CEOs of Apple, Amazon, Facebook, and Google are scheduled to testify in front of the US House Judiciary Antitrust Subcommittee. Some thoughts…
Big tech has won before the hearing starts. Agreeing to let all four testify concurrently inhibits the committee’s ability to go deep on any one issue, and will leave the American public with a sentiment instead of a viewpoint on big tech, much less any conclusions (such as, that the Obama DOJ was asleep at the switch, and Instagram and Whatsapp should be divested). The Covid-inspired remote format dramatically lessens the likelihood of an unscripted moment that reveals something the American public didn’t previously know. Fabric softener for tough questioning is the deep pockets that keep members in power.
When the show starts, Zuck will be the target of the most ire, as he’s an oligarch minus the charm. Bezos, on the other hand, will receive the least ire, as his command of soft power is second only to China. Being on these committees must be just awesome, as every member clings to their office as if they were Puerto Rican rescue dogs clinging to lamb lung fillet. (I see this with my dog Gangster. It’s a moment that gives you pause … to see how much a living thing can love something else.)
Bezos has the power to take away the committee’s lamb treats (he owns a powerful arbiter in the WaPo) and, maybe more important, they want invites to the best parties in DC (low bar) at the old textile museum — Bezos’s man cave in Kalorama. I think Bezos lacks character and code (he gamifies the commonwealth for his own enrichment #HQ2), but I’d love to roll with him, and so would every first ballot hall of lame panelist questioning him at the hearings. Cook and Pichai will likely just try to stay out of the line of fire and fawning for Zuck and Bezos, respectively. Expect Zuck to use two words repeatedly in his defense (tik and tok) as he attempts to wrap himself in the flag and convince the committee that he’s our national champion, singularly able to repel the invading Chinese … coming for our children.
But there is hope. By limiting the hearing to the antitrust subcommittee, the House gives more time to representatives who have domain expertise. The sharpest of these embers, if they take the right approach, may be able to move the needle from apathy towards outrage and build momentum for future change.
The key here is to recognize the medium is the message. Exploit the one attribute of the format that can be much improved: visuals. These always look awkward and very fifties during live testimony, though Representative Katie Porter does a great job with her mini white boards (note to self: get one). The “share screen” function should be the weapon of choice here. Words will communicate themes (you’re too big and abuse your monopoly power, which suppresses innovation, job growth, and the economy). Little is new here, but points can be communicated more effectively than before. The best opportunity to yield insight into why big tech should be broken up is to highlight the scale of the firms, and the problem. The winning cocktail is visuals and proportion.
The effective panelists at these hearings use the witness as a prop to stamp their passport on the way to the destination (you’re a monopoly). The strategy is simple: ask a question, share screen/visual, unshare so public can see an awkward reaction by witness, allow 5 seconds max for answer, interrupt, and wash/rinse/repeat. So, as I’m hoping to be unanimously approved as US Ambassador to Australia in the Biden Administration (#itcouldhappen), here are my suggestions for visuals and questions:
Q: Messrs. Bezos, Cook, Pichai, Zuckerberg, your firms have added greater market capitalization in the last five years than the largest retailers and CPG firms have in total. This is a large portion of the entire consumer economy. If you were public servants, would you be concerned that too many of the spoils are being registered by increasingly fewer firms and people?
Q: Your market capitalization per employee is thousands of times higher than that of other companies in your sectors. Do you think your companies contribute to income inequality?
Q: Since the onset of the pandemic, nearly every sector, other than big tech and companies deemed too big to fail, has shed substantial value. Instead, since the beginning of the year, your firms and Microsoft have increased in value by an average of 35%, while the remaining 495 firms in the S&P 500 are down 5%. Every firm, sector, and economy appears to have incurred a transfer in value and power to your firms. Should we be concerned that your considerable advantage pre-Covid is now unassailable?
Q: Small business formation is at a multi-decade low. The fastest-growing sectors receive scant funding from investors. Why should someone invest in a search engine right now, or a music streaming business, or a social media platform, or an e-commerce firm, given the sizes of your companies?
Q: Mr. Cook, monopoly rent is when a monopoly producer lacks competition and thus can sell its goods and services at a price far above what the otherwise competitive market price would be, at the expense of consumers. Our information age is often called “the app economy,” denoting how important apps have become to commerce and consumption. Your firm and Google dominate the app ecosystem, with 62% and 38% shares, respectively. This chart shows the rents you are able to extract from every streaming video app. Every media company that wants to reach a consumer online must pay you a toll or rent. Do you think any of these firms believe that paying you this rent is a choice?
Q: Apple TV+ is offering consumers $1 billion in original content for every .80c a month the consumer spends on your Apple TV+ streaming video service. Isn’t it your opportunity to differentiate your $1,300 phones and fund Apple TV+ from the revenues of an unrelated product that allows you to offer a media product at well below cost? In sum, isn’t Apple guilty of “dumping,” that is, buying market share with unfeasibly low prices?
Q: Spotify is consistently rated as a superior music service to your Apple Music, yet Apple Music is growing faster than Spotify in the US. Isn’t this a function of you owning the rails, and being able to levy a 30% tax on a competitor while illegally reducing their discoverability in the app store?
Q: Mr. Bezos, you are the wealthiest person in the world. Your wealth exceeds the GDP of Kuwait and Luxembourg, combined. It exceeds the defense budgets of Israel, France, Germany, and the United Kingdom, combined. A common feature among the other wealthiest Americans of the 20th century (Rockefeller, Morgan, Mellon, Carnegie, Gates) is that most/all of these men presided over firms that were eventually tried for monopoly abuse and deemed monopolies. Why should we believe your wealth accumulation is any different?
Q: Last year, Amazon paid $162 million in federal tax while your largest competitor, Walmart, paid almost $3 billion. Do you think this level of participation in our country’s infrastructure and services is appropriate for a company worth $1.5 trillion?
Q: Due to Covid-19, US consumers are expected to spend an additional $41 billion on retail ecommerce in 2020. Since you control 38% of US e-commerce revenue, doesn’t this mean that you’ve added at least $16 billion in topline revenue due to Covid while thousands of small businesses have folded?
Q: In a five-week period during the pandemic, your firm added the value of the world’s largest firm by revenue — Walmart. If your firm can accrete the value of the largest firm in the world in five weeks, and money is power, then isn’t your firm the most powerful private entity in history? Hasn’t your firm reached a level of soft and economic power well beyond the point when the DOJ has historically taken antitrust action?
Q: Our understanding is your firm has more full-time lobbyists in Washington than there are sitting US senators. Are you aware of any retailer or tech firm, other than Google, that has this many lobbyists attempting to suppress regulation or antitrust action?
Q: Mr. Bezos, 82% of American homes have Amazon Prime, more than voted in the 2016 election, have a pet, attend church, or decorate a Christmas tree. Can you name any other firm that has a recurring revenue relationship with 8 out of 10 households?
Q: Your video content, as registered by IMDB and the National Academy of Television Arts & Sciences, is far inferior to the content offered by AT&T’s division (HBO), yet you refuse to distribute HBO Max as a stand-alone offering on your service. Doesn’t this mean you are leveraging your distribution power to weaken the competition (HBO Max) and reduce consumer access to better content?
Q: Mr. Bezos, the recently released TOS for your audio and podcast platform say that participants on the service cannot say anything bad about Amazon. Are we to assume that all assets you control, including The Washington Post, are restricted to only positive comments regarding you and your firm?
Q: Mr. Pichai, your search engine is the default on Android devices, and you have a multibillion dollar contract with Apple to be the default search engine on the iPhone. You’ve also bought digital advertising networks to build your part of the digital advertising duopoly. What company — whether a search business or an advertising firm — can begin to compete with a behemoth with such a massive advantage and such deep pockets?
Q: Google owns the dominant digital ad server, DoubleClick Ad Exchange, or AdX. Over 90% of large publishers sell their ad inventory on AdX. And Google owns the dominant tool, Google Ads, through which advertisers purchase inventory on AdX. Don’t you think controlling both the auction house for ad space and the main auction participant for buying those ad spaces allows Google to engage in anticompetitive pricing?
Q: You’ve been fined three times by the EU for acting in ways that harm competition. Google searches favor YouTube ahead of other video rivals. Searches often display results just under the question as the user types, making it unnecessary to click any links. This deprives other firms of revenue. You present search results as you see fit, independent of the cost to other businesses. Don’t you think having 71% share in the search business and increasingly locking other companies out of profits through search is unfair use of monopoly power?
Q: YouTube has come under criticism many times in the past for radicalizing our children through an algorithm that suggests increasingly violent and extreme content. A user can start out with “downtown NYC” and within three videos they are being offered conspiracy theories about how 9/11 was an inside job. One of your former engineers accused YouTube of perverting civic discussion through radicalizing algorithms. Don’t you think that if YouTube were its own company and had more competitors of similar size, that it would be forced to work harder to correct these algorithms that are so toxic to the public good? If the best corrective mechanism of a free market is competition, where is the competition to force you to do better?
Q: Mr. Pichai, can you name any other firm, anywhere in the world, that has this level of market share of a sector greater than $100 billion in size?
Q: Mr. Zuckerberg, a Princeton University study of Americans’ internet habits leading up to the 2016 presidential election found that Facebook led users to untrustworthy news sites 15% of the time, and to trustworthy news sites only 6% of the time. Studies have also found that the underlying Facebook algorithm, which promotes emotion and outrage, benefitted Trump more than Clinton. Do you feel partially responsible for the erosion in the sanctity of our elections?
Q: This summer, a number of Facebook’s biggest advertisers announced a boycott of the platform in response to your inadequate handling of hate speech. In response, Nick Clegg, your Vice President for Public Affairs, said, “We’ve made huge strides … But, you know, on an average day, there are 115 billion messages sent on our services around the world, and the vast, vast, vast majority of that is positive.” Clegg’s defense is also an admission that Facebook is too large to safely manage. Are you too big to protect your platform from hate speech and socially divisive messaging?
Q: As we saw in the 2016 elections, Facebook’s power can be exploited to disrupt elections, broadcast viral propaganda, and inspire deadly hate campaigns around the globe. Facebook is an algorithmic rage machine that perpetuates conspiracy theories (including that vitamins will protect you from Covid) at a far greater rate than truth. Enragement is engagement. Nearly half of all top-performing posts that mention voting by mail are false or misleading. What good are you offering your users that outweighs the cyberwar Russia fought on your platform, and that it is prepared to fight again, the systematic surveillance of users, and the torrent of misinformation on your platform?
Q: Teen suicide has skyrocketed — up 77% for older teen girls and up 151% for younger teens. Hospital admissions due to self-harm are up 50% for 15-19-year-old girls and up 200% for 10-14-year-old girls. Gen Z is on the brink of the worst mental health crisis in decades. Do you think platforms like Instagram, where girls perpetually feel their appearance doesn’t match up to filtered images, has something to do with this mental health crisis?
Q: Mr. Zuckerberg, you are in sole control of a platform whose algorithms select and deliver content (news and entertainment) to 2.6 billion people. Your algorithms are opaque to government agencies. You are the principal source of information for a cohort larger than any country or religion — a population greater than that of China and the US, combined. You cannot be removed from office, and will likely control these algorithms for the next 5-7 decades. So, we’d like to get to know you better. You know, get a feel for the real Mark Zuckerberg. A couple of questions:
Are you a pathological liar?
Do you display a lack of remorse or guilt?
Are you a pathological liar?
Life is so rich,
P.S. More about my take on the hearings (or at least, more entertaining) on this week’s Prof G Show.
A few years ago, it was Walmart that was destroying the American way of life. Now its Amazon. Size is not the issue. Harm to the consumer is the issue, and it is hard to demonstrate here. As to Facebook and controlling what people post there, that is not possible, and besides, who gets to decide what gets censored? Who watches the watchers?
Perhaps Walmart is still doing as much harm as ever, or maybe more, but now there is another company in the spotlight. They don’t have to take turns. It’s might be more frightening that what Walmart has and continues to do now hardly triggers our attention. Inch by inch they make it a new normal. And size does matter to that end.
Really, the “low prices are all that matter” argument is a dead letter. Even the neoliberal economists are being forced to admit that economic development is contingent upon economic activity. Imports plus consolidation of retail both backtrack economic development. As for “watching the watchers”: that’s the point of transparent and public algorithms. You know, like how public commissions set utility rates?
Keep it coming!! Good stuff!! Roger
“You are too successful! This cannot be tolerated!”
Accusing Apple of charging too much for phones but also charging too little for Apple TV is hilarious.
Obviously you never understood the point being made.
Great stuff here. I look forward to your post-game analysis.
One could reasonably argue that the reason they’ve grown their market share is also related to the fact that now anyone can compete with those CPG’s by using their services. Anyone can sell chocolate, a dress, a table, or a bar of soap from their computer. They’ve effectively allowed for consumers to have a choice in their purchasing vs not at all. Amazon could talk about how a large portion of all products sold are from 3rd party sellers that create competition and opportunity in the supply chain for just about any product. Facebook allows people to spread the message of a new business quickly and further than ever before. Apple and the smartphone have catapulted the use of technology to the unlikeliest users. They’ve gained tremendous value because they’ve added tremendous value. The next layer of logic against this ‘value’ they’ve gained is that it can be cut by 20-40% as soon as the markets decide to ask for their money back (a selloff of their stock) or simply a crash in the markets. These companies are surely no saints and I’m sure some of their business practices are counter to healthy competition, but I don’t think pointing to their market value is an effective way to do it. I don’t mean to poke holes, I love reading and listening to Dr. Galloway (listening to Algebra of Happiness currently) – these words are just my perspective. Every other point is 100% spot.
The teen suicide rates quoted are over which period? Was it the past decade or past 2 decades? Does anyone know? Tks!
Pretty sure it’s over a decade but I have to admit I had trouble finding those exact stats.
Scott, what would you message be to the leaders and Europe and Elsewhere? You’d agree that is where action is more likely to be taken?
Sharp analysis as always. However your remarkable rethoric skills can’t hide your lack of understanding of the state of the type of AI needed to monitor, let alone police, social platforms. Asking Mark unrealistic questions with a gun on the table, will only increase the likelihood of fake metrics. Remember how we got the GRP..?
Still waiting for you to protest/speak up/whatever about your university increasing tuition during all of this.
Read one of his other 20 blog post or podcast about it. That is pretty much all he talks about.
Check the July 10th Pivot podcast where this is specifically addressed.
“Can you name any other firm that has a recurring revenue relationship with 8 out of 10 households?” Yes. The U.S. Treasury Department. But, far closer to 100% of U.S. Households.
False. Only ~75% of American households pay federal income taxes, payroll taxes, or both. At the individual level, estimates found that 44.4% of Americans did not pay any federal income tax in 2018.
I wish every politician and journalist would ask questions like these. We’d have a much better chance at unlocking the truth, having a meaningful dialogue and creating a system that provides opportunity for more than a select few. Tech is the example here but this interview approach should be scaled to every vertical (pharma, energy, finance etc.).
I totally agree. I actually think every politician would do well to read Scott’s column.
Dear Tech Leaders, it is time to show that you are bigger/greater/wiser than capitalism.
Some good points but all market cap elements should be disregarded. If you look at Microsoft revenues for Q2, their growth slowed down while their marketcap skyrocketed. How are they responsible if the Fed and investors are inflating a new tech bubble ? Would you have asked pets.com to justify their marketcap gains in 2000 ?
That was the best 10 minutes of reading I’ve had in a long time. i hope your questions get to the right people
Good stuff – look forward to the hearings to see how deep they can actually get in the questioning to the root of the problems. Most of the points are good, but I’m similar to some of the comments already posted on the weakness of Market Cap arguments. They are snapshots in time, which can be manipulated by either side to tell their own story. I’d like to get to the root of whether those companies translated those monopoly positions into something tangible (revenue per customer, profit per transaction, etc.)? For example, Apple could counter argue: “from Tuesday, July 21 to Friday, July 24 stock market opening price, APPL lost $147B in market cap almost equivalent to Nike’s entire market cap in a three day period.” They could continue to argue that situation X or Y contributed to the huge loss in value, which just muddies the true extent of their monopoly powers. Second thing I’d love to hear about is how this affects the on-going competition with Chinese competitors (Alibaba, Tencent, Bytedance) worldwide who won’t be restrained by similar monopoly restrictions in their expansion (although this situation is definitely being challenged by India these days).
We’d totally have “Ambassador Dawg” down here in Australia. Bring it on!
This was wonderful. Hope we ask atleast 50% of it.
Prof for Pres
Let’s hope the Senators read this – and the comments for balance.
Can you turn this into a scorecard (or Bingo board) for those of us watching at home? I’d also like to see a post interrogation wrap-up next weekend – who asked what, what graphics / evidence was used to make points, and who’s points actually landed vs deflected.
Mr. Trump is still there. So why would they go after some real millionaires or billionaires with real brains.
Wow. It just doesn’t get any better. “No malice” at its finest. Thank you ever so much.
I’m surprised at no questions about FCC 230. But here’s hoping Porter does the business
The 4 should each be very grateful Prof G shows no malice. Imagine.
Many of these questions are framed to make look the companies bad. For example, the companies have no control on their market capitalization. The market decides their market value. In the current conditions, there are not many places investors can get better returns than investing in big tech. Amazon low tax payments are the result of the tax system full of loopholes created by politicians. And in the case of Apple, they created a digital market place with the best devices, the best operating systems and the most affluent users, yet they charge the same to access it as other digital market places of lesser value. The interesting thing is these companies got big being very good at what they do, and despite intense competition.
The politicians created those loopholes because they are lobbied by those big corporation. Crony capitalism. Monopoly power. They are good at what they do. So was US Steel, so is every monopoly. That doesn’t mean you don’t break them up.
Scott Galloway for Congress! Although Katie Porter is very good, we need as many intelligent voices as we can get. Your points are scathingly correct. The anti-trust philosophy has really disappeared. I was in the banking business. After declaring the 2008 debacle a case of “Too Big to Fail”, the Federal Reserve allowed banks to buy and merge at will, sucking up market share and shedding jobs. It’s part of our new absurd American landscape.
Ahhh you fixed it. Was going to point out that you meant gen z, not gen x as in the newsletter. Excellent analysis as always!
Lol “AAPL is exploiting its power…go check out my podcast on iTunes.”
Are you or have you ever been a member of the capitalist party?
Jaw dropping. From the questions to the supporting stats and visuals. We know these guys swing big bats. You make clear that they own the factory.
Your best to date!
I wish you could be there asking those questions. I have one for you Scott: How does (higher) “market cap per employee” (MCPE) contribute to income inequality? If a company is doing everything in a noble way (eg cleaning the ocean) why would a higher MCPE be a bad thing and result in more inequality? Thanks and stay healthy.
I think Scott is saying that big tech has the means (and continues to pay) for larger-than-average salaries, which means less money for smaller tech or non-tech companies. Gentrification in Silicon Valley or any major metro that has tech presence is evidence of increasing wealth inequality. A fun experiment: show any non-tech worker some software engineer salaries from levels.fyi or Glassdoor. That’ll get them revved.
Talk about a rage machine! You’re drifting into Karenhoood here with your self righteous attacks on the very world you inhabit. The fact is, nobody sold you or anyone else a ticket. It is your choice to use or not use these platforms. It’s their choice to run them as they please. Don’t like facebook? Don’t use it. Don’t like the thought that your kids use facebook? Change your kids. Teach them to look for truth instead of feel good news. I enjoy your ranting and yelling and have for years. But I also enjoy the returns on my Fangs. The real problem here is the people who are easily led will be led by anyone with a simple answer. The digital world is one where first movers with great ideas are often killed by great execution and the best engineers who simply steal those ideas. Maybe you can put these articles up on MySpace. After all, Rupert Murdoch bought it, so we know there’s money behind it, and it does predate facebook. So how about it?
Hear hear. Although I completely agree ‘The Four’ are becoming a force for bad and we should require them to change, it is also true that they represent the best result of organized competence. Why not make the case from good faith and accept that these bad effects are unintended consequences of generally well intending actors? This demonisation and labeling might make for good soundbites, they do not bring productive solutions closer. “Break em up” is too simplistic and it is sounding more and more neo-marxist.
Prof G. For President!!! Brilliant!!
Wow Scott the public is unaware of the control of the techs. How do you suggest they learn about the concerns outlined. Can’t you get on that panel and ask these questions.
A cracker! Laughed out loud at the end ‘PS’. We teach kids digital citizenship in schools and the majority are enamored / blinded by this dominance. Likeability / glamour of the numbers. And sadly I expect most of the committee are too old and disconnected to probe how GenZ actually consume, and consider the defence of the next generation – what does monopoly do for them? More hamsters running on that wheel standing on the sidelines as election votes bend, perspectives/opinions narrowing due to algorithms, consumerism seeping deeper into our pores, and connection to brain and body and the sunshine of glorious individuality clouding over. And *self-esteem*, yes, on the part of social media, that tiny ol’ part of our own OS that controls the way we see ourselves every day for, um, forever. I think it’s why I want to teach critical thinking > choice? Awareness is highly undervalued. There’s a reason why mindfulness (and related technology) and of course traditional medication were blowing up even before the COVID pandemic. Media tells stories. We process stories. Stories help shape our view. As adults that’s fine, but for kids, I worry. I don’t worry that they will try and change the world, or the fortunate ones will make money. I just hoped that monopoly might do more for the human race and not just for the chosen ones. For kids, it’s hard to find your own internal flow with so much noise. A strong current. Life’s rich, Scott – perhaps companies want to be richer than that?
you were going well until this sentence: “Facebook is an algorithmic rage machine that perpetuates conspiracy theories (including that vitamins will protect you from Covid) at a far greater rate than truth.” All I can add is you need to get up to speed with the work of Dr. Paul Marik, who, more than 2 years ago, was interviewed having created a 80% cure for sepsis using intravenous vitamin C, hydrocortisone and Thiamine, Vitamin B1. When the COVID-19 pandemic was declared, several very highly qualified and regarded doctors joined with him to create a carefully upgraded version of his original treatment; what they call their MATH+ protocol, which was presented April 5th; that surpasses anything else when the treatment is started immediately when a patient is hospitalised. Yet, total silence, all reference being suppressed. Why is that information being suppressed? was by far the best question you could have asked. Very sad!
Great thoughts. Big Tech is yet to grow really big.. AI is still to grow. We can imagine where the world will be in a decade from now. And of course we have Tesla too..
Great stuff, Scott. These hearings are a superb idea in principle but it wasn’t desperately encouraging to read in the comments that previous attempts to question Mr Z in the US had been as feeble as what happened in the UK ie poorly briefed, or just plain dim, politicians grandstanding. It also takes guts to challenge companies with the lobbying and funding power these guys have. Here’s hoping their aids read your posts and get some ideas.
This is the best newsletter I’ve ever read.
Nice… fairly well reasoned, but I found the emphasis on market cap a bit pointless. After all, ascribing the valuation of a company as the de facto standard by which a monopoly is judged in current conditions as rational seem to be just a tad irrational. Unless the author believes that the stock market is somehow the arbiter of truth.
Good points but market cap reflects the market’s view of future earnings and being a de facto monopoly at little risk of regulation sure helps.
Great piece, professor! I hope those with power to do something will use your good work
Another great read- thank you. And we would love to see you in Australia once the boarders are re-open. stay safe
Great piece, but you really should be more even handed on the political bias. Google searches lean radically left. FB isn’t programmed to lean conservative, that’s more a function of dollars spent. Google is programmed to skew search results left.
Love reading your posts, even though they make this old guys head hurt. How I wish you were asking the questions on Monday
Professor you forgot little bitty Twitter…although they weren’t invited to the big shindig. Tiny Twitter that packs more hate than all the other sites combined. Now if we could have a new law that would require folks to identify themselves when on the net…oops there I go dreaming again. Good read!
Yes. The goose that laid the golden egg has stomped all over it in its self absorption and now we have an gooey mess. The situation requires a review and some balance needs to be found. Although in relation to the geo-political climate of today, yesterday’s approach to anti-trust needs to be viewed not from a national perspective, but an international one. The problem with these reviews in the US Capitol is that it is handled by people in the US Capitol. We learnt the last time Zuck was in front of the crowd that this group of people are truly inept and in the deep end with no ability to swim when trying to disect the situation with big-tech. The people can’t trust this group and there needs to be real expertise examining the situation. That is not going to happen and when coupled with cronyism and the blatantly obvious gov-business relationship in the US can anyone truly anticipate the right type of outcome here? The more recent occasions seem to pan out like jealousy or a get square campaign. That is not what is required. I argue that the US must take a very different and measured view and that it must be a geo-political lens. The good news – the US business climate built these extremely successful businesses. It is a demonstration of the democratic-capital model executed well. In that case we need to ask what does the ‘destruction’ of successful US businesses with global influence have from the perspective of US power, soft power and reach of information? If destruction is the outcome then the US loses powerful tools for distribution of information, culture and values and to that end much of the western world. Right now the emerging China and belligerence on their part as well as a digitally connected globe make this discussion of extreme importance for the future not of the USA but of the world. While these platforms can be used as a weapon without proper regulation and oversight, they can also be used for a weapon of good too. Rather than destroy US companys that have done well on a global scale, how do you harness the power and ensure that the nation and the people benefit from these global behemoths that have the capacity for a level of hegemony in a rapidly changing world? Few meaningful decisions that are made in todays world have only local impacts. This is global matter. Once upon a time the most important utilities were provided by government and semi-government organizations. While the desired outcome would not be to see government bodies in full control, perhaps a significant shareholding of these companys needs to be held by the government with a board level representation on behalf of the people of the USA. Can anyone argue that Search is not a utility in todays world? Their very success will also benefit the coffers of the American people and be put back into programs for the greater good of all. In this way successful global companys continue to grow. The people benefit from their success through a national shareholding and the companys still contribute to the tax coffers as well. The US continues to enjoy platforms that have a largely positive reach and impact on the world. There are great examples of this model of success around the world. Broken apart will create opportunities for others. But they may not be companys that have grown out of the US where a level of oversight and regulation on behalf of the people is an actual possibility. Did someone say something about the US and China battling over the future of internet standards……?
Up to a point you are correct about the potential to distribute information world wide; the problem as I see it, is that to fulfil your aiming point; that information must be of the highest ethical standards, corresponding to the stated claim that the United States is leader of the free world. Instead what we are seeing now is a return to the mindset, this time of a few powerful individuals; intent upon repeating the mistaken beliefs of National Socialism in Germany during the run up to 1939, so brilliantly depicted in the 1941 movie, Freedom Radio. The parallels are becoming alarming.
Do you think using Microsoft’s Internet Explorer market share is honest? Microsoft doesn’t make money from IE, why not their desktop %? Of if you want to be really disingenuous why not their search engine market share?
Google should point to Bing and explain that they’re competing with a trillion dollar company with search and ad revenue Bezos would be wise to show Amazon vs Walmart’s revenue. Then point to Tesla vs Ford’s market cap vs revenue and ask if Market Valuation is the best metric. Bezos should probably show how much money they’ve spend on R&D, capital products, etc. and then show how much federal tax they made next to profit (are they still profitable?)
Sir – I wish I had the opportunity to learn from you in my MBA. More power to you , may this reach the right people !
Prof G + readers, I hate to take FB’s side but what are your views on the personal responsibility angle. Behind all the harmful posts on FB are real humans with free speech. With the only available recourse being account removal due to TOS, do you really expect anything to change? I wonder if it’s time to revisit free speech exemptions for the internet age. Looking through the Napster lenses, there’s no easy answer but you don’t blame the highway when a drunk driver kills another’s driver (or themselves).
great points Justin – is this really more than sour grapes for so many who seek “correct” speech at the cost of “free” speech? Where are the “I disagree with what you say, but I will defend your right to speak” allies? What if platform-weaponization assured a D outcome? would anyone hear outrage if it came from a small outside-the-mainstream left-leaning channel? I’m no shill for any party or man, but, by G, this really feels partisan and not neutral. I’m willing to be corrected when shown that I’m wrong and/or naive but I have not yet been brought to acceptance of the arguments I’ve heard thus far that this platform is endemically evil and requires an overhaul
@Ben Frank You guys make some excellent points. When Obama used targeting and social media to win the election he was a genius. When Trump did he was evil, corrupt and despicable.
@Bill There are big differences in how the 2 campaigns used FB. 1) Trump partnered with Cambridge Analytica, which illegally used FB data to funnel very socially divisive messages into voters’ minds through micro targeting. Freedom of speech ≠ the right to have hateful messages delivered repeatedly and specially to people who already have racist biases, for a specific political purpose. 2) Russia employed hundreds of thousands of bots on behalf of Trump’s campaign. 3) The Trump campaign messaging is much more conducive to FB’s algorithm (fear of loss, hatred of other groups, “they’re coming to get you”). Fear and outrage are THE emotions that thrive on FB — and the kind of content that gets millions more shares and comments. Not just “more,” millions more. The highest trending posts on FB are always conservative stories because the nature of the content jibes well with FB’s algorithm. Obama telling you you should pay more taxes so there are fewer homeless people? How far will that go? Hopeful & optimistic messages don’t do well on FB; demonizing ones do great, as well as conspiracy theories like Pizzagate, which thrived in 2016. Forty-five percent of Republicans believe Pizzagate is real.
Prof G should send this to all of the senators in these hearings, complete with the graphics as slides they can screen share. Let’s hope you get Australia – I’d like New Zealand!
I never comment anywhere but this has left me with loads of question. Google and Search- other search engines exist, people *choose* to use Google, simply because its technically the best. Would people notice if you changed the default to Bing, I dont know but User experience is a massive factor here. If I have to go to ( God forbid) page 2 for a solution to my question my experience has gotten worse. Your correct with the apps stores but both companies will come back with the same reply, “security and privacy.” I still find it strange that people keep using pre-internet companies to measure against Internet companies. Pre-internet companies are still bound by the old world problems of distribution, geography and and business models. The internet created winner takes all models as there’s no friction to finding where all your friends are, or where to buy anything you can think of, or owning a device that is/was a stroke of design genius, to look at and use. There seems to be a lot of break them up and bundling all these companies together, all very different businesses, all with the same solution? How does breaking up Facebook improve my privacy, how does it help me if half my family doesn’t use Facebook, can it and Instagram share data, can I message cross platform? Can I port my data from one to the other? I’m not sure breaking any of these up leads to the benefits people are looking for.
I especially liked “embers.” Seemed very apt.
… and yet we’re all still members of that which is killing us. If the Pied Piper is a maniac, the children just couldn’t have been terribly smart to begin with.
Is it too late to have the Professor run the hearing and ask these questions? Only thing missing are questions on 230,…
mostly enjoyable – Really wish you’d stick to attacking the actual problems our congress ought to be solving with these CEOs – you’re doing fantastic just there. I quibble with so many of your favorite useless comparisons (omg! Bezos > GDP Kuwait+Luxembourg!? no, no please – that’s just Terrible!) and false equivalents — like the bastards’ unconscionable hoovering up market cap (um, wouldn’t it be expected to see top content purveyors ascend during le grande lockdown?) which is investors voting with their feet not direct consumer manipulation or evidence of malfeasance — all of which you deploy attempting to drum up outrage at… what? How much money is outrageous and why do you get to decide? Where is goldilocks American equality of economic distribution and what the bleep are these companies on the hook for solving that pet problem? Keep attacking and asking & pointing out actual bad corporate behaviors which can be pragmatically dealt with and just lay down your weapons already on the silly very rich = very bad rhetoric – you cannot conflate the kind of outrage you have with bad behavior to augment your arguments – and you don’t have to even go there in order to land devastating punches.
Lots of facts, all likely correct. But Scott, you are angry at the wrong people.I don’t necessarily blame the companies, I blame Washington. And, those who are hurt by the Anti-Trust issues are not placing blame in the right spots. They, or we, the voters have decided that orange hair, blm, GW/CC, and micro-aggressions are all more important than electing a competent and honest Congress. Lobbyists are doing their jobs, better the voters are.
Excellent! This is the kind of forensic questioning that lawmakers have shown themselves hopelessly unable to do on tech matters. I hope they read this post.
I agree with the premise of this post that it will be challenging to dive deep on any particular theme, whether it is erosion of civic discourse, anti-trust, taxes or income inequality. I would love to get a glimpse into lawmakers’ preparation for this hearing to understand how they are hoping to structure the session, and how strong a position they intend to take.
Facebook is now responsible for “socially divisive” content? Can you please explain who is to be the judge of that (besides yourself, of course)? But since you took the job, please give us an example – is a pro-life person responsible for social division, or is the pro-choice person the cause? A simple answer one way or another would be appreciated, as so many of your columns lately just sound like an old white guy ranting at the TV.
All 3 US intelligence agencies agreed that Russia had posted “socially divisive” content on Facebook — content that stoked racial conflict.
One question for Facebook: why can’t a user’s personal information uploaded on Facebook / Instagram be shared with different contacts on other platforms if the user accepts sharing this information with those different contacts?
As usual, we enjoyed your commentary. We want more about who we really want to be the censors on hate speech or other undesirable commentary online. I find it amazing that liberal lawmakers want employees of the big corporations they despise to do it. If not them, who should be the censors? Priests? Politicians? NY Times? FBI? You can explore this much better than I can.
I feel that many arguments/charts linked to market caps are easier to dismount as the market valuation at the current time could be driven by sentiment or views about the future. Also interesting to see that the company missing here (Microsoft, $1.6tn market cap) had its own antitrust process years ago, and it seems now more powerful than ever…
This is stunningly good. I don’t know how you do it. Keep it up.
The teen suicide and self harm numbers you cite are staggering. What time frame does that growth represent?
Wish you were up there grilling them. In the 2nd to last question it says: “Gen X is on the brink of the worst mental health crisis in decades.” I think you mean Gen Z? (one letter over on the keyboard, but a few years off 😉 Keep being a gangster Scott.
Great stuff. I would suggest 1 more question: Mr. Zuckerberg, when will you be honest with the public and admit that your business model is not “connecting the world” but rather “hoovering up all the personal data you give us for free and selling it to anyone with a checkbook and an agenda”?
Z’s answer should just be. ‘because the public lets me, what is wrong with that?’ While I despise him, I have no sympathy for the whiners. Stop using FB.
In my opinion – this is not only a piece of brilliant analysis on markets and competition but also it’s also a rare exercise of informative journalism very much (and more frequently) needed in the modern society. Congrats once again Prof G.
Prof G: You’re just trying to trick Zuck, right? I mean proposing to ask him “Do you feel partially responsible for the erosion in the sanctity of our elections?” Robots can’t feel. 😉
WOW. I’ve been impressed with your takes for years Prof G but this hopefully will open the eyes of our “lawmakers” yawn and get them to think critically. I question their ability to understand the underlying technologies without the background but then again I question their ability to know much of anything that is a runaway freight train. Things like racism, sexism, healthcare, etc
Prof…just missing one point… Make it clear that the graphics in this post are free of copyright/in the public domain, and absolutely available for the committee to put on their whiteboards without change (or credit).
Well put. Professor Galloway. If only the panelists could have the spine and the mettle to ask these questions and make these companies accept even one third of the arguments you brought up . The hearing is probably going to be just another checkbox tick with no real action items or policy changes.