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Facebook Businesses Democrats United States

Top Antitrust Democrat: There's a Case To Break Up Facebook (axios.com) 175

Posted by msmash from the tussle-continues dept.
Rep. David Cicilline (D-R.I.), who ended Wednesday's hearing by saying some Big Tech companies need to be broken up, says that Facebook in particular lacks significant competitors and should not have been allowed to buy Instagram and WhatsApp. From a report: Cicilline chairs the antitrust subcommittee, which has been looking into competition issues in the digital space. "Mr. Zuckerberg acknowledged in this hearing that his acquisition of WhatsApp and Instagram were part of a plan to both buy a competitor and also maintain his money, power, or his dominance. That's classic monopoly behavior," Cicilline said on the "Axios Re:Cap" podcast. Cicilline's criticisms weren't limited to Facebook, pointing to the power Google and Amazon also hold in their respective markets. "I think what we saw today was confirmation that these large technology platforms have enduring monopoly power," he said in the interview with Axios' Dan Primack. A key issue remains whether existing antitrust law is broad enough to address the modern tech industry, especially companies that provide their products at no direct charge to consumers. "Congress is going to have to 'think outside the box' in a comprehensive way about what antitrust laws should look like in the 21st century," Neguse told Axios' Ashley Gold after the hearing.
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Top Antitrust Democrat: There's a Case To Break Up Facebook More

Top Antitrust Democrat: There's a Case To Break Up Facebook

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  • Sure but... (Score:5, Insightful)

    by Xenographic ( 557057 ) on Thursday July 30, 2020 @11:48AM (#60347987) Journal

    Don't forget to do the same for Google, too.

    Having significant fractions of the world's private data in private hands can't be good.

    • Re: (Score:2, Insightful)

      by omnichad ( 1198475 )

      Google, Facebook, Apple, and Amazon. Really all of these are in positions of abuse similar to what nearly caused Microsoft to get broken up.

      • Google, Facebook, Apple, and Amazon. Really all of these are in positions of abuse similar to what nearly caused Microsoft to get broken up.

        Apple is a monopoly that has no competition of any kind [android.com] in the PC, mobile device, smart watch and media streaming box markets?

        • Apple was around when Microsoft was facing anti-trust lawsuits. You don't have to have zero competitors to be in a monopoly position.

          • Re: (Score:3)

            by EvilSS ( 557649 )
            So you feel that Apple should have been broken up back then? Because they are not the dominate player in any space they sell products in except maybe tablets, just like they were not the dominate computer company back then. Microsoft was.

            • No, my point is that Microsoft had competition back then. Apple is a dominant player in smartphones. Not sure if you missed that. Android is bigger, but only in aggregate of all the manufacturers.

          • MS bailed apple out specifically due to antitrust concerns

          • That is true, but you do have to have some kind of overwhelming position in the market. That's why MS got hit, it had competitors but they were so small that anything MS did turned them into nearly a rounding error.

            But really, this theater has nothing to do with that. This is about getting together the 4 biggest players in tech so that they can get them to agree to build gov't backdoors into products, including encryption, because they know if they get them, what's left will either fall in line or be so s

          • To put it more generally, you don't need a monopoly to be anticompetitive. Monopoly is the end game for that kind of behavior - but the damage to the market happens while the game is in progress.

            Conspiracy to murder is illegal because ideally you want to make the arrests before the plan is carried out. Given how many of our leaders profess to value a free market - the lieutenant governor of my state recently declaring it "more important than living" - you'd think they would prosecute anticompetitive behavio

          • Re: (Score:2)

            by tlhIngan ( 30335 )

            You don't have to have zero competitors to be in a monopoly position.

            Monopolies are allowed. If you didn't allow monopolies you'd be in serious economic trouble.

            What you're not allowed to do with the monopoly is abuse it. Microsoft used their Windows monopoly to barge in on the browser market - basically by dumping IE on everyone to kill Netscape (who had to charge for their browser and made most of their money on corporate licenses).

            Windows monopoly by itself was fine. Dumping on browser markets was not. E

        • That isn’t exactly the issue; justification of abuses occuring will result in changes to the laws.

          Apple likely has the least to fear; my iPad comfortably supports Box/Dropbox/Drive/OneDrive/Samba/WebDAV/NextCloud, along with iCloud, as an example. They even help glue some of the data together.

          The lack of any viable competitors to Facebook (good luck, WT) puts them way ahead in the monopoly category, and their documented abuses make it pretty easy. Google is an interesting one... we find ourselves sh

          • The lack of any viable competitors to Facebook (good luck, WT) puts them way ahead in the monopoly category

            And yet breaking them up won't fix it. Anti-trust laws are based around the idea that competition is necessary for a healthy market. Communication services like this require a critical mass of users before they're worthwhile at all. Competitors have come and gone - and they didn't fail on their technical merits. It's because you need more than just being an alternative to shift a billion+ users around.

            We do need better laws for this. Being a monopoly is technically OK under the law. Abusing it is not.

            • Re: (Score:2)

              by dgatwood ( 11270 )

              The lack of any viable competitors to Facebook (good luck, WT) puts them way ahead in the monopoly category

              And yet breaking them up won't fix it. Anti-trust laws are based around the idea that competition is necessary for a healthy market. Communication services like this require a critical mass of users before they're worthwhile at all.

              I think you're taking way too narrow a view of what breaking up Facebook would look like.

              Remember the Ma Bell breakup? When that happened, people in Tennessee didn't suddenly lose the ability to call people in California. Why? Because those systems talk to each other. They agreed on how to manage the shared namespace, and from there, everything just worked. I see no reason that a similar approach could not work with Facebook using OpenID federation and some sort of shared communication standards. Even

              • I see no reason that a similar approach could not work with Facebook using OpenID federation and some sort of shared communication standards.

                How about the fact that the vast majority of the activity on Facebook doesn't involve communication?

                P.S. You're describing Google Wave and it failed miserably.

                • Re: (Score:2)

                  by dgatwood ( 11270 )

                  What else do people do on Facebook? They join groups for communication, they text each other, they post on their wall... that's all communication. Or are you talking about games (which could easily run on multiple services)?

            • My opinion is that any so called natural monopoly where redundancies in capital expenses would make competition inefficient should be government owned. Utilities are the stereotypical example, and for a good reason.

              If it can't stay competitive then it should be accountable to the public.

        • Google, Facebook, Apple, and Amazon. Really all of these are in positions of abuse similar to what nearly caused Microsoft to get broken up.

          Apple is a monopoly that has no competition of any kind [android.com] in the PC, mobile device, smart watch and media streaming box markets?

          Is it enough that you can buy different hardware if you want to use a different app store?

        • Generally Apple customers and non-apple electronics customers are separate groups. With few exceptions most people I know who buy one Apple device only buy Apple devices whenever possible. So yes. Apple does not have a competitor because generally speaking people don't cross shop iPhones with Android and Macs with PCs. For them to not be a monopoly there should be third party Mac and iOS system integrators like with Android and Windows.

      • Google, Facebook, Apple, and Amazon. Really all of these are in positions of abuse similar to what nearly caused Microsoft to get broken up.

        And Microsoft, Oracle, Verizon, AT&T, Disney and Sony would be a good start, if they're doing anything more than paying lip service to antitrust.

        • Google, Facebook, Apple, and Amazon. Really all of these are in positions of abuse similar to what nearly caused Microsoft to get broken up.

          And Microsoft, Oracle, Verizon, AT&T, Disney and Sony would be a good start, if they're doing anything more than paying lip service to antitrust.

          I am not a lawyer, but it seems to me that Sony is the odd company on your list. First, I don't think they're really an overwhelmingly dominant player in any market. Second, as a Japanese company, does the U.S. have the power to do much other than issue fines (like what the E.U. does to U.S. companies)?

          If you're looking for scary powerful Asian tech firms, I would think Samsung would be in the crosshairs before Sony.

      • Re: (Score:3)

        by lgw ( 121541 )

        Facebook doesn't have the market dominance that MS did, but they have enough to have monopolistic power. Breaking them up makes little sense though - they just need to be regulated for better consumer protections.

        YouTube is a monopoly, but again breaking them off of Google won't change anything important for them. They need both consumer and contractor protections though. Gig workers in general need better protections, and that includes YouTubers. We haven't come to terms with "managed by bots" yet in r

        • I think it Facebook should be splint into Facebook, Instagram, and advertising.

          Alphabet should be split into YouTube, Google, and adverting.

          I agree with you about Apple and Amazon. While I find the sheer size of Amazon to be troubling, I'm not sure that there's a case to be made that they're abusing a monopoly position. While I would certainly love to see AWS break off from the rest of the company, I don't know if there's a strong case to force that to happen.

          When it comes to Alphabet and Facebook, I think

          • Re: (Score:3)

            by lgw ( 121541 )

            There is no Facebook or Google without advertising.

          • If you de-couple Youtube from Google Ads, they'd just develop their own in-house advertising on day one (ok, maybe day 2). It's not like Google Ads would be competing with other advertising platforms to service Youtube.

            I'm not sure that there's a case to be made that they're abusing a monopoly position

            The 3rd-party seller market will probably disagree with this. It doesn't matter that they barely make any money off Amazon's ecommerce business compared with AWS. Just as one example, forcing all sellers of a product to have their inventory of an item binned together to save Amazon warehou

            • Re: (Score:2)

              by lgw ( 121541 )

              The 3rd-party seller market will probably disagree with this.

              The counter-argument is: you don't need to use Amazon to sell your own stuff online. I don't think the answer is obvious there. E.g., Apple certainly has the right to be draconian and unfair with the Apple store, because there are plenty of other phones/app markets in the world. I wouldn't object to regulation here, especially for the dirty trick of seller data mining, but I don't think it's so clear either way.

      • Re: (Score:2, Interesting)

        by ShanghaiBill ( 739463 )

        Google, Facebook, Apple, and Amazon.

        None of these companies are monopolies.

        Google's market share is about 28%.

        Facebook's market share is about 12%.

        Apple's market share is about 25%.

        Amazon's market share is about 5%.

        Except for Google, none of these companies are even the biggest competitor in their respective markets.

        • Facebook's market share is 12% of what market? If you broaden the categories enough, anyone is a minor player. But for all social media in the US, it's still over 50%.

          Apple's market share is not 25% in the US. It's the US market that matters for US anti-trust regulation. They had 49% of the market for smartphones as of Q4 2019. Their next closest competitor only had about 20%, even if they share the Android platform with most of the remaining competitors. And maybe smartphone is too broad a category a

          • Facebook's market share is 12% of what market?

            Advertising.

            If you broaden the categories enough, anyone is a minor player.

            98.5% of Facebook's revenue comes from selling ads. So no need to "broaden".

        • Re: (Score:2)

          by schwit1 ( 797399 )

          Googles search market share [oberlo.com] is 90%+

    • Re: (Score:2)

      by HiThere ( 15173 )

      In both cases there's a strong case that they should either be broken up or be regulated monopolies. The problem with regulated monopolies is that there need to be MUCH stronger steps to prevent regulatory capture. The problem with breaking them up is that the benefit of the network effects would be lost. And yet....perhaps both steps should be taken.

      The thing is, vast concentrations of power are both useful and dangerous. To pick one useful example, if Musk didn't have a vast concentration of power, Sp

  • I am as concerned as anyone about the unjust influence exercised by big tech, big media, big corp, big pharma, big union, big military, big bank, and big everything else, upon the masses of mostly uninformed if not disinformed people.

    However, I also am concerned about the idea of the federal government, on behalf of which most of the above operate, having the power to "break up" anything or anyone, given that this is not among the powers granted to it by the Constitution, and also given that no person (incl

    • Re:Problematic (Score:5, Interesting)

      by jacks smirking reven ( 909048 ) on Thursday July 30, 2020 @12:04PM (#60348047)

      It's pretty much settled law that the Federal Government can, under some restrictive circumstances, break up a monopolistic company. The bar is pretty high though which is why we haven't really seen it practiced successfully since AT&T. Everyone gets due process since the case goes to court and has to be judged accordingly.

      That said I think Congress can be more effective against Facebook and the other tech giants by passing stringent data privacy and collection laws as well as enacting stringent encryption standards for US citizens in the name of Homeland Security. There is a lot of areas around the edges of these companies that law can chip at their pervasiveness.

      • No ex post facto laws either, and big companies are easily able to get around those kinds of restrictions, while smaller ones often are not, and therefore these kinds of restrictions often have the opposite of the allegedly intended effect.

        I don't have an answer as to how to reign in these companies' powers. I just suspect based on history that more unconstitutional and likely ineffective "law" probably won't do it, and very possibly might make things worse.

        • See, now you've moved the goalposts from antitrust to ex-post-facto. Also smaller companies by definition are not generally subject to antitrust laws which is what we are talking about.

          What we are seeing in tech is market distortion, partly enabled by the government yes, but a market failure nonetheless. We do not and have never had a "free market" in this country so the government can and should enact laws to correct these. The fact that they "might" make things worse is no reason not to try, it's obvi

          • You'll have trouble convincing me that problems caused by governmental interference in markets can be cured by more governmental interference in markets.

          • Re: (Score:3)

            by Dog-Cow ( 21281 )

            Completely free markets will always lead to monopolies, so the lack of one is not a good argument to make here.

            • That's my point, the fallacy of belief that if you just stop regulating the magic of the market and perfect competition will sort all the problems out. It's a libertarian fantasy that has never existed in history. The government does, can and should regulate markets where necessary, it can just be doing it better, especially to correct past mistakes.

              • Re: (Score:2)

                by Shotgun ( 30919 )

                The problem is that the government doesn't usually regulate the markets for the benefit of voters, as much as to benefit their benefactors.

                Take banking, for instance. A simple method to defeat the "too big to fail" phenomenon would be to require a higher percentage of cash in reserve as a bank gets larger. There becomes a negative feedback that counter-acts the natural positive feedback that is inherent in unregulated markets, and the larger cash reserves would protect both investors and clients.

                Instead,

                • Yeah sure, I agree with that. Regulatory capture is a real issue but you don't fix that issue by just taking the reigns off further and hoping they play by the rules because there are less rules. You start by removing money from politics, fixing campaign finance and really it's up to us to elect more politicians who take a stance against corporate welfare and influence. For as much as people like to rag on AOC or Elizabeth Warren those are the types of officials we need to create stronger, fairer, and be

      • The bar is pretty high though which is why we haven't really seen it practiced successfully since AT&T.

        Wrong. The reason we haven't seen it practiced successfully since AT&T is corruption. The USDoJ had Gates and Microsoft up against a wall and Bush's AG John Ashcroft let them off the hook.

    • having the power to "break up" anything or anyone, given that this is not among the powers granted to it by the Constitution

      Forming a corporation at all and acting as a distinct entity is only under the power granted by state or federal government. Otherwise, people are just individual people.

      • Incorporation and limited liability are problems also, from my point of view, but you do make the very valid point that the protections and privileges granted thereby are an act of the state (literally the state in this case, not the fedgov) and therefore a case can be made that states could condition these benefits on generally lawful behavior.

        Unfortunately, we still have the problem of jurisdiction shopping, which is one of the means by which megacorps currently evade accountability for much of their bad

    • I also am concerned about the idea of the federal government, on behalf of which most of the above operate, having the power to "break up" anything or anyone, given that this is not among the powers granted to it by the Constitution.

      Yes it does. Article I, Section 8, Clause 3 states that the United States Congress shall have power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

      • That is the view generally accepted by those who favor or at least accept unlimited federal power, but I am not among them, and if you take the time to review the actual meaning of the term "regulate" at the time that the Constitution was created, you might understand why.

    • Interstate commerce clause. Yes, it gets abused a lot, and it does seem somewhat outdated given that every economic activity these days is interstate in some manner compared to 1787, but it is in the constitution.

      • Yes, but, correctly read, it empowers the fedgov to EMPOWER smooth trade between states, NOT to restrict it. Consider that even as late as the early 20th century, Congress recognized that alcohol prohibition would require a Constitutional amendment. Today, it would just be ordered by some federal bureaucracy, and that would be that. Also consider that if the current explosion of left-wing, Marxist nonsense were to create significant blowback (as I truly hope it will), it could swing all the way to the po

        • "Correctly read" is doing a lot of work for your argument and is purely your view, not the courts.

          And capitalism is really dropping the ball currently so your hope of some "Marxist blowback" is really getting kneecapped by the very libertarian-capitalist systems that are furthering the massive income inequalities and distorted markets they have created.

          If you don't want more socialist-styled systems to come out of future governments these capital entities are going to need to change their methods of operati

  • So what do we call the bits ? (Score:5, Funny)

    by Alain Williams ( 2972 ) <addw@phcomp.co.uk> on Thursday July 30, 2020 @11:57AM (#60348017) Homepage

    Lefteyebook, righteyebook, nosebook, mouthbook, ...

  • Read what the prophet said (Score:3)

    by mveloso ( 325617 ) on Thursday July 30, 2020 @11:58AM (#60348025)

    Dude predicted this months ago. He also predicted the death of Blackberry and Nokia back in the day.

    http://mobileopportunity.blogs... [blogspot.com]

  • Like MSFT, right? (Score:4, Interesting)

    by cephalien ( 529516 ) on Thursday July 30, 2020 @12:10PM (#60348089)

    Oh yes, because we did such a great job breaking up Microsoft.

    You know, talk to me about anti-trust actions when you can actually demonstrate the ability to do anything more than rubber stamp another megacorp merger. Otherwise, this is just another example of hot air while the country is in the middle of like a half dozen REAL crises.

    • MSFT wasn’t broken up, but their dominance was shackled for 15-20 years. The one thing worse than Facebook would be if Microsoft had been able to embrace-extend-extinguish them in the early days... or if they weren’t concerned about being a dominant player in the internet search business in time.

  • I really worry when a legislator decides to "think outside the box" to come up with a way to make something illegal that they acknowledge is currently not illegal.

    Sure, a case can be made to break up FB, but they admit it relies on broad interpretations of existing law that probably won't hold up on a judicial review. So they want to change the law to include what they need to make it happen... and then apply it retroactively to accomplish their goals.

    • You don’t necessarily need to retroactively prosecute Facebook with new laws, but you can be a chain on them for future growth or anti-competitive practices. They never should have been allowed to purchase WhatsApp or Instagram, but you cannot revoke that permission retroactively.

      You can make plenty of laws though that drastically limit the value that advertisers perceive with FB’s platform though.

  • Choice One: Zero censorship of any sort, and retain Common Carrier immunity from lawsuits, or:

    Choice Two: Continue as is, moderating content and jailing/shadowbanning users. . . .and lose Common Carrier immunity.

    They can't have it both ways. . .

    • I don't think any social media company technically qualifies as a common carrier by the legal definition. But regardless..

      Choice One: Zero censorship of any sort, and retain Common Carrier immunity from lawsuits, or:

      If you think this is a good idea I suggest you try treading Slashdot at -1 for a while and then get back to us.

      Choice Two: Continue as is, moderating content and jailing/shadowbanning users. . . .and lose Common Carrier immunity.

      If you make the platforms liable for all user generated content then you're effectively asking to turn the internet into cable TV, where a few big gatekeepers meticulous curate what is and isn't allowed to be seen.

      Personally I don't like either of your two options and I'm glad

    • Choice One: Zero censorship of any sort, and retain Common Carrier immunity from lawsuits, or:
      Choice Two: Continue as is, moderating content and jailing/shadowbanning users. . . .and lose Common Carrier immunity.

      They don't have "common carrier" immunity now. What they have is protection from liability for moderation under Sec.230 of the CDA. When you used the words "common carrier" you lost all credibility.

  • ... When Zuck realized it would be part of the outcome, and started trying to deflect attention away from Facebook, saying that the other tech companies are worse.

  • ... only applied to *services* though? Facebook is not a service...

  • ...Facebook in particular lacks significant competitors...

    What about MySpace?

  • Politicians don't understand technology (Score:4, Insightful)

    by ZipprHead ( 106133 ) on Thursday July 30, 2020 @12:16PM (#60348137) Homepage

    The political winds are flying against social media. I'm not saying Facebook shouldn't be broken up, but the elephant in the room is Google. They have become the front door to the Internet.

    • Re: (Score:2)

      by Shotgun ( 30919 )

      Parks/wilderness areas don't actually have doors. FB is just one of the many pavilions in the park.

  • We break up Facebook into seven babies.

    Then, my Mom is on FB1. Her sister is on FB3. My brother is on FB4. The three of them talk it over, and all move to FB3.

    Repeat endlessly throughout the USA (at least). Pretty soon most everyone is on FB3. FB1/2/4/5/6/7 all fade away, and then there is only FB3....

    After all, it's not like the Feds can require my Mom to stay on FB1 if the people she wants to talk to aren't there. And dividing up FB so that EVERYONE can talk to anyone they want to is going to be

    • Re:So, how is this supposed to work? (Score:4, Interesting)

      by crow ( 16139 ) on Thursday July 30, 2020 @12:26PM (#60348197) Homepage Journal

      Well, they can force Facebook to spin off Instagram and Whats App. They might even force them to spin off Messenger, though that's a bit more tricky.

      What this really shows is that they need to change the law on mergers to ban them if both companies are worth more than $1B or something like that, so Facebook would never have bought other large competitors in the first place. (This would also have prevented many banks reaching the "too big to fail" status when we hit that crisis.)

    • You require open protocols for interoperability between services, and limit the data gathering and retention options for the hosts. You could even require a “directory” to be independent of a network.

  • Competition (Score:3)

    by JBMcB ( 73720 ) on Thursday July 30, 2020 @12:42PM (#60348301)

    It's not enough to be a monopoly. To violate the Sherman anti-trust act, which I assume the representative was talking about, you have to go to unreasonable measures to maintain your monopoly. When Standard Oil was broken up, this meant they had exclusive contracts for oil shipment and processing, meaning no competitor could use their refineries, or buy oil fields, or use oil tankers, without Standard Oil's consent.

    The equivalent, in Facebook terms, would be Facebook signing exclusive carrier contracts with ISPs so that no other social media platform could operate without their approval. Or, that Amazon and Google couldn't host competing social media services on their cloud platforms or they wouldn't be able to advertise on Facebook.

    As it stands, there are no natural or artificial barriers to anyone starting up a competing social media service. New variations of Facebook services pop up all the time. There isn't a lot of evidence that Facebook does anything to actively suppress or undermine these services, besides copying their features with more or less success. Microsoft had a few social media platforms that failed. Google had a couple that failed. I think if companies with those level of resources can't compete with Facebook, the issue isn't that Facebook is using some monopoly position to force competitors out of the market. I think they just provide a service people prefer. (Anyone use Google+? Holy cow it was awful.)

  • "especially companies that provide their products at no direct charge to consumers."

    Facebook, Google, ... charge their customers (advertisers) plenty, just not it's 'average user'

    If there's no charge, you're not the customer, you're the product.

    • Re: (Score:2)

      by cob666 ( 656740 )

      "especially companies that provide their products at no direct charge to consumers." Facebook, Google, ... charge their customers (advertisers) plenty, just not it's 'average user' If there's no charge, you're not the customer, you're the product.

      Exactly, I was going to post the same thing. This seems to be something that is often overlooked when discussing services like Facebook and Google.

    • If you're not being sold on the auction block, you're not the product. You're producing the product.

      Equating commercialization of data with slavery is ridiculous at best.

  • We should ask Chris Crooker to do us another video. This Facebook drama needs a hero.

  • Break it up (Score:4, Funny)

    by taylorius ( 221419 ) on Thursday July 30, 2020 @12:56PM (#60348393) Homepage

    Gov: So we're breaking Facebook up
    Zuck: What? Into two divisions?
    Gov: Read this, all in here.
    Zuck: What's this part about "scattered to the four winds?"

  • ...especially companies that provide their products at no direct charge to consumers.

    I don't like that 'no direct charge' wording. It implies that the collection of personal data isn't 'direct' - yet the data is taken directly and immediately from the user. I'd rather the wording be 'no visible charge', 'no auditable charge', 'no quantified charge', or something along those lines.

    I also don't like the tacit assumption that there's necessarily a contract in play, implied or otherwise. Facebook hoovers up lots of data from non-users who visit totally unrelated web pages that happen have Face

  • Google, Twitter, even Ebay need to be broken up. In fact, they should be broken up based on continent. Let them compete against each other, as well as compete against the Chinese monopolies and let them pay local taxes to places such as India, Eu-27, and yes, America.

  • Once upon a time, I was a Facebook addict for a brief period. An hour could not go by with out me having to check for status updates or whatever. This lasted a few months.

    The reason I quit was because I realized just how vapid and empty it is. Not to mention the site design is obnoxious and intentionally hard to use to do any task outside the main narritave, which is "Stay on Facebook and schlep up the inane banter and clickbait". FB will not even let you close out your account entirely, instead making you

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