Like you I watched all 54 minutes of the soporific press conference by FTC’s cheer squad explaining how they’ve restructured Facebook’s internal privacy compliance. Like you I was impressed that the FTC senior staff managed to so skeeve out the members of the press with their tone that instead of following up when their questions weren’t answered, the reporters just said “okay – okay” and got out of there.
The overall message was “we’re a nation of laws so let’s write some” and “we did the best job possible but left a lot on the table because suing Facebook is dangerous”.
I’ve been thinking about what it would mean to break up FB / G.
Remember when Baby Bell wasn’t a cheesy snack? In 1984 AT&T was forced to split into seven RBOCs = ‘regional bells’. It was simple to do because you could just break it up by state. It may have ultimately killed Bell Labs, which invented the transistor in the 50s (although they created fiber optics in 86, after the split).
Vertical split – break off ad network
One way to look at Google is as a company with a search product that consumers use and an ads product that advertisers pay for. You can make the same analysis about Facebook: social network + ad network.
So you split off the ads businesses, right? They generate all the controversial privacy snafus. Of course, this is in practice impossible – both companies farm eyeballs from their free consumer products to get their paid search users. Search & ads are inseperable.
A lesser version of a vertical split would be to force them to allow other players to compete for their SERP slots, making the Lumascape that much more complicated. The DOJ mandated this for AT&T before the breakup, requiring them to allow companies like MCI to operate over AT&T’s long-distance trunks. AT&T responded by requiring a 14-digit prefix code that consumers wouldn’t like.
Horizontal split – geo?
Not sure what it would mean for a general search engine to only cover a subset of topics or a subset of locations. These products already exist – on-site search as well as specialized DBs in law & medicine that institutions pay for. The whole Google value prop is that you can access some of this information without knowing how to use 100 topic-specific search engines.
Even trickier with a social network – what’s the point if there are people you can’t friend?
Free products work around a lot of laws
I’m not the first or best person to write about this (Lina Khan, for example). Companies that give something away or operate a part of their business at a loss are by their nature good at escaping the notice of the law – at least until the last 5 years or so.
For a while, farming consumers instead of selling them something has been a great way to evade any responsibility to treat them well. Unbundling value from revenue also unbundles liability.
“You can’t break us up, you’d kill us” is an interesting evolved defense strategy by free-to-use big tech that may at some point backfire in an obvious way. “Too big to fail” becomes “too big not to fail” very quickly under the right circumstances.
The good news – we’ve gone from 10 years ago when only spies cared about privacy to having a lot of cases of specific harm. Beyond privacy, people who spend real money on G, AMZN, AAPL or operate in their gardens are launching some big suits claiming trust-like unfair treatment. This includes advertisers, third-party sellers, and app developers.
All of this is to say I see a lot of action in the judiciary and executive. But we’re a nation of laws. Let’s write some.